Money Laundering

United States Department of State
Bureau for International Narcotics and Law

Enforcement Affairs
International
Narcotics Control
Strategy Report
Volume II
Money Laundering and
Financial Crimes
March 2011
Table of Contents
Table of Contents
Volume II
Common Abbreviations................................................................................................... iii
Legislative Basis for the INCSR ...................................................................................... 2
Introduction ........................................................................................................................ 3
Bilateral Activities ............................................................................................................. 4
Training and Technical Assistance ...................................................................................................... 4
Department of State............................................................................................................................... 4
International Law Enforcement Academies (ILEAs) ............................................................................ 6
Board of Governors of the Federal Reserve System (FRB) ................................................................. 9
Federal Bureau of Investigation (FBI), Department of Justice ............................................................ 9
Federal Deposit Insurance Corporation (FDIC) .................................................................................. 10
Financial Crimes Enforcement Network (FinCEN), Department of Treasury .................................... 10
Immigration and Customs Enforcement, Department of Homeland Security (DHS) ........................ 11
Internal Revenue Service (IRS), Criminal Investigative Division (CID), Department of Treasury..... 12
Office of the Comptroller of the Currency (OCC), Department of Treasury ...................................... 16
Office of Overseas Prosecutorial Development, Assistance and Training, the Asset Forfeiture and
Money Laundering Section, & Counterterrorism Section (OPDAT, AFMLS, and CTS), Department
of Justice ............................................................................................................................................. 16
Office of Technical Assistance (OTA), Treasury Department ............................................................ 19
Treaties and Agreements ............................................................................................... 24
Treaties ................................................................................................................................................ 24
Agreements ......................................................................................................................................... 25
Asset Sharing ...................................................................................................................................... 25
Multi-Lateral Organizations & Programs...................................................................... 26
The Financial Action Task Force (FATF) and FATF-Style Regional Bodies (FSRBs) ....................... 26
The Organization of American States Inter-American Drug Abuse Control Commission
(OAS/CICAD) Group of Experts to Control Money Laundering ......................................................... 28
Pacific Anti-Money Laundering Program (PALP) ............................................................................... 29
United Nations Global Programme against Money Laundering, Proceeds of Crime, and the
Financing of Terrorism (GPML) .......................................................................................................... 30
Major Money Laundering Countries ............................................................................. 34
Countries and Jurisdictions Table...................................................................................................... 39
Introduction to Comparative Table ..................................................................................................... 40
Glossary of Terms ............................................................................................................................... 40
Comparative Table............................................................................................................................... 42
INCSR Volume II Template Key ........................................................................................................... 51
Countries/Jurisdictions of Primary Concern............................................................... 55
Afghanistan.......................................................................................................................................... 55
Antigua and Barbuda .......................................................................................................................... 57
Australia............................................................................................................................................... 59
Austria.................................................................................................................................................. 60
Bahamas .............................................................................................................................................. 62
Belize.................................................................................................................................................... 64
i
INCSR 2011 Volume II
Bolivia .................................................................................................................................................. 65
Brazil .................................................................................................................................................... 67
British Virgin Islands ........................................................................................................................... 70
Burma................................................................................................................................................... 72
Cambodia ............................................................................................................................................. 74
Canada ................................................................................................................................................. 76
Cayman Islands ................................................................................................................................... 78
China, Peoples Republic of ................................................................................................................ 80
Colombia.............................................................................................................................................. 82
Costa Rica............................................................................................................................................ 84
Cyprus.................................................................................................................................................. 86
Dominican Republic ............................................................................................................................ 90
France .................................................................................................................................................. 92
Germany............................................................................................................................................... 94
Greece .................................................................................................................................................. 96
Guatemala ............................................................................................................................................ 98
Guernsey............................................................................................................................................ 100
Guinea-Bissau ................................................................................................................................... 102
Haiti .................................................................................................................................................... 104
Hong Kong ......................................................................................................................................... 105
India ................................................................................................................................................... 107
Indonesia ........................................................................................................................................... 110
Iran ..................................................................................................................................................... 112
Iraq ..................................................................................................................................................... 115
Isle of Man.......................................................................................................................................... 117
Israel .................................................................................................................................................. 119
Italy..................................................................................................................................................... 121
Japan.................................................................................................................................................. 123
Jersey................................................................................................................................................. 125
Kenya ................................................................................................................................................. 127
Latvia.................................................................................................................................................. 129
Lebanon ............................................................................................................................................. 132
Liechtenstein ..................................................................................................................................... 134
Luxembourg....................................................................................................................................... 135
Macau ................................................................................................................................................. 137
Mexico ................................................................................................................................................ 139
Netherlands ....................................................................................................................................... 141
Nigeria ................................................................................................................................................ 143
Pakistan ............................................................................................................................................. 145
Panama .............................................................................................................................................. 147
Paraguay ............................................................................................................................................ 150
Philippines ......................................................................................................................................... 153
Russia ................................................................................................................................................ 155
Singapore........................................................................................................................................... 157
Somalia .............................................................................................................................................. 159
Spain .................................................................................................................................................. 161
Switzerland ........................................................................................................................................ 163
Taiwan ................................................................................................................................................ 165
Thailand ............................................................................................................................................. 167
Turkey ................................................................................................................................................ 169
Ukraine ............................................................................................................................................... 171
United Arab Emirates ........................................................................................................................ 173
United Kingdom ................................................................................................................................. 175
Uruguay ............................................................................................................................................. 176
Venezuela........................................................................................................................................... 179
Zimbabwe........................................................................................................................................... 181
ii
Common Abbreviations
AML Anti-Money Laundering
APG Asia/Pacific Group on Money Laundering
ARS Alternative Remittance System
BCS Bulk Cash Smuggling
CFATF Caribbean Financial Action Task Force
CFT Counter-terrorist Financing
CTR Currency Transaction Report
DEA Drug Enforcement Administration
DHS Department of Homeland Security
DNFBP Designated Non-Financial Businesses and Professions
DOJ Department of Justice
DOS Department of State
EAG Eurasian Group to Combat Money Laundering and Terrorist Financing
EC European Commission
ECOWAS Economic Community of West African States
EO Executive Order
ESAAMLG Eastern and Southern Africa Anti-Money Laundering Group
EU European Union
FATF Financial Action Task Force
FBI Federal Bureau of Investigation
FI Financial Institution
FinCEN Financial Crimes Enforcement Network
FIU Financial Intelligence Unit
FSRB FATF-Style Regional Body
GABAC Action Group against Money Laundering in Central Africa
GAFISUD Financial Action Task Force on Money Laundering in South America
GIABA Inter-Governmental Action Group against Money Laundering
IBC International Business Company
ICE U.S. Immigration and Customs Enforcement
iii
ICRG International Cooperation Review Group

IMF International Monetary Fund
INCSR International Narcotics Control Strategy Report
INL Bureau for International Narcotics and Law Enforcement Affairs
IRS Internal Revenue Service
IRS-CID Internal Revenue Service Criminal Investigative Division
MENAFATF Middle East and North Africa Financial Action Task Force
MER Mutual Evaluation Report
MLAT Mutual Legal Assistance Treaty
Committee of Experts on the Evaluation of Anti-Money Laundering Measures
MONEYVAL
and the Financing of Terrorism
MOU Memorandum of Understanding
NGO Non-Governmental Organization
NPO Non-Profit Organization
OAS Organization of American States
OAS/CICAD OAS Inter-American Drug Abuse Control Commission
OFAC Office of Foreign Assets Control
OFC Offshore Financial Center
OPDAT Office of Overseas Prosecutorial Development, Assistance and Training
OTA Office of Technical Assistance
SAR Suspicious Activity Report
STR Suspicious Transaction Report
TBML Trade-Based Money Laundering
TTU Trade Transparency Unit
UNCAC United Nations Convention against Corruption
UNDrug 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and
Convention Psychotropic Substances
UNGPML United Nations Global Programme against Money Laundering
UNODC United Nations Office for Drug Control and Crime Prevention
UNSCR United Nations Security Council Resolution
UNTOC United Nations Convention against Transnational Organized Crime
iv
USAID Agency for International Development

USG United States Government
v
MONEY LAUNDERING AND
FINANCIAL CRIMES
1
Legislative Basis for the INCSR

The Money Laundering and Financial Crimes section of the Department of States International
Narcotics Control Strategy Report (INCSR) has been prepared in accordance with section 489 of
the Foreign Assistance Act of 1961, as amended (the FAA, 22 U.S.C. 2291). The 2011
INCSR is the 28th annual report prepared pursuant to the FAA. 1
The FAA requires a report on the extent to which each country or entity that received assistance
under chapter 8 of Part I of the Foreign Assistance Act in the past two fiscal years has met the
goals and objectives of the United Nations Convention Against Illicit Traffic in Narcotic Drugs
and Psychotropic Substances (the 1988 UN Drug Convention) (FAA 489(a)(1)(A)).
Although the Convention does not contain a list of goals and objectives, it does set forth a
number of obligations that the parties agree to undertake. Generally speaking, it requires the
parties to take legal measures to outlaw and punish all forms of illicit drug production,
trafficking, and drug money laundering, to control chemicals that can be used to process illicit
drugs, and to cooperate in international efforts to these ends. The statute lists action by foreign
countries on the following issues as relevant to evaluating performance under the 1988 UN Drug
Convention: illicit cultivation, production, distribution, sale, transport and financing, money
laundering, asset seizure, extradition, mutual legal assistance, law enforcement and transit
cooperation, precursor chemical control, and demand reduction.
In attempting to evaluate whether countries and certain entities are meeting the goals and
objectives of the 1988 UN Drug Convention, the Department has used the best information it has
available. The 2011 INCSR covers countries that range from major drug producing and drug-
transit countries, where drug control is a critical element of national policy, to small countries or
entities where drug issues or the capacity to deal with them are minimal. In addition to
identifying countries as major sources of precursor chemicals used in the production of illicit
narcotics, the INCSR is mandated to identify major money laundering countries (FAA
489(a)(3)(C)). The INCSR is also required to report findings on each countrys adoption of
laws and regulations to prevent narcotics-related money laundering (FAA 489(a)(7)(C)). This
report is the section of the INCSR that reports on money laundering and financial crimes.
A major money laundering country is defined by statute as one whose financial institutions
engage in currency transactions involving significant amounts of proceeds from international
narcotics trafficking (FAA 481(e)(7)). However, the complex nature of money laundering
transactions today makes it difficult in many cases to distinguish the proceeds of narcotics
trafficking from the proceeds of other serious crime. Moreover, financial institutions engaging
in transactions involving significant amounts of proceeds of other serious crime are vulnerable to
narcotics-related money laundering. This years list of major money laundering countries
recognizes this relationship by including all countries and other jurisdictions whose financial
institutions engage in transactions involving significant amounts of proceeds from all serious
crime. A government (e.g., the United States or the United Kingdom) can have comprehensive
1
The 2011 report on Money Laundering and Financial Crimes is a legislatively mandated section of the U.S. Department of State s annual
International Narcotics Control Strategy Report. This 2011 report on Money Laundering and Financial Crimes is base d upon the
contributions of numerous U.S. Government agencies and international sources. Many agencies provided information on international
training as well as technical and other assistance, including the following: Department of Homeland Securitys Bureau of Immi gration and
Customs Enforcement; Department of Justices Asset Forfeiture and Money Laundering Section (AFMLS) of Justices Criminal Division, Drug
Enforcement Administration, Federal Bureau of Investigation, and Office for Overseas Prosecutorial Development Assistance; and,
Treasurys Financial Crimes Enforcement Network, Internal Revenue Service, Office of the Comptroller o f the Currency, and Office of
Technical Assistance. Also providing information on training and technical assistance are the independent regulatory agencie s, Federal
Deposit Insurance Corporation, and the Federal Reserve Board.
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Money Laundering and Financial Crimes
anti-money laundering laws on its books and conduct aggressive anti-money laundering
enforcement efforts but still be classified a major money laundering jurisdiction. In some cases,
this classification may simply or largely be a function of the size of the jurisdictions economy.
In such jurisdictions, quick, continuous and effective anti-money laundering efforts by the
government are critical. The following countries/jurisdictions have been identified this year in
this category:
Major Money Laundering Countries in 2010:
Afghanistan, Antigua and Barbuda, Australia, Austria, Bahamas, Belize, Bolivia, Brazil,
British Virgin Islands, Burma, Cambodia, Canada, Cayman Islands, China, Colombia,
Costa Rica, Cyprus, Dominican Republic, France, Germany, Greece, Guatemala,
Guernsey, Guinea-Bissau, Haiti, Hong Kong, India, Indonesia, Iran, Iraq, Isle of Man,
Israel, Italy, Japan, Jersey, Kenya, Latvia, Lebanon, Liechtenstein, Luxembourg, Macau,
Mexico, Netherlands, Nigeria, Pakistan, Panama, Paraguay, Philippines, Russia,
Singapore, Somalia, Spain, Switzerland, Taiwan, Thailand, Turkey, Ukraine, United Arab
Emirates, United Kingdom, United States, Uruguay, Venezuela, and Zimbabwe.
The Money Laundering and Financial Crimes section provides further information on these
countries/entities, as required by section 489 of the FAA.
Introduction
The 2011 International Narcotics Control Strategy Report, Money Laundering and Financial
Crimes, highlights the most significant steps countries and jurisdictions categorized as Major
Money Laundering Countries have taken to improve their anti-money laundering/counter-
terrorist financing (AML/CFT) regimes. The report provides a snapshot of the AML/CFT legal
infrastructure of each country or jurisdiction and its capacity to share information and cooperate
in international investigations. For each country where they have been completed, the write-up
also provides a link to the most recent mutual evaluation performed by or on behalf of the
Financial Action Task Force (FATF) or the FATF-style regional body to which the country or
jurisdiction belongs. When applicable, relevant country reports also provide links to the
Department of States Country Reports on Terrorism so the reader can learn more about issues
specific to terrorism and terrorism financing. Providing these links will allow those interested
readers to find detailed information on the countrys AML/CFT capacity and the effectiveness of
its programs.
In addition, the report contains details of United States Government efforts to provide technical
assistance and training as well as information on the multilateral organizations we support, either
monetarily and/or through participation in their programs. In 2010, USG personnel leveraged
their expertise to share their experience and knowledge with over 100 countries. They worked
independently and with other donor countries and organizations to provide training programs,
mentoring and support for supervisory, law enforcement, prosecutorial, customs and financial
intelligence unit personnel as well as private sector entities. We expect these efforts, over time,
will build capacity in jurisdictions that are lacking, strengthen the overall level of global
compliance with international standards and contribute to an increase in prosecutions and
convictions of those who launder money or finance terrorists or terrorist acts.
Money laundering continues to be a serious global threat. Jurisdictions flooded with illicit funds
are vulnerable to the breakdown of the rule of law, the corruption of public officials and
destabilization of their economies. The development of new technologies and the possibility of
3
linkages between illegal activities that generate considerable proceeds and the funding of
terrorist groups only exacerbate the challenges faced by the financial, law enforcement,
supervisory, legal and intelligence communities. The continued development of AML/CFT
regimes to deter criminal activity and detect illicit proceeds is reflected in this report again this
year. Political stability, democracy and free markets depend on solvent, stable, and honest
financial, commercial, and trade systems. The Department of States Bureau of International
Narcotics and Law Enforcement Affairs looks forward to continuing to work with our U.S. and
international partners in furthering this important work and strengthening capacities globally to
combat money laundering and the funding of terrorists and terrorism.
Bilateral Activities
Training and Technical Assistance
During 2010, a number of U.S. law enforcement and regulatory agencies provided training and
technical assistance on money laundering countermeasures and financial investigations to their
counterparts around the globe. These courses have been designed to give financial investigators,
regulators and supervisors, and prosecutors the necessary tools to recognize, investigate, and
prosecute money laundering, financial crimes, terrorist financing, and related criminal activity.
Courses have been provided in the United States as well as in the jurisdictions where the
programs are targeted.
Department of State
The U.S. Department of States Bureau of International Narcotics and Law Enforcement Affairs
(INL) Crime Programs Division helps strengthen criminal justice systems and the abilities of law
enforcement agencies around the world to combat transnational criminal threats before they
extend beyond their borders and impact our homeland. Through its international programs, as
well as in coordination with other INL offices and U.S. Government (USG) agencies, the INL
Crime Programs Division addresses a broad cross-section of law enforcement and criminal
justice sector areas including: counternarcotics; drug demand reduction; money laundering;
financial crime; terrorist financing; transnational crime; smuggling of goods; illegal migration;
trafficking in persons; domestic violence; border controls; document security; corruption; cyber-
crime; intellectual property rights; law enforcement; police academy development; and
assistance to judiciaries and prosecutors.
INL and the State Departments Office of the Coordinator for Counterterrorism (S/CT) co-chair
the interagency Terrorist Finance Working Group (TFWG), and together are implementing a
multi-million dollar training and technical assistance program designed to develop or enhance
the capacity of a selected group of more than two dozen countries whose financial sectors have
been used, or are vulnerable to being used, to finance terrorism. As is the case with the more
than 100 other countries to which INL-funded training was delivered in 2010, the capacity to
thwart the funding of terrorism is dependent on the development of a robust anti-money
laundering regime. Supported by and in coordination with the U.S. Department of State, U.S.
Department of Justice (DOJ), U.S. Department of Homeland Security (DHS), U.S. Department
of the Treasury, the Federal Deposit Insurance Corporation, and various nongovernmental
organizations, the TFWG provided in 2010 a variety of law enforcement, regulatory and criminal
justice programs worldwide. This integrated approach includes assistance with the drafting of
legislation and regulations that comport with international standards, the training of law
4
enforcement, the judiciary and bank regulators, as well as the development of financial
intelligence units (FIUs) capable of collecting, analyzing, and disseminating financial
information to foreign analogs. Courses and training have been provided in the United States as
well as in the jurisdictions where the programs are targeted.
Nearly every federal law enforcement agency assisted in this effort by providing basic and
advanced training courses in all aspects of financial criminal investigation. Likewise, bank
regulatory agencies participated in providing advanced AML/CFT training to supervisory
entities. In addition, INL made funds available for the intermittent or full-time posting of legal
and financial mentors at selected overseas locations. These advisors work directly with host
governments to assist in the creation, implementation, and enforcement of anti-money laundering
and financial crime legislation. INL also provided several federal agencies funding to conduct
multi-agency financial crime training assessments and develop specialized training in specific
jurisdictions to combat money laundering.
The State Department, in conjunction with DHS Immigration and Customs Enforcement (ICE)
and the Department of Treasury, supports five trade transparency units (TTUs) in Latin America:
three in the tri-border area of Brazil, Argentina, and Paraguay, one in Mexico, and one in
Colombia. TTUs are entities designed to help identify significant disparities in import and
export trade documentation and continue to enjoy success in combating money laundering and
other trade-related financial crimes. Similar to the Egmont Group of FIUs that examines and
exchanges information gathered through financial transparency reporting requirements, an
international network of TTUs would foster the sharing of disparities in trade data between
countries and be a potent weapon in combating customs fraud and trade-based money
laundering. Trade is the common denominator in most of the worlds alternative remittance
systems and underground banking systems. Trade-based value transfer systems also have been
used in terrorist finance.
The success of the Caribbean Anti-Money Laundering Program (CALP) led INL to develop a
similar type of program for small Pacific island jurisdictions. Accordingly, INL funded the
establishment of the Pacific Island Anti-Money Laundering Program (PALP) in 2005. The
objectives of PALP are to reduce the laundering of the proceeds of all serious crime and the
financing of terrorists by facilitating the prevention, investigation, and prosecution of money
laundering. PALPs staff of resident mentors provides regional and bilateral AML/CFT
mentoring, training and technical assistance to the 14 Pacific Islands Forum countries that are not
members of the Financial Action Task Force (FATF). The management of the program was
transferred to the UN Global Program against Money Laundering from the Pacific Islands Forum
in September 2008, as the PALP began its third year of operation. The PALP is nearing
completion following its successful program, as evidenced by the new laws, increased capacity
and successful investigations completed by participant jurisdictions.
INL also provided support to the UN Global Program against Money Laundering (GPML) in
2010. In addition to sponsoring money laundering conferences and providing short-term training
courses, GPML instituted its mentoring program to provide advisors on a year-long basis to
specific countries or regions. GPML mentors provided assistance to Horn of Africa countries
targeted by the U.S. East Africa Counterterrorism Initiative as well as asset forfeiture assistance
to Namibia, Botswana, and Zambia. The resident mentor based in Namibia initiated and
monitored the Prosecutor Placement Program, an initiative aimed at placing prosecutors from the
region for a certain period of time within the asset forfeiture unit of South Africas national
prosecuting authority. The GPML mentors in Central Asia and the Mekong Delta continued
assisting the countries in those regions to develop viable AML/CFT regimes. GPML continues
5
to develop interactive computer-based programs for distribution, translated into several

