the asia/pacific group on money laundering (apg) state bank of pakistan national seminar on...

The Asia/Pacific Group on Money Laundering (APG)

State Bank of Pakistan National Seminar on Anti-Money

Laundering and Counter Terrorist Financing

Rick McDonellHead, Asia/Pacific Group on Money

Laundering (APG) Secretariat

Islamabad29 March 2005

Anti-Money Laundering and Terrorist Financing Activities in the Asia/Pacific

Region


Introduction

• The APG

• Regional challenges in combating money laundering and terrorism financing

• Regional vulnerabilities – typologies

• Risks of not responding

• Meeting the challenges


The APG • The APG is the FATF-style regional body for

the Asia/Pacific region.• The APG does not set the standards against

money laundering and terrorist financing.• Those standards are global and are set by the

FATF in their 40 + 9 Recommendations.• The APG’s main roles are the implementation

of the AML/CFT global standards and the regional assessment of compliance.


The APG

• As an essential part of its role, the APG coordinates AML/CFT technical assistance and training across the Asia/Pacific region.

• The APG also works closely with other international and bodies involved in various legal, financial regulatory and law enforcement aspects of AML/CFT.

• The APG undertakes typologies work to study methods and trends of money laundering.


APG Members The APG presently consists of 28 members:Australia Marshall Islands, Republic of the

Bangladesh Mongolia

Brunei Darussalam Nepal

Cambodia New Zealand

Chinese Taipei Niue

Cook Islands Pakistan

Fiji Islands Palau

Hong Kong,China Philippines

India Samoa

Indonesia Singapore

Japan Sri Lanka

Korea, Republic of Thailand

Macau,China United States of America

Malaysia Vanuatu


New members expected in 2005:

Canada MyanmarLao PDR Vietnam


APGAsia/Pacific Group on

Money Laundering

ADBAsian

Development Bank

WCOWorld Customs

Organisation

OCOOceania Customs

Organisation

THE WORLD

BANK

EGMONT GROUPOF FIU’s

Key:

APG RELATIONSHIPS WITH INTERNATIONALAND REGIONAL ORGANISATIONS

APG Observers

APECAsia/Pacific Economic

Cooperation

ASEANAssociation of

South East Asian Nations

ASEMAsia Europe

Meetings

IMFInternational

Monetary Fund

ARFASEAN Regional

Forum

UNODCUnited Nations Office on

Drugs & Crime

UNCTCUnited Nations Counter Terrorism Committee

Pacific Islands Forum


Regional Challenges in AML/CFT

Specific vulnerabilities include:• Relatively low institutional capacity• Corruption (particularly in developing countries)• Major drug producing centres in region• High use of alternative remittance systems• Extensive use of cash and high value items• Serious terrorist activity and on-going threats


Low levels of institutional capacity

• Large number of developing countries in the region

• Diversity in the levels of institutional development across the region

• Many countries are working hard to develop legal and governance structures


Corruption

• Corruption generates enormous profits to be laundered

• Corruption is a key factor in both predicate criminal

activities and money laundering

• Systemic corruption undermines regulatory and

legislative AML/CFT regimes

• Systemic corruption undermines institutional development


Major drug production centres

and trafficking points in the region

• Heroin, opium, amphetamine type substances

(including precursor chemicals), ecstasy, cannabis

• Increasing domestic drug consumption within Asia,

particularly heroin & amphetamine type stimulants.

• Major drug transport ‘hubs’ and drug distribution

points


Significant levels of other

profit-driven crime

• People smuggling and human trafficking

• Arms trafficking

• Fraud

• Smuggling

• Other profit driven crimes – eg Illegal logging


High use of cash and alternative remittance systems (ARS)• ARS has a legitimate role in many countries to

remit monies to/from developing countries

• Cash economies and large ARS sectors are

highly vulnerable to exploitation for money

laundering and terrorist financing

• Cash couriers seen as a particular vulnerability

• Cash economies and ARS reflects relatively low

levels of trust in regulated financial sector


Cash and alternative remittance

systems typologies

• Use of informal channels (ARS and cash / gold

smuggling) is a common typology to remit

money - often mingling legitimate remittances

and ‘black’ monies

• ARS and cash couriering linked to other trade-

based money laundering typologies


Serious terrorist activity &

on-going terrorists threats

• Terrorist acts occurring across the region

• High use of informal channels for terrorist financing

(especially ARS & cash couriers)

• Terrorists using non-profit organisations for raising

and moving terrorist funds

• Terrorists identifying and exploiting ‘weak link’

economies


Risks of non-compliance

• Increased criminal and terrorist

activity

• Stability of the banking system

& reputation damage

• Negative economic effects

• Sanctions / threat of actions by the international community

• Weak links attract money launderers and terrorists

• National security issues


APG Regional Progress

• AML LawsIn 1995, 5 jurisdictionsIn 2005, over 30 jurisdictions

• FIUs

In 2005, 17 APG member or observer

jurisdictions have an established FIU


Meeting the Challenges

APG Mutual Evaluations• Provide peer reviews of compliance with the

global standards by relevant experts from member countries’ legal, financial and law enforcement systems

• Includes suggesting areas for improvement and technical assistance through mutual feedback


Meeting the ChallengesCapacity Building

Technical Assistance and Training• Regional coordination role for AML/CFT through the

APG Donor & Provider Group

• Resources such as model laws, training programs, mentoring etc

• Country projects via multilateral & bilateral cooperation

• Regional projects involving e.g. ADB, IMF, World Bank, UNODC, Commonwealth Secretariat


Meeting the Challenges Regional linkages to global initiatives

• Maintaining close links with the international community

• Keeping members up to date with international standards

• Participating in global standard setting

• Engaging in typologies research of methods and emerging trends – eg APG has an ongoing Typologies Working Group and an Annual Typologies Workshops of money laundering experts

• Proposed Regional Workshop


Useful websites

For more information on AML/CFT visit:

APG - www.apgml.org

FATF - www.fatf-gafi.org

UNODC Global Programme Against Money Laundering

- www.unodc.org/money_laundering.html

The Egmont Group of FIUs

- www.egmontgroup.org


Useful sources for typologies information

• APG typologies reports http://www.apgml.org/content/typologies_reports.jsp

• FATF typologies reports

http://www.fatf-gafi.org/

• Egmont Group of FIUs – 100 Case Studies

http://www.ncis.co.uk/fiu.asp

• International Narcotics Control Strategy Report (INCSR) 2005

http://www.state.gov/g/inl/rls/nrcrpt/2005/


For more information contact the APG Secretariat via

[email protected]

the asia/pacific group on money laundering (apg) state bank of pakistan national seminar on...

Documents

apg relationships

antimoney laundering

trends of money laundering

asiapacific region

region diversity

terrorist financing

amlcft global standards

fatfstyle regional body