languages.
INL continues to provide significant financial support for many of the anti-money laundering
bodies around the globe. During 2010, INL supported FATF, the international AML/CFT
standard setting organization. In addition to sharing mandatory membership dues to FATF and
the Asia/Pacific Group on Money Laundering (APG) with the U.S. Department of the Treasury
and DOJ, INL is a financial supporter of FATF-style regional bodies (FSRBs) secretariats and
training programs, including the Council of Europes MONEYVAL, the Caribbean Financial
Action Task Force (CFATF), the Intergovernmental Action Group against Money-Laundering in
West Africa (GIABA), the Eastern and Southern Africa Anti-Money Laundering Group
(ESAAMLG) and the South American Financial Action Task Force (GAFISUD). In addition to
providing funding to GPML to place a residential mentor in Dakar, Senegal, to assist those
member states of GIABA that have enacted the necessary legislation to develop FIUs, INL
worked with the mentor to determine priorities and develop opportunities and programs. INL
also financially supported the Organization of American States (OAS) Inter-American Drug
Abuse Control Commission (CICAD) Experts Group to Control Money Laundering and the OAS
Counter-Terrorism Committee.
INL has supported anti-piracy efforts by substantively working with other bureaus within DOS
as well as with international organizations and other countries, to look at the best way to address
piracy through its financial levers the assets assembled as a result of piracy activity, and the
material support and instrumentalities of piracy and the application of domestic and
international instruments to thwart pirates as we do other criminals.
As in previous years, INL training programs continue to focus on both interagency bilateral and
multilateral efforts. When possible, we seek participation with our partner countries law
enforcement, judicial and central bank authorities to design and provide training and technical
assistance to countries with the political will to develop viable AML/CFT financing regimes.
This allows for extensive synergistic dialogue and exchange of information. INLs approach has
been used successfully in Africa, Asia, the Pacific, Central and South America, the Newly
Independent States of the former Soviet Union, and Central Europe. INL also provides funding
for many of the regional training and technical assistance programs offered by the various law
enforcement agencies, including assistance to the International Law Enforcement Academies.
International Law Enforcement Academies (ILEAs)

The mission of the regional ILEAs has been to support emerging democracies, help protect U.S.
interests through international cooperation, and promote social, political and economic stability
by combating crime. To achieve these goals, the ILEA program has provided high-quality
training and technical assistance, supported institution building and enforcement capabilities, and
fostered relationships of American law enforcement agencies with their counterparts in each
region. ILEAs have also encouraged strong partnerships among regional countries to address
common problems associated with criminal activity.
The ILEA concept and philosophy is a united effort by all the participants - government agencies
and ministries, trainers, managers, and students alike to achieve the common foreign policy goal
of international law enforcement. The goal is to train professionals who will craft the future for
the rule of law, human dignity, personal safety and global security.
The ILEAs are a progressive concept in the area of international assistance programs. The
regional ILEAs offer three different types of programs. The core program, a series of specialized
6
training courses and regional seminars tailored to region - specific needs and emerging global
threats, typically includes 50 participants, normally from three or more countries. The
specialized courses, comprised of about 30 participants, are normally one or two weeks long and
often run simultaneously with the Core program. Topics of the regional seminars include
transnational crimes, financial crimes, and counter-terrorism.
The ILEAs help develop an extensive network of alumni that exchange information with their
U.S. counterparts and assist in transnational investigations. These graduates are also expected to
become the leaders and decision-makers in their respective societies. The Department of State
works with the Departments of Justice (DOJ), Homeland Security (DHS) and Treasury, and with
foreign governments to implement the ILEA programs. To date, the combined ILEAs have
trained over 30,000 officials from over 85 countries in Africa, Asia, Europe and Latin America.
Africa. ILEA Gaborone (Botswana) opened in 2001. The main feature of the ILEA is a six-
week intensive personal and professional development program, called the Law Enforcement
Executive Development Program (LEEDP), for law enforcement mid-level managers. The
LEEDP brings together approximately 45 participants from several nations for training on topics
such as combating transnational criminal activity, supporting democracy by stressing the rule of
law in international and domestic police operations, and raising the professionalism of officers
involved in the fight against crime. ILEA Gaborone also offers specialized courses for police
and other criminal justice officials to enhance their capacity to work with U.S. and regional
officials to combat international criminal activities. These courses concentrate on specific
methods and techniques in a variety of subjects, such as counter-terrorism, anti-corruption,
financial crimes, border security, drug enforcement, firearms and many others. Instruction is
provided to participants from Angola, Botswana, Burundi, Cameroon, Comoros, Djibouti,
Ethiopia, Gabon, Ghana, Kenya, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Nigeria,
Republic of Congo, Rwanda, Senegal, Seychelles, Sierra Leone, South Africa, Swaziland,
Tanzania, Uganda and Zambia. Trainers from the United States and Botswana provide
instruction. Gaborone has offered specialized courses on money laundering/terrorist financing-
related topics such as Criminal Investigation and International Banking & Money Laundering
Program. ILEA Gaborone trains approximately 500 students annually.
Asia. ILEA Bangkok (Thailand) opened in March 1999. The ILEA focuses on enhancing the
effectiveness of regional cooperation against the principal transnational crime threats in
Southeast Asia - illicit drug trafficking, financial crimes, and alien smuggling. The ILEA
provides a core course (the Supervisory Criminal Investigator Course or SCIC) of management
and technical instruction for supervisory criminal investigators and other criminal justice
managers. In addition, these ILEA presents approximately 20 one-to-two-week specialized
courses in a variety of criminal justice topics. The principal objectives of the ILEA are the
development of effective law enforcement cooperation within the member countries of the
Association of Southeast Asian Nations (ASEAN), Timor Leste and China (including Hong
Kong and Macau), and the strengthening of each countrys criminal justice institutions to
increase their abilities to cooperate in the suppression of transnational crime. Instruction is
provided to participants from Brunei, Cambodia, China, Timor Leste, Hong Kong, Indonesia,
Laos, Macau, Malaysia, Philippines, Singapore, Thailand and Vietnam. Subject matter experts
from the United States, Australia, Hong Kong, Japan, Philippines, and Thailand provide
instruction. ILEA Bangkok has offered specialized courses on money laundering/terrorist
financing-related topics such as Computer Crime Investigations and Complex Financial
Investigations. Approximately 800 students participate annually.
7
Europe. ILEA Budapest (Hungary) opened in 1995. Its mission has been to support the
regions emerging democracies by combating an increase in criminal activity that emerged
against the backdrop of economic and political restructuring following the collapse of the Soviet
Union. ILEA Budapest offers three different types of programs: an eight-week Core course,
regional seminars and specialized courses in a variety of criminal justice topics. Instruction is
provided to participants from Albania, Armenia, Azerbaijan, Bulgaria, Croatia, Czech Republic,
Georgia, Hungary, Kazakhstan, Kyrgyz Republic, Latvia, Lithuania, Macedonia, Moldova,
Montenegro, Romania, Russia, Serbia, Slovakia, Slovenia, Tajikistan, Turkmenistan, Ukraine
and Uzbekistan. Trainers from 17 federal agencies and local jurisdictions from the United States
and also from Hungary, Germany, United Kingdom, Netherlands, Ireland, Italy, Russia, Interpol
and the Council of Europe provide instruction. ILEA Budapest has offered specialized courses
on money laundering/terrorist financing-related topics such as Investigating/Prosecuting
Organized Crime and Transnational Money Laundering. ILEA Budapest trains approximately
1,000 students annually.
Global. ILEA Roswell (New Mexico) opened in September 2001. This ILEA offers a
curriculum comprised of courses similar to those provided at a typical criminal justice
university/college. These three-week courses have been designed and are taught by
academicians for foreign law enforcement officials. This Academy is unique in its format and
composition with a strictly academic focus and a worldwide student body. The participants are
mid-to-senior level law enforcement and criminal justice officials from Eastern Europe; Russia;
the Newly Independent States (NIS); ASEAN member countries; the Peoples Republic of China
(including the Special Autonomous Regions of Hong Kong and Macau); member countries of
the Southern African Development Community (SADC) plus other East and West African
countries; the Caribbean, Central and South American countries. The students are drawn from
pools of ILEA graduates from the Academies in Bangkok, Budapest, Gaborone and San
Salvador. ILEA Roswell trains approximately 350 students annually.
Latin America. ILEA San Salvador (El Salvador) opened in 2005. Its training program is
similar to the ILEAs in Bangkok, Budapest and Gaborone. It offers a six-week Law
Enforcement Management Development Program (LEMDP) for law enforcement and criminal
justice officials as well as specialized courses for police, prosecutors, and judicial officials.
ILEA San Salvador normally delivers four LEMDP sessions and approximately 20 specialized
courses annually, concentrating on attacking international terrorism, illegal trafficking in drugs,
alien smuggling, terrorist financing and financial crimes investigations. Segments of the
LEMDP focus on terrorist financing and financial evidence/money laundering application.
Instruction is provided to participants from: Antigua and Barbuda, Argentina, Bahamas,
Barbados, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominica, Dominican Republic,
Ecuador, El Salvador, Grenada, Guatemala, Guyana, Honduras, Jamaica, Mexico, Nicaragua,
Panam, Paraguay, Per, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines,
Suriname, Trinidad and Tobago, Uruguay and Venezuela. ILEA San Salvador trains
approximately 500 students per year.
The ILEA Regional Training Center. The Regional Training Center (RTC) in Lima (Peru)
opened in 2007 to complement the mission of ILEA San Salvador. The RTC, expected to be
upgraded to a fully-operational ILEA in the future, augments the delivery of region-specific
training for Latin America and concentrates on specialized courses on critical topics for countries
in the Southern Cone and Andean Regions. The RTC trains approximately 300 students per
year.
8
Board of Governors of the Federal Reserve System (FRB)

In addition to its domestic programs to combat and deter money laundering and terrorist
financing, internationally, the Board of Governors of the Federal Reserve System (FRB)
conducted training and provided technical assistance to banking supervisors in anti-money
laundering (AML) and counter-terrorist financing (CFT) tactics in partnership with regional
supervisory groups or multilateral institutions. Countries participating in these FRB initiatives in
2010 were Armenia, Aruba, Colombia, Croatia, Czech Republic, Ghana, Hong Kong, India,
Indonesia, Italy, Japan, Kenya, Kuwait, Lebanon, Mexico, New Zealand, Nigeria, Peru,
Philippines, Portugal, Russia, and Turkey.
Due to the importance the FRB places on international standards, the FRBs AML experts
participate regularly in the U.S. delegation to the Financial Action Task Force (FATF) and the
Basel Committees AML/CFT expert group (AMLEG). The FRB also is an active participant in
the U.S. Treasury Departments ongoing Private Sector Dialogue conferences. Staff also meets
frequently with industry groups and foreign supervisors to communicate U.S. supervisory
expectations and support industry best practices in this area.
The FRB presented training courses on International Money Movement to domestic law
enforcement agencies, including the Department of Homeland Securitys Bureau for
Immigration and Customs Enforcement (DHS/ICE), the Federal Bureau of Investigation, and the
Internal Revenue Service-Criminal Investigation Division.
Federal Bureau of Investigation (FBI), Department of Justice

During 2010, with the assistance of Department of State funding, the U.S. Federal Bureau of
Investigation (FBI) continued its extensive international training in combating money
laundering, terrorist financing, financial fraud and complex financial crimes, as well as training
in conducting racketeering enterprise investigations. One such training program is the FBIs
International Training and Assistance Unit (ITAU), located at the FBI Academy in Quantico,
Virginia. ITAU coordinates with the Terrorist Financing and Operations Section of the FBIs
Counterterrorism Division, as well as other divisions at FBI headquarters and in the field, to
provide instructors for these international initiatives. FBI instructors, who are most often
financial analysts, intelligence analysts, staff operation specialists, operational Special Agents or
Supervisory Special Agents, rely on their experience to relate to the international law
enforcement students as peers and partners in the training courses.
The FBI regularly conducts training through the International Law Enforcement Academies
(ILEA) in Bangkok, Thailand; Budapest, Hungary; Gaborone, Botswana; and San Salvador, El
Salvador. In 2010, the FBI delivered training to 245 students from 14 countries at ILEA
Budapest. At ILEA Bangkok, the FBI provided training to 55 students from ten countries in the
Supervisory Criminal Investigators Course. At ILEA Gaborone, the FBI provided training to 69
students from eight African countries. At ILEA San Salvador, the FBI provided training to 140
students from 17 countries.
Also in 2010, the FBI conducted jointly with the Internal Revenue Service Criminal Investigative
Division a one-week course on combating terrorist financing and money laundering for 483
international students from Algeria, Bahrain, Bosnia and Herzegovina, Burkina Faso, Cape
Verde, Egypt, Gabon, Guinea-Bissau, Iraq, Jordan, Morocco, Nigeria, Republic of Congo, Saudi
Arabia, Senegal, and United Arab Emirates.
9
At the FBI Academy, the FBI included blocks of instruction on combating terrorist financing
and/or money laundering for 37 students participating in Session #14 of the Latin American Law
Enforcement Executive Development Seminar; the students were from Argentina, Belize, Brazil,
Chile, Costa Rica, Dominican Republic, El Salvador, Honduras, Mexico, Nicaragua, Panama,
Paraguay, Peru, Spain, Uruguay and Venezuela. The FBI included similar blocks of instruction
for 18 students participating in Session #5 of the Arabic Language Law Enforcement Executive
Development Seminar; the students were from Bahrain, Egypt, Iraq, Jordan, Palestine, Qatar,
Saudi Arabia, and Sudan.
Also during 2010, the FBI Academy hosted the first session of the Afghan Law Enforcement
Executive Development Seminar and provided blocks of instruction on terrorist financing to 23
students from Afghanistan. In addition, the FBI Academy hosted the first session of the Mexican
Law Enforcement Executive Development Seminar and provided blocks of instruction on
terrorist financing to 32 students from Mexico. In addition, as part of the FBIs Pacific Training
Initiative Session #23, the FBI included terrorist financing instruction for 50 participants from 13
countries; the students were from Australia, Cambodia, China, Hong Kong, India, Indonesia,
Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand, and the United States.
Federal Deposit Insurance Corporation (FDIC)

In 2010, the Federal Deposit Insurance Corporation (FDIC) continued to work in partnership with several
Federal agencies and international groups to combat money laundering and inhibit the flow of terrorist
funding. These efforts were focused primarily on training and outreach initiatives. In partnership with
the U.S. Department of State, the FDIC hosted three anti-money laundering and counter terrorist
financing (AML/CFT) training sessions for 65 representatives from Afghanistan, Argentina, Ghana, Iraq,
Jordan, Kuwait, Mali, Mauritania, Morocco, Nigeria, Pakistan, Paraguay, Qatar, Senegal, and Turkey.
The training sessions addressed the AML examination process, suspicious activity monitoring, customer
due diligence, and foreign correspondent banking risks and controls.
During the year, the FDIC met with 23 supervisory and law enforcement representatives from Bosnia and
Herzegovina, Bulgaria, Estonia, Finland, Hungary, Italy, Kosovo, Lithuania, Namibia, Poland, Romania,
Slovenia, Spain, Sweden, Ukraine and Zambia to discuss AML issues. Topics included examination
policies and procedures, the USA PATRIOT Act, suspicious activity reporting requirements, and
government information sharing mechanisms.
Financial Crimes Enforcement Network (FinCEN),

Department of Treasury
The Financial Crimes Enforcement Network (FinCEN) is a bureau of the U.S. Department of the
Treasury and is the U.S. financial intelligence unit (FIU). In 2010, FinCEN hosted
representatives from a variety of foreign government agencies, focusing on topics such as money
laundering trends and patterns, the Bank Secrecy Act, the USA PATRIOT ACT,
communications systems and databases, and case processing. A number of these visitors were
participants in the U.S. Department of States International Visitor Leadership Program.
FinCEN assists new or developing FIUs that it is co-sponsoring for membership in the Egmont
Group of FIUs. The Egmont Group is comprised of FIUs that cooperatively agree to share
financial intelligence and has become the standard-setting body for FIUs. FinCEN is currently
co-sponsoring FIUs from nine jurisdictions for Egmont Group membership: China, Dominican
Republic, Ghana, Jordan, Kuwait, Oman, Pakistan, Tanzania, and Yemen. As a member of the
Egmont Group, FinCEN also works multilaterally through its representative on the Egmont
10
Training Working Group to design, implement, and instruct at Egmont-sponsored regional

training programs for Egmont Group members as well as Egmont candidate FIUs.
FinCEN regularly engages with foreign FIUs in order to exchange information on operational
practices and issues of mutual concern. The participants in these exchanges share ideas,
innovations, and insights that lead to improvements in such areas as analysis, information flow,
and information security at their home FIUs, in addition to deeper and more sustained
operational collaboration. In 2010, FinCEN conducted analyst exchanges with the FIUs of
Afghanistan, Brazil, Paraguay, the Philippines, and Senegal.
Immigration and Customs Enforcement, Department of

Homeland Security (DHS)
During Fiscal Year 2010, ICE-Homeland Security Investigations (HSI), the investigative arm of
the U.S. Department of Homeland Security (DHS), continued its commitment to providing
financial investigative training to countries around the world. The HSI Financial, Narcotics, and
Special Operations Division, in conjunction with the HSI Office of International Affairs
conducted and/or participated in training to foreign law enforcement, regulatory agencies, and
bank and trade officials in 13 foreign countries. Utilizing their broad experience and expertise in
conducting international financial investigations, HSI designed the training to provide the
attendee with the critical skills necessary to successfully identify and investigate financial crimes
and included such topics as an introduction to money laundering, bulk cash smuggling, asset
forfeiture, unlicensed money services business/informal value transfer systems, prepaid access
devices, and interviewing techniques.
Bulk Cash Smuggling
Using primarily U.S. Department of State funding, HSI provided bilateral and multilateral
training and technical assistance to host nations which consisted of blocks of training detailing
the various aspects of money laundering and the interdiction and investigation of bulk cash
smuggling (BCS) for over 591 representatives from 13 countries. Notably, Nigeria, Saudi
Arabia, Egypt, Indonesia, Algeria, India, Morocco, the Dominican Republic and HSI personnel
participated in one of the first money laundering training seminars ever conducted in Sanaa,
Yemen.
Through the U.S. Department of States International Law Enforcement Academy (ILEA)
programs, HSI conducted 16 financial investigations and anti-money laundering training
programs for over 700 participants at various ILEA Training Centers located in Peru, Botswana,
El Salvador, and Thailand.
In FY10, HSI continued its partnership with the Organization of American States (OAS) and the
United Nations Office on Drugs and Crime (UNODC). HSI participated in a sub-regional
workshop in Lima, Peru dedicated to the interdiction and investigation of cross border bulk cash
smuggling. More than 40 financial intelligence analysts from financial intelligence units,
immigration and customs officials, and prosecutors from Argentina, Bolivia, Brazil, Chile,
Colombia, Ecuador, Paraguay, Peru and Uruguay participated in the workshop.
Trade Transparency Units (TTUs)
Trade Transparency Units (TTUs) are designed to help identify significant disparities in import
and export trade documentation and identify anomalies related to cross-border trade that are
indicative of international trade-based money laundering. Trade is the common denominator in
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most of the worlds alternative remittance systems and underground banking systems. Trade-
based value transfer systems have also been used in terrorist financing. TTUs generate, initiate,
and support investigations and prosecutions related to trade-based money laundering, the illegal
movement of criminal proceeds across international borders, the abuse of alternative remittance
systems, and other financial crimes. By sharing trade data, HSI and participating foreign
governments are able to see both sides of import and export transactions for commodities
entering or exiting their countries, thus assisting in the investigation of international money
laundering organizations. The number of trade-based money laundering investigations emerging
from TTU activity continues to grow.
The United States established a TTU within DHS/HSI that generates both domestic and
international investigations. With funding from the U.S. Department of States Bureau of
International Narcotics and Law Enforcement Affairs (INL), HSI worked to expand the network
of operational TTUs beyond Colombia, Brazil, Argentina, Paraguay and Mexico. In 2010,
Panama officially became the newest member of the TTU network. As part of this new TTU
initiative, HSI provided IT equipment and training as well as increased support to this newly
established TTU to ensure its successful development.
In 2010, HIS updated the technical capabilities of existing TTUs and trained new and existing
TTU personnel from Brazil, Colombia, Paraguay, Argentina, Mexico, and Panama, as well as
members of their financial intelligence units. Additionally, HSI strengthened its relationship
with the TTUs by deploying temporary and permanent personnel overseas to work onsite and
provide hands-on training. These actions have continued to facilitate information sharing
between the USG and foreign TTUs in furtherance of ongoing joint criminal investigations.
Other HSI Programs
In 2010, HSI expanded its highly successful Operation Firewall, a joint strategic bulk cash
smuggling initiative with U.S. Customs and Border Protection (CBP) to provide hands-on
training and capacity building to law enforcement officials around the globe. Operation Firewall
was designed to address the threat posed by the bulk cash smuggling via the key facets of
transportation to include movement within the continental United States and cross-border
smuggling through the various air, sea, and land ports of entry. In FY 2010, Operation Firewall
resulted in 1,367 seizures totaling in excess of $133 million in U.S. currency and negotiable
instruments and to date has resulted in the seizure of more than $411 million dollars.
Under the HSI Cornerstone initiative, training was designed and developed to provide the
financial and trade sectors with the necessary skills to identify and develop methodologies to
detect suspicious transactions indicative of money laundering and criminal activity. In
furtherance of the Cornerstone initiative, HSI has dedicated field and headquarters agents who
are charged with providing training to the financial and trade communities on identifying and
preventing exploitation by criminal and terrorist organizations. In FY 2010, HSI Cornerstone
liaisons conducted 2,419 outreach presentations for more than 45,179 industry professionals in
the U.S. and abroad.
Internal Revenue Service (IRS), Criminal Investigative

Division (CID), Department of Treasury
In 2010, the U.S. Internal Revenue Service (IRS) Criminal Investigation Division continued its
involvement in international training and technical assistance efforts designed to assist
international law enforcement officers in detecting tax, money laundering, and terrorist financing
12
crimes. To complement its independent programs, IRS-CID partnered with several USG and
multilateral organizations, including agencies and offices of the U.S. Departments of State,
Justice, Treasury and Defense; INTERPOL; the Organization for Economic Co-operation and
Development (OECD); and the governments of Greece, Norway and South Korea to deliver a
variety of programs. Training consisted of Basic and Advanced Financial Investigative
Techniques, and topics addressing the detection and deterrence of money laundering and terrorist
financing. Each course was tailored to meet the needs of the relevant participating countries,
with varying emphasis on drug trafficking, corruption, methods of proof, tax crimes, customs
violations and mock investigations.
Financial Investigative Techniques Training
IRS-CID conducted Financial Investigative Techniques (FIT) courses in the following locations:
Bosnia and Herzegovina Participants included 57 representatives from the Prosecutors
Office, Financial Intelligence Department, State Investigative and Protection Agency, Financial
Police, Tax Authorities and other police organizations.
Indonesia Seventy-two participants from the Indonesia National Police, Attorney Generals
Office, Financial Transaction Reports and Analysis Center, Immigration, and Corruption
Commission attended this training. Additionally, prosecutors from Timor-Leste participated.
South Africa Ninety-two participants from the South African Revenue Service received
training in Pretoria, Capetown and Johannesburg.
Albania Attendees included 34 participants assigned to the Albanian Joint Investigative Units.
Another course included 30 members of the newly formed Criminal Investigations section of the
Albanian Tax Authority.
Colombia The 29 participants included investigators from the Colombian National Police,
members of the Attorney Generals investigative body and analysts from the Colombian
Financial Investigative Unit.
Cambodia Approximately 35 members of the National Police Counter Drugs Force, Financial
Institutions, Financial Investigative units and Anti-Corruption units from Cambodia received
training.
Mexico The training was presented to 53 Mexican Federal Police officers, investigators,
prosecutors, and investigative analysts. The course is part of the Merida initiative which
supports bilateral cooperation between the US and Mexico. Also, two advanced FIT classes
were delivered to 52 Mexican prosecutors, accountants, investigative analysts and federal agents.
Estonia A modified FIT training course was delivered to investigators from the Estonia Tax
and Customs Board and prosecutors. The training was provided at the request of the Estonian
Tax and Customs Board.
Norway A course funded by the government of Norway was presented to 24 participants,
including police investigators, customs officers, and investigators/advisers to the Norwegian Tax
Directorate that specialized in economic crimes, customs violations, and/or tax crimes.
Greece Approximately 60 participants from the Hellenic National Police and the SDOE, a
Special Financial Investigative Unit, participated in FIT courses based on a direct agreement
with the government of Greece.
South Korea IRS-CID trained 30 participants from the National Tax Service in cooperation
with the South Korean government.
13
Other Training Initiatives

Various non-FIT training initiatives were delivered by IRS-CID in conjunction with other
agencies. These include:
Thailand - The Transnational Crime Affairs Section sponsored three Complex Financial
Investigations (CFI) courses given to a total of 159 participants. Participants included members
of the Anti-Money Laundering Office (AMLO), bank examiners, the Royal Thai Police, and
Thailand Border Patrol.
Mexico -- The International Money Laundering/Criminal Organizations and Illicit Financing
course introduced 215 Mexican federal prosecutors, accountants, and law enforcement officials
to various aspects of the U.S. judicial system including: money laundering, direct examination,
Ponzi schemes, and forfeiture.
Two sessions of Evidence Seizure and Chain of Custody introduced Mexican law enforcement
officials to the U.S. based legal system for executing search warrants, seizing evidence, and
preserving the chain of custody. The goal is to help prepare Mexican federal officials to
investigate and prosecute criminal cases using the accusatorial system.
An Electronic Crimes and Financial Crime Scene presentation was given to money laundering
investigators of the Federal Police Anti-Money Laundering Unit and Ministry of Justice Judicial
Police.
IRS-CID participated in delivering training to combat terrorist financing and money laundering
in Algeria, Bosnia and Herzegovina, Egypt, Iraq, Jordan, Morocco, Nigeria, Philippines,
Senegal, and United Arab Emirates.
International Law Enforcement Academy Training
IRS-CID provided instructor and course delivery support to the State Department International
Law Enforcement Academies (ILEA) located in Bangkok, Thailand; Budapest, Hungary;
Gaborone, Botswana; and San Salvador, El Salvador.
At ILEA Bangkok: IRS-CID participated in one Supervisory Criminal Investigator Course.
IRS-CID also participated in three sessions of Complex Financial Investigations. The 159
participants represented various law enforcement agencies from the following countries: Brunei,
Cambodia, China, Hong Kong, Indonesia, Laos, Macau, Malaysia, Philippines, Singapore,
Thailand, Timor-Leste and Vietnam.
At ILEA Budapest: IRS-CID participated in delivering five sessions of Financial Investigative
Techniques training. Participating countries included: Albania, Bosnia and Herzevonia,
Bulgaria, Croatia, Georgia, Hungary, Kazakhstan, Kosovo, Macedonia, Moldova, Montenegro,
Serbia, Slovenia, Tajikistan and Ukraine. IRS-CID provided a class coordinator for ILEA 78
who was responsible for coordinating and supervising the participants daily duties and
activities. IRS-CID also provided the key note speaker for the graduation of ILEA 78.
At ILEA Gaborone: IRS-CID participated in four Law Enforcement Executive Development
programs. Countries that participated were Angola, Botswana, Cameroon, Djibouti, Ethiopia,
Ghana, Guinea, Mauritius, Mozambique, Republic of Congo, Seychelles, South Africa, Uganda
and Zambia.
At ILEA San Salvador: IRS-CID assisted in the delivery of four FIT courses for the Law
Enforcement Management Development Programs (LEMDP). Participating countries were
Antigua and Barbuda, Argentina, Bahamas, Barbados, Brazil, Chile, Colombia, Costa Rica,
14
Dominica, El Salvador, Grenada, Guatemala, Mexico, Paraguay, Peru, St. Kitts and Nevis, St.
Lucia, St. Vincent and the Grenadines, and Uruguay.
IRS-CID led a Financial Investigative Techniques/Money Laundering course funded by the
ILEA at the Regional Training Center in Lima, Peru. The 33 participants from Argentina,
Brazil, Chile, and Peru were members of their respective national police agencies and
prosecutors offices.
Non-routine Training Events
Employees of IRS-CID International Operations also completed several non-routine training
events.
Members from IRS-CID International Operations attended a joint Mexico-US workshop that
focused on arms trafficking and money laundering by Mexican narcotics cartels. The conference
sponsored by the U.S. Ambassador to Mexico, brought together high ranking law enforcement,
prosecutorial and regulatory officials from both countries.
In conjunction with the Office of Economic Development and Cooperation (OECD) and the
Treasury Executive Office for Asset Forfeiture, IRS-CID led a multi-national training team to
develop and present a three-day training symposium in Washington D.C. The symposium
consisted of money laundering and bribery awareness for tax examiners. The course was
attended by 58 examiners and auditors of 20 countries. IRS-CID also attended an OECD
meeting in Paris, France.
Members of International Operations participated in meetings with the International Criminal
Police Organization (INTERPOL) and with a delegation from South Korea. INTERPOLs
working group on Money Laundering and Terrorist Financing met to provide advice on
developing INTERPOLs ability to facilitate money laundering and terrorist financing
investigations through effective information sharing. The meeting with officials from South
Korea culminated in the signing of a Simultaneous Criminal Investigation Program between the
IRS and the National Tax Service of South Korea.
IRS-CID Narcotics and Counterterrorism (NCT) participated in the South Asia Regional
Workshop held in Kathmandu, Nepal. NCT discussed domestic/international coordination of
investigations and how IRS-CID can add value to terrorism investigations.
A tax and fraud training session organized by the U.S. Department of Justices Office of
Overseas Prosecutorial Development, Assistance and Training Resident Legal Advisor together
with the Georgian Ministry of Justice Prosecutors Service was held in the Republic of Georgia.
The training, presented to 120 Ministration of Finance prosecutors and investigators, focused on
case development, case assessment and evidence gathering.
IRS-CID attach in Australia participated in two training sessions. A seminar for the
International Association of Financial Crime Investigators focused on the IRS investigative
mission and the benefits of law enforcement working together on a global level. Attendees
included 130 participants from various Australian agencies and other fraud investigative entities.
Another session presented to the Australian Taxation Office (ATO) provided an overview of the
IRS and CIDs international mission. This training included approximately 50 participants from
several sections within ATO.
Assessments
Training assessments for Bosnia and Herzegovina, Cambodia and the Philippines were
completed during 2010.
15
Office of the Comptroller of the Currency (OCC), Department

of Treasury
The U.S. Department of the Treasurys Office of the Comptroller of the Currency (OCC) works
with other federal banking agencies to provide training to foreign banking supervisors. The
OCC sponsored several initiatives to provide anti-money laundering/counterterrorist financing
(AML/CFT) training to foreign banking supervisors in 2010. The OCC organized and conducted
its annual AML/CFT School in Washington, D.C. The school is designed specifically for
foreign banking supervisors to increase their knowledge of money laundering and terrorist
financing typologies and improve their ability to detect these activities, thus strengthening their
national AML/CFT regimes. Banking supervisors from 12 countries, including Australia, Brazil,
China, India, Indonesia, Italy, Malaysia, Netherlands, Philippines, South Korea, Sri Lanka,
Turkey, and Uruguay attended the school held at the OCCs Washington, D.C., headquarters.
OCC officials also met with a delegation of South Korean FIU supervisors who visited
Washington. Discussions focused on the U.S. bank supervision system, the OCCs risk based
supervisory approach, and AML enforcement. The OCC also hosted two foreign bank regulators
from Uruguay and Argentina to participate in a three week OCC AML examination.
OCC continued its industry outreach efforts to the International banking community. OCC
officials delivered AML/CFT presentations at the MoneyLaundering.com 15 th Annual Anti-
Money Laundering Conference, attended by more than 1,000 AML professionals from 50
countries; and the institute of International Bankers Annual Anti-Money Laundering Seminar,
hosting attendees from 30 countries. OCC also participated in an AML/CFT presentation and
conducted a separate workshop at the Kuwait Anti-Money Laundering Conference. The OCC
also provided instructors for a workshop organized by the Association of Banking Supervisors of
the Americas (ASBA) and hosted by the Superintendencia de Banca y Seguros, Peru that was
attended by 29 supervisors from Argentina, Bolivia, Brazil, Ecuador, Paraguay, and Peru.
Office of Overseas Prosecutorial Development, Assistance and

Training, the Asset Forfeiture and Money Laundering Section,
& Counterterrorism Section (OPDAT, AFMLS, and CTS),
Department of Justice
Training and Technical Assistance
The U.S. Department of Justices (DOJ) Office of Overseas Prosecutorial Development,
Assistance, and Training (OPDAT), assesses, designs, and implements training and technical
assistance programs for U.S. criminal justice sector counterparts overseas. OPDAT draws upon
the anti-money laundering/counter-terrorist financing (AML/CFT) expertise within DOJ,
including that of the Asset Forfeiture and Money Laundering Section of DOJs Criminal
Division (AFMLS/Criminal Division), the Counterterrorism Section (CTS) and the Office of
Law and Policy of the National Security Division 1 (collectively, NSD) , and U.S. Attorneys
Offices to train and advise foreign AML/CFT partners. Much of the assistance provided by
OPDAT, AFMLS, NSD and other DOJ components is provided with funding from the U.S.
1
The mission of the National Security Division is to combat terrorism and other threats to
national security.
16
Department of State; funds are also provided by the U.S. Agency for International Development
and the Millennium Challenge Corporation.
In addition to training programs targeted to a countrys immediate needs, OPDAT also provides
long-term, in-country assistance through resident legal advisors (RLAs). RLAs are federal
prosecutors who provide in-country technical assistance to improve capacity, efficiency, and
professionalism within foreign criminal justice systems. RLAs are posted to U.S. embassies to
work directly with counterparts in foreign legal and law enforcement agencies, including
ministries of justice, prosecutors offices, and offices within the judiciary branch. To promote
reforms within the criminal justice sector, RLAs provide assistance in legislative drafting;
modernizing institutional structures, policies and practices; and training law enforcement
personnel, including prosecutors, and judges. RLAs also work in collaboration with DOJs
International Criminal Investigative Training Assistance Program (ICITAP) to train police and
other investigative officials. OPDATs work is coordinated closely with that of other donors and
multilateral organizations. For all programs, OPDAT draws upon expertise from DOJs
Criminal Division, NSD, AFMLS, and other DOJ components as needed.
In 2010, OPDAT, AFMLS, and CTS met with and provided presentations to more than 244
international visitors from more than 20 countries on AML and/or CFT topics. Presentations
covered U.S. policies to combat terrorism, U.S. legislation, issues raised in implementing new
legislative tools, and the changing relationship of criminal and intelligence investigations. The
meetings also covered money laundering and material support statutes, and the Classified
Information Procedures Act. Of great interest to visitors is the balancing of civil liberties and
national security issues, which is also addressed.
Money Laundering/Asset Forfeiture/Fraud
In 2010, OPDAT organized training for foreign judges; prosecutors; other law enforcement
officials; legislators; customs, supervisory, and FIU personnel; and private sector participants,
and provided assistance in drafting anti-money laundering statutes compliant with international
standards. Such assistance enhanced the ability of participating countries to prevent, detect,
investigate, and prosecute money laundering and to make appropriate and effective use of asset
forfeiture. The content of individual technical assistance programs varied depending on the
participants specific needs, but topics addressed in 2010 include the investigation and
prosecution of complex financial crimes, economic crimes, money laundering, and corruption;
the use of asset forfeiture as a law enforcement tool; counterfeiting; health care fraud; and
international mutual legal assistance.
OPDAT-provided Training and Technical Assistance
In 2010, OPDAT led or participated in training programs and seminars addressing the following
topics, all tailored to the region or individual country: asset forfeiture seminars for Southeast
Europe, Indonesia, Cameroon, Moldova, Montenegro, and Mexico; complex financial crime
investigation and prosecution programs for Jordan, Bangladesh, Turkey, Indonesia, Ukraine,
Kosovo, Albania and Mexico; anti-corruption programs for Indonesia, Georgia, Kyrgyzstan,
Albania, Montenegro, Armenia, Kazakhstan, Ukraine, Serbia, Tajikistan, Yemen, Liberia,
Cameroon, Rwanda, Uganda, Tanzania, and Sierra Leone; mutual legal assistance programs for
Ukraine and Southeast Europe, Indonesia, and Mexico; and AML/CFT-related seminars for
Saudi Arabia, Jordan, Uganda, Bangladesh, Indonesia, Kuwait and Turkey. Additionally,
Turkish, Bangladeshi and Indonesian officials participated in study tours to the United States to
observe how the U.S. investigates and prosecutes complex financial crimes and corruption.
17
In February and September 2010, with support from NSD, OPDAT organized conferences in
Turkey designed to promote regional counter-terrorism cooperation. The first conference
consisted of representatives from Albania, Bulgaria, Greece, Macedonia, and Turkey, while the
second conference included representatives from Egypt, Jordan, Lebanon, and Turkey.
In March, OPDAT , again with the support of NSD, hosted a study visit to Washington for
Turkish Ministry of Justice and financial crimes agency officials charged with drafting and
refining legislation related to criminalizing terrorist financing, freezing terrorist assets, and
designating terrorist organizations.
In May, OPDAT hosted a Southeast Asia Regional Asset Forfeiture Conference in Jakarta for
representatives from twelve Southeast Asian Countries (Vietnam, Laos, Thailand, Bangladesh,
Malaysia, Indonesia, Hong Kong, Taiwan, Timor Leste, France, United States and Australia).
The conference focused on encouraging countries in the region to enact asset forfeiture
legislation and use it effectively through international cooperation.
In June, OPDAT co-sponsored a bulk cash smuggling training program for Turkish law
enforcement officers in Istanbul, Turkey. The training focused on the interdiction and
investigation of cross-border bulk cash smuggling, with emphasis on money laundering and
terrorist financing.
In July, OPDAT co-sponsored two sessions of a workshop focusing on enforcement measures
against money laundering, terrorist finance, and other financial crimes for Jordanian officials in
Amman, Jordan. The program emphasized the respective roles of financial crimes analysts,
investigators, prosecutors and judges in addressing financial crimes.
In September, OPDAT co-sponsored with the Treasury Department a regional workshop
examining the roles of the financial intelligence unit, law enforcement officers, and prosecutors
in Amman, Jordan for officials from Jordan, Egypt, Saudi Arabia, Iraq, Lebanon, Yemen, and
the Palestinian Authority. The program provided a framework for discussion of stakeholder
roles in money laundering efforts, financial investigative techniques, and international
cooperation.
Terrorism/Terrorist Financing
OPDAT, AFMLS, and CTS/NSD, with the assistance of other DOJ components, play a central
role in providing technical assistance to foreign counterparts to attack the financial
underpinnings of terrorism and to build legal infrastructures to combat it. In this effort, OPDAT,
CTS/NSD, and AFMLS work as integral parts of the interagency U.S. Terrorist Financing
Working Group (TFWG), co-chaired by the State Departments INL Bureau and the Office of
the Coordinator for Counterterrorism (S/CT).
OPDAT-Provided Training and Technical Assistance
The TFWG supports four RLAs assigned overseas, located in Bangladesh, Kenya, Turkey, and
the United Arab Emirates (UAE). The RLA for the UAE is stationed at the U. S. Embassy in
Abu Dhabi, UAE, and is responsible for OPDAT program activities in the UAE, Saudi Arabia,
Kuwait, Qatar, Jordan, Yemen, Oman, and Bahrain. The TFWG also supports OPDAT
implemented projects in Indonesia, working through the INL-funded RLA posted there. The
activities of the RLAs consist not only of capacity-building with host country justice sectors.
Working in countries deemed to be vulnerable to terrorist financing, RLAs focus on money
laundering and financial crimes and developing counter-terrorism legislation that criminalizes
terrorist acts, terrorist financing, and the provision of material support or resources to terrorist
18
organizations. The RLAs implement these programs by providing training, assistance in

legislative drafting and support for the countrys AML/CFT efforts. Some highlights of the
RLAs efforts in 2010 include:
In Bangladesh, OPDAT organized a U.S.-based study visit for senior members of Bangladeshs
law enforcement community and provided technical assistance to the Bangladeshi National
Coordinating Committee formed to combat financial crimes by reviewing Bangladeshs
AML/CFT legislation. The US visit helped to facilitate a better understanding between the US
and Bangladesh of their respective anti-terror efforts, enhanced multi-lateral counter-terrorism
ties, and stimulated possible future actions related to anti-money laundering; combating terrorism
and terrorist financing; and asset recovery and mutual legal assistance.
In Indonesia, the RLA continued to engage the Attorney Generals Terrorism and Transnational
Crime Task Force, which OPDAT has supported since its establishment as an operational unit in
2006. The task force is responsible for prosecuting significant cases involving four key areas:
terrorism, money laundering, trafficking in persons, and cyber crime.
In Turkey, the RLA hosted regional conferences designed to promote regional counter-terrorism
cooperation. In this ongoing project, the RLA continues to focus on regional, pro-active
strategies to fight terrorism and its related crimes. This project is designed to foster mentoring
relationships among law enforcement of the respective participating countries.
In Kenya, the RLA provided support to the Kenyan government, U.S. authorities, and the
international community in the prosecutions of Somali pirates. The RLA addressed Kenyas
piracy law, criminal elements of piracy, best practices in these cases, and the need for
modernizing evidence practice in Kenya through multiple training sessions delivered in Kenya.
The RLA also delivered counter-piracy training programs to officials from the Seychelles and
Mauritius.
In the UAE and Gulf Region, the RLA focused on initiatives involving enforcement measures
against money laundering and financial crimes in Jordan, and assistance to regulators, customs
personnel and prosecutors to combat bulk cash smuggling in the UAE. These efforts are part of
a region-wide initiative to address threat finance and money laundering.
In 2010, in addition to the programs listed under the Money Laundering/Asset Forfeiture/Fraud
section, the RLAs conducted or participated in the following training programs and seminars:
international cooperation in combating terrorism in Uganda, terrorist financing investigations
and prosecutions in Qatar, Saudi Arabia, Bangladesh, and Indonesia; and counter-piracy
seminars in Kenya, Mauritius, Seychelles and Tanzania.
Office of Technical Assistance (OTA), Treasury Department

The U.S. Department of the Treasurys Office of Technical Assistance (OTA) is located within
the Office of International Affairs. OTA has five training and technical assistance programs:
revenue policy and revenue administration, government debt issuance and management, budget
policy and management, banking and financial services, and economic crimes. The economic
crimes program offers technical assistance to combat money laundering, terrorist financing, and
other financial crimes.
Fifty-three experienced Resident Advisors and Intermittent Advisors comprise the Economic
Crimes Team (ECT). These advisors provide diverse expertise in the development of anti-
money laundering/counter-terrorist financing (AML/CFT) regimes, and the investigation and
prosecution of complex financial crimes. The ECT is divided into three geographic areas, each
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of which is managed by a full-time Regional Advisor: Europe and Asia, Africa and the Middle
East, and the Americas.
OTA receives direct appropriations funding from the U.S. Congress, and funding from the U.S.
Department of States Bureau for International Narcotics and Law Enforcement Affairs, U.S.
Agency for International Development (USAID) country missions, and the Millennium
Challenge Corporation (MCC).
Assessing Training and Technical Assistance Needs
The goal of OTAs Economic Crimes program is to build the capacity of host countries to
prevent, detect, investigate, and prosecute complex international financial crimes by providing
technical assistance in three primary areas: combating money laundering, terrorist financing, and
other financial crimes; fighting organized crime and corruption; and building capacity for
financial law enforcement entities.
Before initiating training or technical assistance, OTA Economic Crimes Advisors conduct
comprehensive assessments to identify needs and to formulate responsive assistance programs.
These needs assessments examine legislative, regulatory, law enforcement, and judicial
components, and include the development of technical assistance work plans to enhance a
countrys efforts to fight money laundering, terrorist financing, organized crime and corruption.
In 2010, OTA conducted assessments and/or developed new technical assistance plans in Bosnia
and Herzegovina, Costa Rica, El Salvador, Georgia, Guatemala, Guyana, Honduras, and
Uruguay.
Regional and Resident Advisors
OTA Regional Advisors and Resident Advisors continued international support in the areas of
money laundering and terrorist financing through conducting bilateral assessments; organizing
and participating in regional training events and international workshops and seminars; working
collaboratively with international donors; and supporting FATF-style regional bodies in the
delivery of technical assistance and other direct and indirect technical assistance activities.
Africa and Middle East: The Regional Advisor serves as the U.S representative for the MENA
FATF Technical Assistance and Topology Working Group and is a member of U.S. delegations
to three FATF-style regional bodies in his region. The region has resident advisors in Botswana,
Jordan, Iraq, Ghana and Morocco and intermittent projects in Sao Tome and Principe, Lesotho,
Palestine, Algeria and Saudi Arabia.
In Eastern and Southern Africa, OTA placed a resident advisor in Botswana to work with the
newly established financial intelligence unit (FIU) and to also provide assistance on an
intermittent basis to Lesotho as that country implements its AML/CFT legislation and establishes
an FIU. In Lesotho, OTA provided assistance in identifying required amendments to AML/CFT
legislation, drafted implementing AML/CFT regulations, drafted a position description for the
FIU Directors position, reviewed the proposed FIU budget, and assisted in planning outreach
activities for public and private institutions. In Botswana the OTA resident has finalized an
AML/CFT technical assistance work plan, trained FIU staff, assisted in the development of a
2011 budget for the FIU, and played a key role in getting an interim FIU Director appointed.
In West Africa, a resident advisor was placed in Ghana and is co-located in the FIU, providing
assistance to bring it to an operational level and to address deficiencies in the countrys
AML/CFT regime. In 2010, the advisor focused on assisting the FIU with the FATF
International Cooperation Review Group (ICRG) monitoring process, assisted in the 2011 budget
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development, improved the FIU data management process, assisted in the development of a
currency declaration form, and coordinated an OTA Information Technology (IT) assessment to
initiate the IT development process for the FIU.
In North Africa, a resident advisor was placed in Morocco in December 2010 to provide
technical assistance to the FIU, Central Bank and other AML/CFT stakeholders. Technical
assistance to Algeria will continue and focus on AML/CFT gaps identified in its recently adopted
mutual evaluation report.
In the Middle East, a resident advisor was placed in Iraq with a focus to work with Iraqs Money
Laundering Reporting Office (MLRO) and other AML/CFT stakeholders in passing new
legislation and improving regulatory, investigative and prosecutorial capacity to combat serious
financial crimes. OTA participated in anti-money laundering and anti-corruption workshops for
Iraqi officials and mentored investigators and prosecutors on complex money laundering and
terrorist financing cases.
Europe and Asia: OTAs Regional Advisor for is a member of the US delegation to the Asia
Pacific Group on Money Laundering (APG) and actively participates in the activities of the
APGs Technical Assistance and Training group. In early 2010, OTA placed two additional
resident advisors in Afghanistan: one with the Major Crimes Task Force (MCTF); and one
banking AML/CFT specialist to work with the AML/CFT section of the supervisory section of
the Central Bank. OTA also placed Economic Crimes RAs in Vietnam and Kosovo in early
2010.
The RA in Afghanistan continued to focus on development of the Afghan FIU. OTA placed a
second advisor with the Afghan MCTF to teach financial investigative techniques, mentor
investigation of economic crimes, mentor processes associated with asset seizure, and orient
investigative conduct toward prosecution. The MCTFs responsibility for economic crimes
investigations was expanded in 2010 to include tax evasion by individual and commercial
entities in which the FIU occupies a critically supportive role. Two one week bulk cash
smuggling & money laundering training courses were developed and conducted for the MCTF as
part of joint OTA/DHS Immigration and Customs Enforcement-Homeland Security
Investigations training endeavors. Significant improvement, regarding the extent and quality of
routine coordination occurring between the MCTF and FIU, was achieved in 2010. OTA also
helped prepare the Afghan Government for the IMF mutual evaluation of its AML/CFT regime.
OTA placed a third advisor in the supervision department of Afghanistans Central Bank (DAB)
to provide mentoring on hawala licensing and bank and hawala examination procedures. This
advisor has developed and conducted training on bank AML/CFT inspection procedures for
DAB staff.
OTA placed a new resident advisor in Kosovo in early 2010. The OTA resident advisor
provided assistance in the drafting and reviewing of Kosovos Law on the Prevention of Money
Laundering and Terrorist Financing, which was passed by Parliament and subsequently signed
by the President in November 2010. OTA continues to provide mentoring, advice, and other
development assistance to FIU management, analysts and other staff. OTA initiated a working
group to develop a Suspicious Activities Report awareness training program that will be
delivered to Kosovos financial institutions.
The resident advisor in the Mekong Region continued to deliver resident-based TA to Vietnam,
Cambodia, and Laos according to assessed needs in each jurisdiction.
Western Hemisphere: During 2010 OTA substantially increased its presence in the Western
Hemisphere, placing resident advisors in Mexico (March), Costa Rica (June), Guatemala
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(August), and Honduras (September). In Mexico, OTA continued its work with that countrys
law enforcement community providing Financial Investigative Techniques as well as workshops
to foment interagency coordination in advanced money laundering investigations. Additionally,
OTA began work in earnest with Mexicos Tax and National Bank authorities in the
development of a supervisory regime for money remitters. OTA continued its work with the
FIUs of Mexico and Uruguay by providing training seminars and mentoring.
OTAs resident advisor in Paraguay continued work with Customs to enhance its capacity to
fight smuggling and tax evasion, and the undervaluation and under-registration of goods,
improve its internal control and investigation capability and, as a result, reduce corruption in the
customs sector. Controls over the importation and exportation of goods have been substantially
enhanced; opportunities for corruption substantially decreased; and, customs revenues have
increased. OTA also continued work in Paraguay to help that countrys FIU renew and stand up
its IT system.
AML/CFT Training
OTA specialists delivered AML/CFT courses and other advice-based services to government and
private sector stakeholders in a number of countries. Course topics included money laundering
and financial crimes investigations; identification and development of local and international
sources of information; operations and regulation of banks and non-bank financial institutions
and the gaming sector, including record keeping; investigative techniques; financial analysis
techniques; forensic evidence; computer assistance and criminal analysis; interviewing; case
development, planning, and organization; report writing; and, with the assistance of local legal
experts, rules of evidence, mutual legal assistance and cooperation, search, and seizure, and asset
seizure and forfeiture procedures.
In Sao Tome and Principe OTA continues implementation of an MCC-funded project with
customs authorities to modernize operations. Efforts have led to the passage of a modern and
internationally compliant Customs law, and work is progressing on installing a modern
automated system to improve the processing, transparency, and security of goods moving
through the seaport and airport, and improving infrastructure and capacity to execute customs
operations, including inspection and counter smuggling.
In Algeria, Palestine, and Saudi Arabia advisors provided technical assistance to enhance the
operational capacity of FIUs. This assistance involved institutional building, analytical training,
IT assessments, budget and facilities development, strategy development, legislative review,
regulation drafting, mentoring, cross border monitoring and outreach to public and private
institutions on AML/CFT responsibilities. During 2010, OTA worked with prosecutors from the
Palestinian Attorney Generals office providing mentoring in complex financial crimes cases. A
Financial Investigative Techniques Course (FIT) was conducted for the Saudi Arabia FIU and
other officials in September 2010. A regional FIU workshop focusing on the FIU relationship
with law enforcement and international cooperation was conducted for officials from Jordan,
Saudi Arabia, Egypt, Palestine Authority, Yemen, and Iraq in September 2010. A study tour
visit was organized for Jordanian FIU officials to visit the Lebanese Special Investigation
Commission (SIC), Lebanons FIU.
A regional Middle East North Africa AML/CFT training project, initiated in 2007 and funded by
USAID, concluded in September 2010 after conducting eight major regional events covering
topics such as corruption, bulk cash smuggling, task force investigations, financial analysis,
financial investigations, targeted economic sanctions, FIU operations and international
cooperation. Approximately 235 individuals participated in these training events.
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In Vietnam, suspicious activity reporting training was delivered to compliance and executive
staff of all 84 licensed banks, AML examination training was delivered to the State Bank of
Vietnam, and mentoring was delivered to FIU staff. Development of internal financial
investigation training curricula commenced with OTA assistance at the Ministry of Public
Securitys Police Academy, as well as at the State Customs Academy. In Cambodia, OTA is
assisting with development of an electronic reporting system for suspicious activity and large
cash transaction reports. In Laos, OTA conducted a legislative assessment with the Laotian
Anti-Money Laundering Intelligence Unit (AMLIU). OTA assisted Laos in preparing for its
APG mutual evaluation, funding translation of the mutual evaluation questionnaire and other key
documents, and delivering preparatory training for completion of the questionnaire in
conjunction with APG and UNODC.
In Georgia, OTA conducted a FIT course for law enforcement investigators and prosecutors.
Due to the high level of interest, OTA delivered three separate FIT courses and two separate
Advanced Money Laundering Analysis courses to Kosovos enforcement and regulatory
agencies. Technical assistance was provided to the Kosovo Tax Administration in drafting the
criminal tax amendment and OTA is also assisting in drafting the new criminal tax procedures
manual.
In the Americas during 2010, OTA delivered technical assistance in Argentina, Costa Rica, El
Salvador, Guatemala, Haiti, Honduras, Mexico, Paraguay, and Uruguay. In Argentina, OTA
delivered a workshop focused on money laundering through the Securities Sector to staff of the
National Banking and Securities Commission, Argentine prosecutors, financial crimes
investigators and FIU staff members plus Uruguayan officials. In Uruguay, OTA led a workshop
focused on the Enterprise Theory of Investigation for Organized Crime; there were participants
from Paraguay. OTA also continued to work closely with the Mexican tax authority and the
Mexican banking securities supervisor to assist their efforts to develop a regulatory and
supervisory regime for money service businesses. In Haiti, OTA continued its program to assist
the Government of Haiti draft reforms for its outdated Criminal and Criminal Procedural and Tax
Codes, as well provide continued training and mentoring for analysts at its financial intelligence
unit and analysts, investigators and prosecutors in a companion financial crimes investigative
task force unit. Finally, OTA continued its work in the IT area, assisting the Haiti FIU in its
efforts to obtain appropriate IT systems to receive reports from obligated entities.
OTA continued to offer train-the-trainer courses throughout its programs so that the basic skills
taught in investigative courses can be passed on by the recipients to their agency colleagues.
Financial Analysis Techniques Training
Globally, OTA delivered the Financial Analysis Training Course (FATC) to analysts in the
financial intelligence units of Georgia, Jordan, Kosovo, Mexico, Pakistan, Singapore, Uruguay,
and Vietnam. Regional training co-sponsored with the IMF in Singapore included participants
from Cambodia, Indonesia, Laos, Malaysia, Nepal, Pakistan, Thailand, and Vietnam.
Looking forward, and in response to a demand for advanced training, OTA continued
development of its Advanced FATC, adding modules on: corruption; international cooperation;
the black market peso exchange system; advanced transactional analysis and targeting. In
anticipation of using these and other FATC modules in Central America, the foregoing materials
have been translated into Spanish. OTA is working on translating these same materials into
French for use in francophone Africa. This course was presented to analysts from Jordan,
Kosovo, Palestine and Vietnam.
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Casinos and Gaming

In 2010 the Casino Gaming Group (CGG) experts from OTAs Economic Crimes program
provided technical assistance to the international community in the area of gaming industry
regulation. The CGG provides assistance in the drafting of gaming legislation and implementing
regulations, and trains gaming regulators and FIU personnel to develop the capacity for
implementing AML programs, conduct pre-licensing investigations, and audit and inspect casino
operations and all games of chance.
In 2010 the CGG followed up on assistance provided in 2009 to both Costa Rica and Guatemala
in the creation of draft gaming laws. In both countries the draft laws are before the National
Assemblies and, in 2010, CGG advisors worked with both governments and legislators resolving
issues and answering questions. It is anticipated that both laws will be enacted in 2011. In the
current form both laws would meet international standards. Additionally, meetings have been
held with regulators in Argentina, Ecuador and Mexico to work toward enhancing gaming
regulations.
The draft Kosovo Law on Games of Chance was submitted to the Minister, Ministry of Economy
and Finance in February 2010. The CGG worked extensively with the Ministry in the creation of
this law. Following subsequent submission and review of alternative proposals, a meeting
between OTA and Kosovar authorities is scheduled for January 2011 to finalize the law for
presentation to the Minister.
CGG conducted assessments of the casino regulatory systems and gaming laws in Armenia and
Georgia.
Insurance
In 2010 OTA in conjunction with the New York Insurance Commission provided separate week
long insurance fraud training courses to insurance regulators in Egypt and Jordan. This followed
assistance to the Egypt Insurance Supervisory Authority (EISA) in planning and conducting its
first insurance AML/CFT examination.
Treaties and Agreements

Treaties
Mutual Legal Assistance Treaties (MLATs) allow generally for the exchange of evidence and
information in criminal and related matters. In money laundering cases, they can be extremely
useful as a means of obtaining banking and other financial records from our treaty partners.
MLATs, which are negotiated by the Department of State in cooperation with the Department of
Justice to facilitate cooperation in criminal matters, are in force with the following countries:
Antigua & Barbuda, Argentina, Australia, Austria, the Bahamas, Barbados, Belgium, Belize,
Brazil, Canada, Cyprus, Czech Republic, Dominica, Egypt, Estonia, France, Germany, Greece,
Grenada, Hong Kong, Hungary, India, Ireland, Israel, Italy, Jamaica, Japan, Latvia,
Liechtenstein, Lithuania, Luxembourg, Malaysia, Mexico, Morocco, the Kingdom of the
Netherlands (including Aruba, Curacao, and St. Maarten), Nigeria, Panama, Philippines, Poland,
Romania, Russia, St. Lucia, St. Kitts & Nevis, St. Vincent & the Grenadines, South Africa,
South Korea, Spain, Sweden, Switzerland, Thailand, Trinidad & Tobago, Turkey, Ukraine,
United Kingdom (including the Isle of Man, Cayman Islands, Anguilla, British Virgin Islands,
and Montserrat), Uruguay, and Venezuela. In addition, on February 1, 2010, 27 U.S.-EU
Instruments/Agreements/Protocols entered into force that either supplemented existing MLATs
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or created new mutual legal assistance relationships between the United States and every
member of the EU. Mutual legal assistance agreements have been signed by the United States
but not yet brought into force with the following countries: Algeria, Bermuda, and Colombia.
The United States is engaged in negotiating additional MLATs with countries around the world.
The United States also has signed and ratified the Inter-American Convention on Mutual Legal
Assistance of the Organization of American States, the United Nations Convention against
Corruption, the United Nations Convention Against Transnational Organized Crime, the
International Convention for the Suppression of the Financing of Terrorism and the 1988 UN
Drug Convention.
Agreements
In addition to MLATs, the United States has entered into executive agreements on forfeiture
cooperation, including: (1) an agreement with the United Kingdom providing for forfeiture
assistance and asset sharing in narcotics cases; (2) a forfeiture cooperation and asset sharing
agreement with the Kingdom of the Netherlands; and (3) a drug forfeiture agreement with
Singapore. The United States has asset sharing agreements with Canada, the Cayman Islands
(which was extended to Anguilla, British Virgin Islands, Montserrat, and the Turks and Caicos
Islands), Colombia, Ecuador, Jamaica, Mexico, and Monaco.
Treasurys Financial Crimes Enforcement Network (FinCEN) has a Memorandum of
Understanding (MOU) or an exchange of letters in place with other financial intelligence units
(FIUs) to facilitate the exchange of information between FinCEN and the respective countrys
FIU. FinCEN has an MOU or an exchange of letters with the FIUs in Albania, Argentina,
Aruba, Australia, Belgium, Bermuda, Bulgaria, Canada, Cayman Islands, Chile, Columbia,
Croatia, Cyprus, France, Guatemala, India, Indonesia, Italy, Japan, Macedonia, Malaysia,
Mexico, Montenegro, Moldova, the Netherlands, Netherlands Antilles, Panama, Paraguay, Peru,
Philippines, Poland, Romania, Russia, Serbia, Singapore, Slovenia, South Africa, South Korea,
Spain, the Money Laundering Prevention Commission of Taiwan and the United Kingdom.
Asset Sharing
Pursuant to the provisions of U.S. law, including 18 U.S.C. 981(i), 21 U.S.C. 881(e)(1)(E),
and 31 U.S.C. 9703(h)(2), the Departments of Justice, State, and Treasury have aggressively
sought to encourage foreign governments to cooperate in joint investigations of narcotics
trafficking and money laundering, offering the possibility of sharing in forfeited assets. A
parallel goal has been to encourage spending of these assets to improve narcotics-related law
enforcement. The long term goal has been to encourage governments to improve asset forfeiture
laws and procedures so they will be able to conduct investigations and prosecutions of narcotics
trafficking and money laundering that include asset forfeiture. To date, the Bahamas, Canada,
Cayman Islands, Hong Kong, Jersey, Liechtenstein, Luxembourg, Singapore, Switzerland, and
the United Kingdom have shared forfeited assets with the United States.
From 1989 through October 2010, the international asset sharing program, administered by the
Department of Justice, shared $233,042,355 with 36 foreign governments that cooperated and
assisted in investigations. In 2010, the Department of Justice agreed to transfer $2,946,237 in
forfeited proceeds to the Government of United Mexican States. Prior recipients of shared assets
include: Anguilla, Antigua and Barbuda, Argentina, the Bahamas, Barbados, British Virgin
Islands, Canada, Cayman Islands, Colombia, Costa Rica, Dominican Republic, Ecuador, Egypt,
Germany, Greece, Guatemala, Guernsey, Honduras, Hong Kong, Hungary, Indonesia, Isle of
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Man, Israel, Jordan, Liechtenstein, Luxembourg, Netherlands Antilles, Paraguay, Peru, Romania,
South Africa, Switzerland, Thailand, Turkey, the United Kingdom, and Venezuela.
From Fiscal Year (FY) 1994 through FY 2010, the international asset-sharing program
administered by the Department of Treasury shared $30,321,113 with foreign governments that
cooperated and assisted in successful forfeiture investigations. In FY 2009, the Department of
Treasury transferred $1,500.235 in forfeited proceeds to Vietnam ($12,882), Japan ($381,608),
Brazil ($1,038,976), Malta ($50,000) and Canada ($16,768.46). Prior recipients of shared assets
include: Aruba, Australia, the Bahamas, Cayman Islands, Canada, China, Dominican Republic,
Egypt, Guernsey, Honduras, Isle of Man, Jersey, Mexico, Netherlands, Nicaragua, Panama,
Portugal, Qatar, St. Vincent & the Grenadines, Switzerland, and the United Kingdom.
Multi-Lateral Organizations & Programs

The Financial Action Task Force (FATF) and FATF-Style
Regional Bodies (FSRBs)
The Financial Action Task Force (FATF)
The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the
development and promotion of national and international policies to combat money laundering
and terrorist financing. The FATF was created in 1989 and works to generate legislative and
regulatory reforms in these areas. The FATF currently has 36 members, comprising 34 member
countries and territories and two regional organizations, as follows: Argentina, Australia,
Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong,
Iceland, India, Ireland, Italy, Japan, Luxembourg, Mexico, The Netherlands, New Zealand,
Norway, Peoples Republic of China, Portugal, Republic of Korea, Russian Federation,
Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, United Kingdom, the United
States, the European Commission and the Gulf Cooperation Council. FATF admitted India in
June 2010.
There are also a number of FATF-style regional bodies that, in conjunction with the FATF,
constitute an affiliated global network to combat money laundering and the financing of
terrorism.
The Asia/Pacific Group on Money Laundering (APG)
The Asia/Pacific Group on Money Laundering (APG) was officially established in February
1997 at the Fourth (and last) Asia/Pacific Money Laundering Symposium in Bangkok as an
autonomous regional anti-money laundering body. The 40 APG members are as follows:
Afghanistan, Australia, Bangladesh, Brunei Darussalam, Burma, Cambodia, Canada, Chinese
Taipei, Cook Islands, Fiji, Hong Kong, India, Indonesia, Japan, Laos, Macau, Malaysia,
Maldives, Marshall Islands, Mongolia, Nauru, Nepal, New Zealand, Niue, Pakistan, Palau, Papua
New Guinea, Philippines, Peoples Republic of China, Samoa, Singapore, Solomon Islands,
South Korea, Sri Lanka, Thailand, Timor Leste, Tonga, United States, Vanuatu, and Vietnam.
The Caribbean Financial Action Task Force (CFATF)
The Caribbean Financial Action Task Force (CFATF) was established in 1992. CFATF has 29
members: Anguilla, Antigua & Barbuda, Aruba, The Bahamas, Barbados, Belize, Bermuda,
British Virgin Islands, Cayman Islands, Curacao, Dominica, Dominican Republic, El Salvador,
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Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Montserrat, Nicaragua, St. Kitts &
Nevis, St. Lucia, St. Maarten, St. Vincent & the Grenadines, Suriname, Trinidad & Tobago,
Turks & Caicos Islands, and Venezuela. In 2010, Costa Rica and Panama left the group, and, in
November 2010, Curacao and St. Maarten become individual members after the dissolution of
the Netherlands Antilles.
The Committee of Experts on the Evaluation of Anti-Money Laundering
Measures and the Financing of Terrorism (MONEYVAL)
The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the
Financing of Terrorism (MONEYVAL) was established in 1997 under the acronym PC-R-EV.
MONEYVAL is comprised of 28 permanent members; two temporary, rotating members; and
one active observer. The permanent members are Albania, Andorra, Armenia, Azerbaijan,
Bosnia and Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Estonia, Georgia, Hungary,
Latvia, Liechtenstein, Lithuania, Malta, Moldova, Monaco, Montenegro, Poland, Romania,
Russian Federation, San Marino, Serbia, Slovakia, Slovenia, the Former Yugoslav Republic of
Macedonia, and Ukraine. The active observer is Israel. Temporary members, designated by the
FATF for a two-year membership, are currently Austria and the United Kingdom.
The Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG)
The Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) was established
in 1999. Fourteen countries comprise its membership: Botswana, Kenya, Lesotho, Malawi,
Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Uganda,
Zambia, and Zimbabwe.
The Eurasian Group on Combating Money Laundering and Financing of
Terrorism (EAG)
The Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG) was
established in 2004, and has nine members: Belarus, India, Kazakhstan, Kyrgyzstan, Peoples
Republic of China, Russian Federation, Tajikistan, Turkmenistan and Uzbekistan. India and
Turkmenistan became the newest members of the group in 2010.
The Financial Action Task Force on Money Laundering in South America
(GAFISUD)
The Financial Action Task Force on Money Laundering in South America (GAFISUD) was
formally established in 2000 by the ten original member states of Argentina, Bolivia, Brazil,
Chile, Colombia, Ecuador, Mexico, Paraguay, Peru and Uruguay. Costa Rica and Panama joined
the group in 2010, bringing total membership to 12.
Inter-Governmental Action Group against Money Laundering in West Africa
(GIABA)
The Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) was
formally established in 1999. GIABA consists of 15 countries: Benin, Burkina Faso, Cape
Verde, Cte dIvoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria,
Senegal, Sierra Leone, and Togo.
The Middle East and North Africa Financial Action Task Force (MENAFATF)
The Middle East and North Africa Financial Action Task Force (MENAFATF) was formally
established in 2004. MENAFATF has 18 members: Algeria, Bahrain, Egypt, Iraq, Jordan,
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Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Qatar, Saudi Arabia, Sudan, Syria,
Tunisia, United Arab Emirates, and Yemen.
The Organization of American States Inter-American Drug

Abuse Control Commission (OAS/CICAD) Group of Experts
to Control Money Laundering
The Organization of American States, through its Inter-American Drug Abuse Control
Commission (OAS/CICAD), is responsible for combating illicit drugs and related crimes,
including money laundering. In 2010, CICAD continued to carry out its activities in anti-money
laundering and combating the financing of terrorism (AML/CFT) throughout Latin America and
the Caribbean. CICADs AML/CFT training programs seek to improve and enhance the
knowledge and capabilities of judges, prosecutors, public defenders, law enforcement agents,
and financial intelligence unit (FIU) analysts. The U.S. Department of State Bureau of
International Narcotics and Law Enforcement Affairs (INL) provided full or partial funding for
many of the CICAD training programs in 2010.
Expert Group
The expert group, which met twice in 2010, has two working groups: one dealing with seizure
and forfeiture of assets and their management, coordinated by Costa Rica, and another that deals
with coordination and integration of law enforcement agencies and financial intelligence units
(FIUs), coordinated by Chile. The two groups deliberated and met in plenary to deal with
building consensus on proposals to put before the full CICAD Commission. Discussion also
focused on streamlining working group methodology and strategic planning. The expert group
designated Uruguay as its representative in a regional initiative to draft model legislation on
seized and forfeited assets for the region, sponsored by the United Nations Office on Drugs and
Crime (UNODC)-Colombia.
Seized and Forfeited Assets
After completing the projects two-year pilot phase in Argentina, Chile and Uruguay in
December 2009, the Seized and Forfeited Assets Management Program of Latin America
(BIDAL, from the Spanish acronym) project shifted to a different regional focus, working with
the governments of the Dominican Republic, El Salvador, Guatemala, and Panama to implement
asset recovery management programs. As an initial step for each of these four countries, the
project carried out an assessment of existing legislation on asset investigation and seized and
forfeited asset administration systems before determining the work plan for each country. The
CICAD Executive Secretariat worked to help member states implement the guidelines and
recommendations that have emerged from the BIDAL project and the Expert Group, on topics
such as the recovery of stolen assets, asset tracing, capital asset investigations, mutual legal
assistance (MLA), and asset management. The CICAD Executive Secretariat has also drawn on
the asset management expertise of the US Marshalls, the National Narcotics Directorate of
Colombian and the Costa Rican Institute on Drugs.
Capacity Building
The Anti-Money Laundering Section organized a total of 17 seminars and workshops in 14
countries in 2010, training nearly 700 judges, prosecutors, law enforcement officers, financial
intelligent unit analysts and forfeited assets administration officers, among other participants. It
partnered with the UNODC, the Stolen Assets Recovery (StAR) Initiative of the World Bank, the
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World Bank Institute, the Ministry of Interior of the Government of Spain and INL of the
Department of State, as well as the OASs Inter-American Committee Against Terrorism
(CICTE) and the governments of CICAD member states.
CICAD also coordinated with the UNODC Legal Assistance Program for Latin America and the
Caribbean (LAPLAC/UNODC), INTERPOL, and the South American Financial Action Task
Force (GAFISUD) in setting up the Asset Recovery Network of GAFISUD (RRAG per its
Spanish abbreviation) as a vehicle for exchanging information about the identification and
recovery of assets, products or instruments of transnational illicit activities. This initiative is
based on the guidelines of the CARIN Network (CAMDEN Assets Recovery Inter-Agency
Network in Europe).
The Anti-Money Laundering section continued with its project backed by LAPLAC/UNODC,
the Government of Spain and INL to train judges, prosecutors, police investigators, and financial
analysts through mock trials and investigations of money laundering cases. Costa Rica,
Dominican Republic, El Salvador, Guatemala, Nicaragua and Panama benefited from the
program in 2010.
Joint efforts with the OAS CICTE and UNODC (Vienna), funded by INL, among others, led to
two regional workshops in 2010 on the financing of terrorism for legislators, prosecutors, police
and financial analysts in Costa Rica (six countries) and The Bahamas (13 countries). CICAD
joined follow-up missions with CICTE and UNODC to Bolivia, Costa Rica, Ecuador and
Paraguay to discuss implementation of legislation and adjustments in law enforcement.
The Narcotics Affairs Section of the U.S. Embassy in Lima underwrote a comprehensive
program to train Peruvian judges, prosecutors, public defenders, law enforcement officers and
financial analysts in the techniques and tools for dealing with money laundering and the
financing of terrorism. Workshops were held on special investigation techniques, incriminating
evidence, and the analysis of financial links and relationships. The Section is also working to
develop a methodological plan of investigation for prosecutors and investigators, as well as
holding mock investigations and mock trials to give participants hands-on experience. In
December, the Superintendence of Banks and Insurance of Peru signed an agreement with the
CICAD Executive Secretariat to establish a training center specialized in the control of money
laundering and the financing of terrorism.
Pacific Anti-Money Laundering Program (PALP)

The Pacific Anti-Money Laundering Program (PALP), which commenced in September 2006, is
a joint initiative between the UN Office on Drugs and Crime (UNODC) and the U.S. Department
of State. The PALP was conceived by and is funded by the U.S. Department of States Bureau
for International Narcotics and Law Enforcement Affairs. The PALP is a regional technical
assistance and training program designed to assist the 14 members of the Pacific Islands Forum
that are not also members of the Financial Action Task Force (FATF) in establishing,
implementing and strengthening their anti-money laundering and combating the financing of
terrorism (AML/CFT) regimes. The 14 members of the Pacific Islands Forum that receive PALP
assistance are the Cook Islands, the Federated States of Micronesia, Fiji, Kiribati, the Marshall
Islands, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and
Vanuatu. The PALP is coordinated and managed by the United Nations Office on Drugs and
Crime, Global Programme against Money Laundering, Proceeds of Crime and the Financing of
Terrorism (GPML).
29
The PALP uses resident in-country mentors and intermittent mentors who visit participating
jurisdictions to provide tailor-made advice and assistance on establishing viable AML/CFT
regimes, including assistance with legal, law enforcement, regulatory, and financial intelligence
unit (FIU) development. PALPs strength lies in the extensive knowledge and years of
operational experience of each of the mentors. This wealth of experience means that the PALP
mentors are ideally positioned to give participating countries sound advice based upon expert
knowledge and practical know-how.
In 2010, the PALP continued to provide assistance on a wide range of AML/CFT issues,
including legislative drafting, capacity building, and very importantly, case support. During
2010 a number of jurisdictions passed or amended their AML/CFT legislations and/or
regulations. National trainings were also conducted for FIU staff, prosecutors, customs officers
and law enforcement officials.
The PALP works in close cooperation with the Asia/Pacific Group against Money Laundering
(APG) in order to coordinate delivery of technical assistance and training to jurisdictions that are
both APG members and PALP participants. The PALP law enforcement mentor made
presentations during the regional training in Kuala Lumpur on Strategic Implementation
Planning. This training was supported by APG, Malaysia and Canada, and was provided to 25
FIU personnel, prosecutors, and investigators.
Case Support
Strong case support was provided in Palau. Assistance was provided by three GPML mentors to
the Assistant Attorney General, the Attorney General and the Independent Counsel in relation to
and at different stages of ongoing investigations surrounding the collapse of a major bank in
Palau. Case support also took place in other jurisdictions. Mentoring investigators and
prosecutors is an effective way to ensure that the new knowledge and skills gained through
attendance at formal training events is put into operation. Coaching by the PALP mentors builds
confidence within officials who are charged with undertaking money laundering investigations
and prosecutions.
PALP will continue to provide an on-site and intermittent support to a number of Pacific
countries with a focus on Cook Islands; the Republic of Marshal Islands; Samoa; the Kingdom of
Tonga; and Vanuatu. The Program will continue to deliver its technical assistance and training
efforts on AML/CFT through the work of its FIU mentor, regulatory mentor and legal mentor.
Many countries now have legislation in place and have officers trained in basic identification and
investigation of AML/CFT related crimes. PALP will focus its work on assisting responsible
agencies to undertake successful investigations and prosecutions and to confiscate criminal
assets as well as development of AML/CFT supervision programs. The Program is expected to
conclude in the third quarter of 2011.
United Nations Global Programme against Money

Laundering, Proceeds of Crime, and the Financing of
Terrorism (GPML)
The United Nations is one of the most experienced global providers of anti-money laundering
(AML) training and technical assistance and, since 9-11, countering financing of terrorism (CFT)
training and technical assistance. The United Nations Global Programme against Money
Laundering, Proceeds of Crime and the Financing of Terrorism (GPML), part of the United
Nations Office on Drugs and Crime (UNODC), was established to assist member states to
30
comply with the UN Conventions and other instruments that deal with money-laundering and
terrorist financing. These now include the United Nations Convention against Traffic in
Narcotic Drugs and Psychotropic Substances (the 1988 Vienna Convention), the United Nations
International Convention for the Suppression of the Financing of Terrorism (the 1999
Convention), the United Nations Convention against Transnational Organized Crime (the 2000
Palermo Convention), and the United Nations Convention against Corruption (the 2003 Merida
Convention).
In March 2008, GPMLs scope and objectives were widened to meet the growing needs and
demands of the international community for tailor-made assistance in the effective
implementation of these UN instruments and other international anti-money
laundering/countering the financing of terrorism (AML/CFT) standards, and to use AML/CFT
systems as effective tools to achieve better financial transparency, integrity and good
governance, thereby increasing investment prospects. GPML elaborated an ambitious program
to make international action against the proceeds of crime and illegal financial flows more
effective. This is done through a wide range of technical assistance measures and in close
partnership with regional or multilateral organizations.
GPML is the focal point for AML policy and activities within the UN system and a key player in
strengthening efforts to counter terrorist financing. GPML provides technical assistance and
training in the development of related legislation, infrastructure and skills, directly assisting
member states in the detection, seizure, and confiscation of illicit proceeds. Since 2001,
GPMLs technical assistance work on CFT has also received priority. GPML now incorporates a
focus on CFT in all its technical assistance work, in particular its financial investigations and
financial analysis training tools.
In 2010, GPML provided long-term assistance in the development of viable AML/CFT regimes
in six regions, to 44 countries. GPML also delivered 26 training events worldwide, in
partnership with other agencies and organizations where possible; and trained 1,250
representatives of law enforcement agencies, financial intelligence units (FIUs), judicial
authorities and reporting entities.
An independent evaluation of GPML was conducted throughout the second half of 2010. The
evaluators concluded that GPML has been successful in influencing the adoption of national
legislation and the establishment of law enforcement institutions and procedures through its
mentoring, training and information support systems.
The Mentoring Program
GPMLs mentoring program is one of the most successful and well-known activities of
international AML/CFT technical assistance and training, and is increasingly serving as a model
for other organizations initiatives. It is one of the core activities of the GPML technical
assistance program and is highly regarded by the AML/CFT community. The GPML Mentoring
Program provides targeted on-the-job training that adapts international standards to specific
local/national situations, rather than the traditional training seminar. GPML provides
experienced prosecutors and law enforcement personnel who work side-by-side with their
counterparts in a target country for several months at a time on daily operational matters to help
develop capacity. By giving in-depth support upon request, the mentors have gained the
confidence of the recipient institutions, which enables the achievement of concrete and
significant outputs. In many countries, GPML mentors are the only locally placed AML/CFT
experts, hence they are heavily relied upon by local offices of donor countries and organizations
for advice in the creation and delivery of other donor AML/CFT projects.
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The GPML Asset Forfeiture Mentor based in the Prosecutor Generals Office of Namibia
provides assistance for the development and strengthening of asset forfeiture mechanisms in
Southern Africa. The mentor continued to monitor the Prosecutor Placement Program, an
initiative aimed at placing prosecutors from the region for a certain period of time within the
Asset Forfeiture Unit of the National Prosecuting Authority (NPA) in South Africa. In 2010,
two Namibian prosecutors were successfully placed, impacting positively on the management of
large corruption cases in Namibia. In Botswana, a multi-agency agreement on new confiscation
legislation has been reached and in Zimbabwe, with mentors assistance, agreement was reached
to establish a specialized asset forfeiture unit within the office of the Director of Public
Prosecution.
In West Africa, GPMLs main achievements in 2010 include the strengthening of the FIU
operational capacities in Cte d'Ivoire, Guinea Bissau, Mali, Senegal and Sierra Leone, through
the delivery of both training and equipment; and outreach to reporting entities in Cte d'Ivoire
and Mali. Activities were completed in coordination with the Inter-Governmental Action Group
against Money Laundering in West Africa (GIABA).
The World Bank/GPML mentor based in Hanoi continued to strengthen operational capacities in
Vietnam, Laos, and Cambodia. In Laos, the mentor took part in the drafting of the memorandum
of understanding (MOU) for exchange of intelligence between the FIU and other authorities.
Also, following the delivery of financial investigation courses, the number of corruption cases
being investigated in Vietnam has increased, and case management and witness handling
techniques have been adopted in Cambodia.
In October 2008, GPML assumed the coordination and administration of the Pacific Anti-Money
Laundering Program (PALP), which provides AML/CFT advice, training and technical
assistance to support the establishment, development and implementation of AML/CFT systems
to 14 Pacific Island Forum.
In collaboration with the World Bank, GPML continued providing support to their joint
AML/CFT mentor for Central Asia. In 2010, the main focus of the mentors work was capacity
building related to the FIUs of Kazakhstan, Turkmenistan, Uzbekistan, and Tajikistan as well as
domestic and international interagency cooperation. As a result of this work, the Kazakh FIU
became an observer to the Egmont Group and the Uzbek FIU is also considering becoming an
observer to the Egmont Group in 2011. In January 2010, Tajikistan established a FIU and with
the mentor's assistance adopted its organizational structure and prepared a new draft AML/CFT
law.
In Central America and the Caribbean, GPML contributed in 2010 to the Public-Private
Partnership against Money Laundering. This innovative program, which is being piloted in
Colombia, aims to integrate AML/CFT measures into business management. The alliance
includes more than 20 members from the public (justice and regulators) and private (financial
and commerce) sectors.
Mentoring & Financial Intelligence Units
GPML mentors worked extensively on the development and the implementation phases of FIUs
in several countries in the Eastern Caribbean; Western, Southern and Eastern Africa; the Pacific;
Central Asia; and the Mekong region. A major initiative that could have global implications for
many FIUs is the development by the UNODC Information Technology Service, with
substantive inputs from GPML, of an analytical and integrated database and intelligence analysis
system for operational deployment in FIUs, called goAML (http://goaml.unodc.org). It is an IT
32
solution for FIUs to manage their activities, particularly data collection, analysis, and
dissemination. Version one of goAML is fully developed and is being installed in Namibia,
Kosovo, Palestine, Nigeria, Tanzania, Bermuda, Denmark, Netherlands, Morocco and South
Africa.
Financial Intelligence Unit Analyst Course
GPML Financial Intelligence Unit Analyst Course is an opportunity for FIU analysts to develop
knowledge and skills in the analysis process and the development of financial intelligence. The
course focuses on analysis of suspicious transactions related to possible money laundering and
terrorist financing; and addresses relationships between the FIU and agencies responsible for
investigation of money laundering and terrorist financing. In 2010, the training was delivered in
the Maghreb region with the following participating countries: Mauritania, Morocco, Tunisia and
Algeria.
Other GPML Initiatives
Mock Trials: The AML/CFT Mock Trial Program is a key training activity, designed to support
and enhance judiciary capacities in dealing with complex financial crime cases. Its long-term
objective is also to develop a methodology and a prototype of mock trials that could be used in
other developing countries. In2010, GPML replicated the Latin American training in
Kazakhstan and Cambodia.
Financial Investigation Course: GPML also developed a Financial Investigation Course that
aims to provide an opportunity for investigators to develop their knowledge and skills in
financial investigation and to raise awareness of terrorist financing and money laundering
methods. This course has a practical focus and is designed upon legal and procedural processes
in the country of training. It gives participants the opportunity to learn the legislative aspects of
financial crime, understand their powers, conduct searches and undertake interviews. The
training was delivered in Vietnam, Cambodia, and Tanzania in 2010.
Illicit Financial Flows: As part of the UNODC Rainbow Strategy, which aims to reduce the
supply, trafficking and consumption of opiates in Afghanistan and neighboring countries, GPML
took the lead since January 2008 in a new initiative on Financial flows to and from Afghanistan
linked to the illicit drug production and trafficking. In 2010, GPML developed a questionnaire
to assess the proportion of money flows to/from Afghanistan and determine the destination and
transit countries involved in the financial flows derived from Afghan opiates production and
trafficking.
GPML is also working on a study on the illicit financial flows linked to cocaine production and
trafficking in West Africa, with a view to determining their possible destabilizing effect on
regional economies.
StAR: In September 2007, UNODC and the World Bank launched the Stolen Asset Recovery
(StAR) Initiative aimed at assisting developing countries to recover stolen assets that have been
sent abroad by corrupt leaders. Given the close links between money laundering and corruption,
and the fact that building an AML system forms an integral part of good governance policy and
asset recovery strategy, GPML participated in the development of several knowledge products
including the Study on Barriers to Return of Stolen Assets and the Handbook on Asset Recovery
which were both finalized in 2010.
Manual on Financial Instruments: The Manual for users and Employees of Financial
Institutions on the Risks of Money laundering through Financial Instruments was developed in
33
2009 jointly with the UNODC Legal Advisory Programme for Latin America and the Caribbean
(LAPLAC). The English version of the Manual was launched at the 18th EGMONT Plenary
2010, the CFATF XXXI Plenary, and at the International Conference on Financial Crime and
Terrorism Financing 2010. Training modules based on the Manual and addressed to judges and
prosecutors, were held within the StAR initiative in Colombia and Argentina and the Mock
Trials on Money Laundering Program held in Bolivia. The manual is available in Spanish and
English versions; Russian and French versions are being developed.
IMoLIN/AMLID: AMOLIN is a one-stop AML/CFT research resource, which is administered
and managed by GPML on behalf of eleven partner organizations. Within IMoLIN is the Anti-
Money Laundering International Database (AMLID), a unique password-protected service
cataloguing AML/CFT laws on a global basis in an easily searchable format. The database has a
collection (and analysis) of legislation from 102 jurisdictions. AMLID also provides an
overview of the status of a country or territory in relation to the international conventions
applicable to AML/CFT as well as the status of a country or territory in relation to
bilateral/multilateral treaties or agreements on mutual legal assistance in criminal matters and
extradition.
Cash Couriers: In November 2010, GPML conducted an expert working group on cash
couriers with participants from Interpol, OSCE, WCO as well as representatives of FIUs,
customs and other government agencies from 12 jurisdictions. The meeting focused on the
development of a training program to be employed in the course of technical assistance to
countries which have basic legislative structures in place to deal with the cross-border movement
of cash, but lack the structural awareness and experience to effectively intercept cash couriers.
Development of AML/CFT Experts/Trainers: GPML commenced its project to imbed
AML/CFT curricula into police and prosecution training institutions. This initiative involves
design and development of AML/CFT training modules and the development of national
AML/CFT subject matter experts, through a series of trainthe-trainer and technical workshops.
The final workshop involves national trainers delivering the course. Bangladesh is the pilot
country for this project.
Computer Based Training: The Computer Based Training (CBT) includes high-quality voice,
pictures, graphics, interactive video and animation, simulation and student tests. The AML CBT
training is currently available in ten languages: Spanish, French, Russian, Arabic, Chinese
(Mandarin), Amharic, Bahasa, Thai, English, and Vietnamese. In 2010, GPML, in partnership
with the British High Commission, funded the establishment of a new CBT centre in Fiji.
Major Money Laundering Countries

Every year, U.S. officials from agencies with anti-money laundering responsibilities meet to
assess the money laundering situations in 200 jurisdictions. The review includes an assessment
of the significance of financial transactions in the countrys financial institutions involving
proceeds of serious crime, steps taken or not taken to address financial crime and money
laundering, each jurisdictions vulnerability to money laundering, the conformance of its laws
and policies to international standards, the effectiveness with which the government has acted,
and the governments political will to take needed actions.
The 2011 INCSR identifies money laundering priority jurisdictions and countries using a
classification system that consists of three different categories: Jurisdictions of Primary Concern,
Jurisdictions of Concern, and Other Jurisdictions Monitored.
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Jurisdictions of Primary Concern are those that are identified, pursuant to INCSR reporting
requirements, as major money laundering countries. A major money laundering country is
defined by statute as one whose financial institutions engage in currency transactions involving
significant amounts of proceeds from international narcotics trafficking. However, the complex
nature of money laundering transactions today makes it difficult in many cases to distinguish the
proceeds of narcotics trafficking from the proceeds of other serious crime. Moreover, financial
institutions engaged in transactions that involve significant amounts of proceeds from other
serious crimes are vulnerable to narcotics-related money laundering. The category Jurisdiction
of Primary Concern recognizes this relationship by including all countries and other
jurisdictions whose financial institutions engage in transactions involving significant amounts of
proceeds from all serious crimes. Thus, the focus in considering whether a country or
jurisdiction should be included in this category is on the significance of the amount of proceeds
laundered, not of the anti-money laundering measures taken. This is a different approach taken
than that of the Financial Action Task Forces International Cooperation Review Group (ICRG)
exercise, which focuses on a jurisdictions compliance with stated criteria regarding its legal and
regulatory framework, international cooperation, and resource allocations. A government (e.g.,
the United States or the United Kingdom) can have comprehensive anti-money laundering laws
on its books and conduct aggressive anti-money laundering enforcement efforts but still be
classified a Primary Concern jurisdiction. In some cases, this classification may simply or
largely be a function of the size of the jurisdictions economy. In such jurisdictions, quick,
continuous and effective anti-money laundering efforts by the government are critical.
All other countries and jurisdictions evaluated in the INCSR are separated into the two remaining
groups, Jurisdictions of Concern and Other Jurisdictions Monitored, on the basis of several
factors that may include: (1) whether the countrys financial institutions engage in transactions
involving significant amounts of proceeds from serious crimes; (2) the extent to which the
jurisdiction is or remains vulnerable to money laundering, notwithstanding its money laundering
countermeasures, if any (an illustrative list of factors that may indicate vulnerability is provided
below); (3) the nature and extent of the money laundering situation in each jurisdiction (e.g.,
whether it involves drugs or other contraband); (4) the ways in which the U.S. Government
(USG) regards the situation as having international ramifications; (5) the situations impact on
U.S. interests; (6) whether the jurisdiction has taken appropriate legislative actions to address
specific problems; (7) whether there is a lack of licensing and oversight of offshore financial
centers and businesses; (8) whether the jurisdictions laws are being effectively implemented;
and (9) where U.S. interests are involved, the degree of cooperation between the foreign
government and the USG. Additionally, given concerns about the increasing interrelationship
between inadequate money laundering legislation and terrorist financing, terrorist financing is an
additional factor considered in making a determination as to whether a country should be
considered a Jurisdiction of Concern or an Other Jurisdiction Monitored. While the actual
money laundering problem in jurisdictions classified as Jurisdictions of Concern is not as acute
as in those considered to be of Primary Concern, they too must undertake efforts to develop or
enhance their anti-money laundering regimes. Finally, while jurisdictions in the Other
Jurisdictions Monitored category do not pose an immediate concern, it is nevertheless important
to monitor their money laundering situations because, under certain circumstances, virtually any
jurisdiction of any size can develop into a significant money laundering center.
Vulnerability Factors
The current ability of money launderers to penetrate virtually any financial system makes every
jurisdiction a potential money laundering center. There is no precise measure of vulnerability for
35
any financial system, and not every vulnerable financial system will, in fact, be host to large
volumes of laundered proceeds. A checklist of what drug money managers reportedly look for,
however, provides a basic guide. The checklist includes:
Failure to criminalize money laundering for all serious crimes or limiting the offense to
narrow predicates.
Rigid bank secrecy rules that obstruct law enforcement investigations or that prohibit or
inhibit large value and/or suspicious or unusual transaction reporting by both banks and
nonbank financial institutions.
Lack of or inadequate know your customer requirements to open accounts or conduct
financial transactions, including the permitted use of anonymous, nominee, numbered or
trustee accounts.
No requirement to disclose the beneficial owner of an account or the true beneficiary of a
transaction.
Lack of effective monitoring of cross-border currency movements.
No reporting requirements for large cash transactions.
No requirement to maintain financial records over a specific period of time.
No mandatory requirement to report suspicious transactions or a pattern of inconsistent
reporting under a voluntary system and a lack of uniform guidelines for identifying
suspicious transactions.
Use of bearer monetary instruments.
Well-established non-bank financial systems, especially where regulation, supervision,
and monitoring are absent or lax.
Patterns of evasion of exchange controls by legitimate businesses.
Ease of incorporation, in particular where ownership can be held through nominees or
bearer shares, or where off-the-shelf corporations can be acquired.
No central reporting unit for receiving, analyzing, and disseminating to the competent
authorities information on large value, suspicious or unusual financial transactions that
might identify possible money laundering activity.
Lack of or weak bank regulatory controls, or failure to adopt or adhere to Basel
Committees Core Principles for Effective Banking Supervision, especially in
jurisdictions where the monetary or bank supervisory authority is understaffed, under-
skilled or uncommitted.
Well-established offshore financial centers or tax-haven banking systems, especially
jurisdictions where such banks and accounts can be readily established with minimal
background investigations.
Extensive foreign banking operations, especially where there is significant wire transfer
activity or multiple branches of foreign banks, or limited audit authority over foreign-
owned banks or institutions.
Jurisdictions where charitable organizations or alternative remittance systems, because of
their unregulated and unsupervised nature, are used as avenues for money laundering or
terrorist financing.
36
Limited asset seizure or confiscation authority.

Limited narcotics, money laundering, and financial crime enforcement, and lack of
trained investigators or regulators.
Jurisdictions with free trade zones where there is little government presence or other
supervisory authority.
Patterns of official corruption or a laissez-faire attitude toward business and banking
communities.
Jurisdictions where the U.S. dollar is readily accepted, especially jurisdictions where
banks and other financial institutions allow dollar deposits.
Well-established access to international bullion trading centers in New York, Istanbul,
Zurich, Dubai, and Mumbai.
Jurisdictions where there is significant trade in or export of gold, diamonds, and other
gems.
Jurisdictions with large parallel or black market economies.
Limited or no ability to share financial information with foreign law enforcement
authorities.
Changes in INCSR Priorities for 2011

Jurisdictions moving from the Jurisdiction of Concern column to the Primary Concern
column:
British Virgin Islands and Iraq
New jurisdiction in Primary Concern column (first time in report):
Somalia
Jurisdictions moving from the Other Jurisdictions Monitored column to the Jurisdiction of
Concern column:
Kazakhstan, Kosovo, and Montenegro
Jurisdiction moving from the Jurisdiction of Concern column to the Other Jurisdictions
Monitored column:
Uzbekistan
New jurisdiction in Other Jurisdictions Monitored column (first time in report):
Sudan
In the Country/Jurisdiction Table on the following page, major money laundering countries
that are in the Jurisdictions of Primary Concern category are identified for purposes of INCSR
statutory reporting requirements. Identification as a major money laundering country is based
on whether the country or jurisdictions financial institutions engage in transactions involving
significant amounts of proceeds from serious crime. It is not based on an assessment of the
country or jurisdictions legal framework to combat money laundering; its role in the terrorist
financing problem; or the degree of its cooperation in the international fight against money
laundering, including terrorist financing. These factors, however, are included among the
vulnerability factors when deciding whether to place a country or jurisdiction in the
Jurisdictions of Concern or Other Jurisdictions Monitored category.
37
Note: Country reports are provided for only those countries and jurisdictions listed in the
Primary Jurisdictions of Concern category.
38
Countries and Jurisdictions Table

Countries/Jurisdictions of Primary Countries/Jurisdictions of Other Countries/Jurisdictions
Concern Concern Monitored
Afghanistan Liechtenstein Albania Moldova Andorra Madagascar
Antigua and Barbuda Luxembourg Algeria Monaco Anguilla Malawi
Australia Macau Angola Montenegro Armenia Maldives
Austria Mexico Argentina Morocco Benin Mali
Bahamas Netherlands Aruba Nicaragua Bermuda Malta
Belize Nigeria Azerbaijan Palau Botswana Marshall Islands
Bolivia Pakistan Bahrain Peru Brunei Mauritania
Brazil Panama Bangladesh Poland Burkina Faso Mauritius
British Virgin Islands Paraguay Barbados Portugal Burundi Micronesia FS
Burma Philippines Belarus Qatar Cameroon Mongolia
Cambodia Russia Belgium Romania Cape Verde Montserrat
Canada Singapore Bosnia and Herzegovina Samoa Central African Republic Mozambique
Cayman Islands Somalia Bulgaria Saudi Arabia Chad Namibia
China, People Rep Spain Chile Senegal Congo, Dem Rep of Nauru
Colombia Switzerland Comoros Serbia Congo, Rep of Nepal
Costa Rica Taiwan Cook Islands Seychelles Croatia New Zealand
Cyprus Thailand Cote dIvoire Sierra Leone Cuba Niger
Dominican Republic Turkey Curacao Slovakia Denmark Niue
France Ukraine Czech Rep South Africa Djibouti Norway
Germany United Arab Emirates Ecuador St. Kitts & Nevis Dominica Oman
Greece United Kingdom Egypt St. Lucia East Timor Papua New Guinea
Guatemala United States El Salvador St. Maarten Equatorial Guinea Rwanda
Guernsey Uruguay Ghana St. Vincent Eritrea San Marino
Guinea-Bissau Venezuela Gibraltar Suriname Estonia Sao Tome & Principe
Haiti Zimbabwe Grenada Syria Ethiopia Slovenia
Hong Kong Guyana Tanzania Fiji Solomon Islands
India Honduras Trinidad and Tobago Finland Sri Lanka
Indonesia Hungary Turks and Caicos Gabon Sudan
Iran Ireland Vanuatu Gambia Swaziland
Iraq Jamaica Vietnam Georgia Sweden
Isle of Man Jordan Yemen Guinea Tajikistan
Israel Kazakhstan Iceland Togo
Italy Korea, North Kyrgyz Republic Tonga
Japan Korea, South Lesotho Tunisia
Jersey Kosovo Liberia Turkmenistan
Kenya Kuwait Libya Uganda
Latvia Laos Lithuania Uzbekistan
Lebanon Malaysia Macedonia Zambia
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Introduction to Comparative Table

The comparative table that follows the Glossary of Terms below identifies the broad range of
actions, effective as of December 31, 2010, that jurisdictions have, or have not, taken to combat
money laundering. This reference table provides a comparison of elements that includes
legislative activity and other identifying characteristics that can have a relationship to a
jurisdictions money laundering vulnerability.
Glossary of Terms
1. Criminalized Drug Money Laundering: The jurisdiction has enacted laws
criminalizing the offense of money laundering related to the drug trade.
2. Criminalized Beyond Drugs: The jurisdiction has enacted laws criminalizing the
offense of money laundering related to crimes other than the drug trade.
3. Know Your Customer Provisions: By law or regulation, the government requires
banks and/or other covered entities to adopt and implement Know Your
Customer/Customer Due Diligence programs for their customers or clientele.
4. Report Large Transactions: By law or regulation, banks and/or other covered entities
are required to report large transactions in currency or other monetary instruments to
designated authorities.
5. Report Suspicious Transactions: By law or regulation, banks and/or other covered
entities are required to report suspicious or unusual transactions to designated authorities.
On the Comparative Table the letter Y signifies mandatory reporting; P signifies
reporting is not required but rather is permissible or optional; N signifies no reporting
regime.
6. Maintain Records over Time: By law or regulation, banks and/or other covered
entities are required to keep records, especially of large or unusual transactions, for a
specified period of time, e.g., five years.
7. Disclosure Protection - Safe Harbor: By law, the jurisdiction provides a safe
harbor defense to banks and/or other covered entities and their employees who provide
otherwise confidential banking data to authorities in pursuit of authorized investigations.
8. Criminalize Tipping Off: By law, disclosure of the reporting of suspicious or
unusual activity to an individual who is the subject of such a report, or to a third party, is
a criminal offense.
9. Financial Intelligence Unit: The jurisdiction has established an operative central,
national agency responsible for receiving (and, as permitted, requesting), analyzing, and
disseminating to the competent authorities disclosures of financial information in order to
counter money laundering. An asterisk reflects those jurisdictions that are not members
of the Egmont Group.
10. Cross-Border Transportation of Currency: By law or regulation, the jurisdiction has
established a declaration or disclosure system for persons transiting the jurisdictions
borders, either inbound or outbound, and carrying currency or monetary instruments
above a specified threshold.
40
11. International Law Enforcement Cooperation: Jurisdiction cooperates with

authorized investigations involving or initiated by third party jurisdictions, including
sharing of records or other financial data, upon request. No known legal impediments to
cooperation exist in current law.
12. Mutual Legal Assistance: By law or through treaty, the jurisdiction has agreed to
provide and receive mutual legal assistance, including the sharing of records and data.
13. System for Identifying and Forfeiting Assets: The jurisdiction has established a
legally authorized system for the tracing, freezing, seizure, and forfeiture of assets
identified as relating to or generated by money laundering activities.
14. Arrangements for Asset Sharing: By law, regulation or bilateral agreement, the
jurisdiction permits sharing of seized assets with third party jurisdictions that assisted in
the conduct of the underlying investigation.
15. Criminalized the Financing of Terrorism: The jurisdiction has criminalized the
provision of material support to terrorists, terrorist activities, and/or terrorist
organizations as required by the UN International Convention for the Suppression of the
Financing of Terrorism and UN Security Council Resolution 1373.
16. Report Suspected Terrorist Financing: By law or regulation, banks and/or other
covered entities are required to record and report transactions suspected to relate to the
financing of terrorists, terrorist groups or terrorist activities to designated authorities.
17. States Party to 1988 UN Drug Convention: States party to the 1988 United Nations
Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, or a
territorial entity to which the application of the Convention has been extended by a party
to the Convention.
18. States Party to the UN International Convention for the Suppression of the Financing
of Terrorism: States party to the International Convention for the Suppression of the
Financing of Terrorism, or a territorial entity to which the application of the Convention
has been extended by a party to the Convention.
19. States Party to the UN Convention against Transnational Organized Crime: States
party to the United Nations Convention against Transnational Organized Crime
(UNTOC), or a territorial entity to which the application of the Convention has been
extended by a party to the Convention.
20. States Party to the UN Convention against Corruption: States party to the United
Nations Convention against Corruption (UNCAC), or a territorial entity to which the
application of the Convention has been extended by a party to the Convention.
21. US or International Sanctions/Penalties: The US, another jurisdiction and/or an
international organization, e.g., the UN or FATF, has imposed sanctions or penalties
against the jurisdiction. A countrys inclusion in the FATFs International Cooperation
Review Group exercise is not considered a sanction or penalty unless the FATF
recommended counter-measures against the country/jurisdiction.
41
Comparative Table
Cross-Border Transportation of Currency
States Party to Intl. Terror Finance Conv.

States Party to 1988 UN Drug Convention
(*)MeUnitUnit/EgmontEgmont Egmont
System for Identifying/Forfeiting Assets

Criminalized Drug Money Laundering
Report Suspicious Transactions (YPN)
Disclosure Protection - Safe Harbor
Report Suspected Terrorist Financing

Criminalized Financing of Terrorism
Actions by Governments
Intl Law Enforcement Cooperation
US or Intl Org Sanctions/Penalties

Know-Your-Customer Provisions
Arrangements for Asset Sharing

Criminalized ML Beyond Drugs
Financial Intelligence Unit (*)

Maintain Records Over Time
Report Large Transactions
Criminalize Tipping Off
Mutual Legal Assistance
States Party to UNTOC
States Party to UNCAC

Govt/Jurisdiction
Afghanistan Y Y Y Y Y Y Y Y Y Y Y N Y N Y Y Y Y Y Y N
Algeria Y Y Y N Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Andorra Y Y Y N Y Y Y Y Y Y Y Y Y N Y Y Y Y N N N
Argentina Y Y Y Y Y Y Y Y Y Y Y Y N N Y N Y Y Y Y N
Aruba Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N N
Albania Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Algeria Y Y Y N Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Angola Y Y Y N Y Y Y N Y N N N N N Y Y Y Y Y Y N
1
Anguilla Y Y Y Y Y Y Y Y N Y Y Y Y Y Y Y Y N N N N
Antigua and Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Barbuda
Armenia Y Y Y Y Y Y Y N Y Y Y Y Y N Y Y Y Y Y Y N
Austria Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Australia Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Azerbaijan Y Y Y Y Y Y Y Y Y Y* Y Y Y N Y Y Y Y Y Y N
Bahamas Y Y Y Y Y Y Y Y N Y Y Y Y Y Y Y Y Y Y Y N
Bahrain Y Y Y N Y Y Y Y Y Y Y N Y N Y Y Y Y Y Y N
Bangladesh Y Y Y Y Y Y N N Y Y* Y Y Y N Y Y Y Y N Y N
Barbados Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y N N N
Belarus Y Y Y Y Y Y Y N Y Y Y Y Y N Y Y Y Y Y Y Y
Belgium Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Belize Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N N
Benin Y Y N N Y Y Y Y N Y* Y Y Y N N N Y Y Y Y N
1
The UK extended its application of the 1988 Convention and the UK Terrorism Order 2001 to Anguilla, Bermuda, the British
Virgin Islands, the Cayman Islands, Montserrat, the Turks and Caicos, Isle of Man, Bailiwick of Jersey, and Guernsey. The
International Convention for the Suppression of Terrorism has not yet been so extended.
42







1
Bermuda Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y N N N N
Bolivia Y Y Y Y Y Y Y Y Y Y* Y N Y N N N Y Y Y Y Y
Bosnia & Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Herzegovina
Botswana Y Y Y Y Y Y Y Y Y Y* Y Y Y N N N Y Y Y Y N
Brazil Y Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y N
British Virgin Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N N Y N
1
Islands
Brunei Darussalam Y Y Y N Y Y Y Y N Y* Y Y Y N Y Y Y Y Y Y N
Bulgaria Y Y Y Y Y Y Y Y Y Y Y Y y Y Y Y Y Y Y Y N
Burkina Faso Y Y Y Y Y Y Y Y N Y* Y Y Y N Y Y Y Y Y Y N
Burma Y Y Y Y Y Y Y Y Y Y* Y N Y N N N Y Y Y N Y
Burundi Y Y Y N Y Y N N N Y* Y Y N N Y Y Y Y Y Y N
Cambodia Y Y Y Y Y Y N Y Y Y* Y Y N N Y Y Y Y Y Y N
Cameroon Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Canada Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Cape Verde Y Y Y Y Y Y Y Y Y Y* Y Y Y Y Y Y Y Y Y Y N
1
Cayman Islands Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y N N N N N
Central African Y Y Y Y Y Y N Y N N N N Y N Y N Y Y Y Y N
Republic
Chad Y Y Y N Y Y Y Y N Y* Y N N N N N Y Y Y N Y
Chile Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
China Y Y Y Y Y Y Y Y Y Y N Y N N Y Y Y Y Y Y N
Colombia Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Comoros Y Y Y Y Y N N N Y Y* Y Y N N N N Y Y Y Y N
Congo, (Dem Y Y Y Y Y Y Y Y Y Y* Y Y Y Y Y Y Y Y N N N
Republic)
43







Congo,Republic of Y Y Y Y Y Y N N Y Y* Y Y Y Y Y Y Y Y N N N
Cook Islands Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N N
Costa Rica Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Cote dIvoire Y Y Y Y Y Y Y N Y N Y Y Y N Y Y Y Y N N N
Croatia Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Cuba Y Y Y Y Y Y Y Y Y N N N Y N Y Y Y Y Y Y Y
Curacao Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
1
Cyprus (1) Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Czech Republic Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y N N N
Denmark Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Djibouti Y Y Y Y Y Y Y Y N N Y Y Y N Y Y Y Y Y Y N
Dominica Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y N Y N
Dominican Y Y Y Y Y Y N N Y Y* Y Y Y Y Y Y Y Y Y Y N
Republic
Ecuador Y Y Y Y Y Y Y Y Y Y* Y Y Y Y Y Y Y Y Y Y N
Egypt Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y
El Salvador Y Y Y Y Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y N
Equatorial Guinea Y Y Y Y N Y N N N N N N N N N N N Y Y N N
Eritrea N N N Y Y Y N N Y Y* Y N N N N N Y N N N Y
Estonia Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Ethiopia Y Y Y Y Y Y Y Y Y N Y Y Y U Y Y Y N Y Y N
Fiji Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y N Y N
Area administered by Y Y Y Y Y Y N N Y Y N N Y N Y Y N/ N/ N/ N/ N
Turkish Cypriots A A A A
44







Finland Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
France Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Gabon Y Y Y N Y Y N N N N Y N N N Y Y Y Y Y Y N
Gambia Y Y Y Y Y Y N Y Y Y* Y Y Y N Y Y Y N Y N N
Georgia Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Germany Y Y Y N Y Y Y N Y Y Y Y Y Y Y Y Y Y Y N N
Ghana Y Y Y Y Y Y Y Y Y Y* Y Y Y N Y Y Y Y N Y N
Gibraltar Y Y Y Y Y Y Y Y N Y Y Y Y Y Y Y N N Y Y N
Greece Y Y Y N Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Grenada Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y N N
Guatemala Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
1
Guernsey Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y N Y N
Guinea Y N N N N N N N Y N N N N N N N Y Y Y N N
Guinea-Bissau Y Y Y Y Y Y Y N N N N N Y Y Y N Y N N N Y
Guyana Y Y Y Y Y Y Y Y Y Y* Y Y Y N Y Y Y Y Y Y N
Haiti Y Y Y Y Y Y Y Y Y Y* Y Y Y N N N Y N N Y N
Honduras Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
1
Hong Kong Y Y Y N Y Y Y Y N Y Y Y Y Y Y Y Y Y Y Y N
Hungary Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Iceland Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y N N N
India Y Y Y Y Y Y N Y Y Y Y Y Y N Y Y Y Y Y Y N
Indonesia Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
1
Isle of Man Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y N Y N
Iran Y Y Y N Y Y N N N N N N N N N N Y N N Y Y
Iraq Y Y Y Y Y Y Y Y Y Y* Y N Y N Y Y Y N Y Y N
Ireland Y Y Y Y Y Y Y Y Y Y N Y Y N Y Y Y Y Y Y N
Israel Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
1
The Peoples Republic of China extended the UN Financing of Terrorism Convention to the Special Administrative Regions of
Hong Kong and Macau.
45







Italy Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Jamaica Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y Y Y Y Y N
Japan Y Y N Y Y Y Y Y Y Y Y Y Y N Y Y Y Y N N N
1
Jersey Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y N Y N
Jordan Y Y Y N Y Y Y Y Y Y* N Y N N Y Y Y Y Y Y N
Kazakhstan Y Y Y Y Y Y Y Y Y Y* Y Y Y N Y Y Y Y Y Y N
Kyrgyz Republic Y Y Y Y Y Y N N Y Y Y Y Y N Y Y Y Y Y Y N
Kenya Y Y Y Y Y Y Y Y N N Y Y Y Y N N Y Y Y Y N
Korea (DPRK) N N N N N N N N N N N N N N N N Y N N N Y
Korea, Republic of Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N Y N
Kosovo Y Y Y Y Y Y N N Y Y* Y N Y N Y Y N N N N N
Kuwait Y Y Y Y Y Y Y Y Y Y* Y N Y Y N N Y N Y Y N
Laos Y Y Y Y Y Y N N Y Y* Y Y N N Y N Y Y Y Y N
Latvia Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Lebanon Y Y Y N Y Y Y N N Y Y N Y N Y Y Y N Y Y N
Lesotho Y Y Y Y Y Y Y Y Y Y* Y Y Y Y Y Y Y Y Y Y N
Liberia Y Y Y Y N Y N N N N Y N N N N N Y Y Y Y Y
Libya Y Y Y N Y Y Y Y Y Y* Y N N N N N Y Y Y Y N
Liechtenstein Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Lithuania Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Luxembourg Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
1
Macau Y Y Y N Y Y Y Y N Y Y Y Y Y Y Y Y Y Y Y N
Macedonia Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Madagascar Y Y Y N Y Y Y Y Y Y* Y Y Y N N N Y Y Y Y N
Malawi Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Malaysia Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Maldives Y N Y N Y N N N N Y* Y Y Y N Y Y Y Y N Y N
46







Mali Y Y Y N Y Y Y N N N Y Y Y Y Y Y Y Y Y Y N
Malta Y Y Y N Y Y Y Y Y Y* Y Y Y N Y Y Y Y Y Y N
Marshall Islands Y Y N N N N N N N N Y Y Y N Y N N Y N N N
Mauritania Y Y Y Y Y Y Y Y Y Y* Y Y Y Y Y Y Y Y Y Y Y
Mauritius Y Y Y N Y Y Y Y Y Y Y N Y N Y Y Y Y Y Y N
Mexico Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Micronesia Y Y Y N Y Y Y Y Y Y* Y Y Y N N N Y Y Y N N
Moldova Y Y Y Y Y Y Y N Y Y Y Y Y N Y Y Y Y Y Y N
Monaco Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N N
Mongolia Y Y Y N Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Montenegro Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
1
Montserrat Y Y Y N Y Y Y Y N N Y Y Y Y Y Y Y N N N N
Morocco Y Y Y Y Y Y Y Y Y Y* Y Y Y Y Y Y Y Y Y Y N
Mozambique Y Y Y Y Y Y Y Y Y N Y Y Y N Y Y Y Y Y Y N
Namibia Y Y Y N Y Y Y Y N Y* N Y Y Y N N Y N Y Y N
Nauru Y N Y Y Y Y Y Y Y Y* N N Y N Y Y N Y N N N
Netherlands Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Nepal Y Y Y Y Y Y Y Y Y Y* Y Y Y N Y Y Y N N N N
New Zealand Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Nicaragua Y Y Y Y Y Y Y Y Y N Y Y Y N Y Y Y Y Y Y N
Niger Y Y Y Y Y Y N Y Y Y* N N Y N Y Y Y Y Y Y N
Nigeria Y Y Y Y Y Y N Y Y Y Y Y Y N N N Y Y Y Y N
Norway Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Oman Y Y Y Y Y Y Y Y Y Y* Y Y Y N Y Y Y N Y N N
Pakistan Y Y Y N Y Y Y Y N Y* N N N N Y Y Y Y Y Y N
Palau Y Y Y Y Y Y Y Y Y Y* Y Y N N Y Y N Y N N N
47







Panama Y Y Y Y Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y N
Papua New Guinea Y Y Y Y Y Y N N Y N Y N Y N N N N Y N Y N
Paraguay Y Y Y Y Y Y Y Y Y Y Y Y N N Y Y Y Y Y Y N
Peru Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y Y Y N
Philippines Y Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y N
Poland Y Y Y Y Y Y Y Y Y Y Y Y Y N N Y Y Y Y Y N
Portugal Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Qatar Y Y Y N Y Y Y Y Y Y Y N Y Y Y Y Y Y Y Y N
Romania Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Russia Y Y Y Y Y Y Y N Y Y Y Y Y N Y Y Y Y Y Y N
Rwanda Y Y Y Y Y Y N N Y Y* Y N Y N Y Y Y Y Y Y N
Sao Tome & Y N N N N N N N N N N N N N N N Y Y Y Y N
Principe
St. Kitts and Nevis Y Y Y N Y Y Y Y Y Y Y Y Y N Y Y Y Y Y N N
St. Lucia Y Y Y N Y Y Y Y Y Y Y Y Y N Y Y Y N N N N
St. Vincent and the Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y N N N
Grenadines
Samoa Y Y Y Y Y Y Y Y Y Y* Y Y Y Y Y Y Y Y N N N
San Marino Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N N
Saudi Arabia Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y Y N N
Senegal Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Serbia Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y Y Y N
Seychelles Y Y N N Y Y Y Y N Y* Y Y Y N Y Y Y Y Y Y N
Sierra Leone Y Y Y Y Y Y Y Y Y Y* Y Y Y N N N Y Y N Y Y
Singapore Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y
48







Slovak Republic Y Y Y N Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Slovenia Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y
Solomon Islands Y Y N N Y Y Y Y Y Y* Y N Y N Y Y N Y N N N
Somalia N N N N N N N N N N N N N N N N N N N N N
South Africa Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Spain Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Sri Lanka Y Y Y Y Y Y N N Y Y Y Y Y N Y Y Y Y Y Y N
Sudan Y Y Y Y Y Y Y Y Y Y* Y Y Y N Y Y Y Y Y N Y
Suriname Y Y Y Y Y Y N N Y Y* Y Y Y N N Y Y N N N N
Swaziland Y Y Y Y Y Y Y Y Y N Y Y N N N Y Y Y Y Y N
Sweden Y Y Y N Y Y Y Y N Y Y Y Y N Y Y Y Y Y Y N
Switzerland Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N
Syria Y Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y N Y
Tajikistan Y Y Y N N N Y N Y Y* Y Y Y N Y N Y Y Y Y N
Taiwan Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y Y N* N* N* N* N
Tanzania Y Y Y Y Y Y Y Y N Y* Y Y Y N Y Y Y Y Y Y N
Thailand Y Y Y Y Y Y Y N N Y Y Y Y Y Y Y Y Y N N N
Timor-Leste N N N N N N N N N N N N N N N N N N Y Y N
Togo Y Y Y Y Y N N N Y Y* Y N Y N Y Y Y Y Y Y Y
Tonga Y Y Y Y P Y Y Y Y Y* Y Y Y N Y Y Y Y N N N
Trinidad & Y Y Y N Y Y Y Y N Y* Y Y Y Y Y Y Y Y Y Y N
Tobago
Tunisia Y Y Y Y Y Y Y Y Y Y* Y Y Y N Y Y Y Y Y Y N
Turkey Y Y Y N Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y N
Turkmenistan Y Y Y Y Y Y N Y Y Y* Y Y Y N Y N Y Y Y Y N
1
Turks and Caicos Y Y Y N Y Y Y Y Y Y Y Y Y Y Y Y Y N N N N
Ukraine Y Y Y Y Y Y Y Y Y Y Y Y N Y Y Y Y Y Y Y N
UAE Y Y Y Y Y Y Y N Y Y Y N Y N Y Y Y Y Y Y N
49
Yemen
Zambia
Uganda
Vietnam
Vanuatu
Uruguay
Venezuela
Zimbabwe
Uzbekistan
United States
United Kingdom
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
N
Y
Y
Y
N
Y
Y
Y
Y
Y
Y
Y
Y
Y
N
N
Y
Y
N
Y
Y
Y
N
Y
N
Y
Y
Y
Y
Y
Y
Y
Y
N
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
N
Y
Y
Y
Y
Y
N
Y
Y
Y
Y
N
N
Y
Y
Y
Y
N
Y
Y
50
Y
Y
Y
Y
Y
Y
Y
Y
N
Y
Y
N
Y
Y
Y
N
Y
Y
Y*
Y*
Y*
Y*
Y
Y
Y
Y
N
Y
Y
Y
Y
Y
Y
N
Y
Y
Y
N
Y
Y
Y
N
Y
Y
Y
Y
Y
Y
N
Y
Y
Y
N
Y
Y
Y
Y
Y
Y
N
Y
N
N
N
Y
Y
Y
Y
Y
N
Y
Y
Y
Y
Y
Y
Y
Y Criminalized Financing of Terrorism

Y
Y
Y
N
Y
Y
Y
N
Y
Y

Y
Y
Y
Y
Y
Y
Y
Y
Y
Y
Y

Y
N
Y
Y
Y
Y
Y
Y
N
Y
Y

Y
Y
N
Y
N
Y
Y
Y
N
Y
Y

N
Y
Y
Y
N
N
Y
Y
Y
Y
Y

Y
N
N
N
N
N
N
N
N
N
N

INCSR Volume II Template Key
1. INTRODUCTORY PARAGRAPH
This section provides a historical and economic picture of the country or jurisdiction, particularly
relating to the countrys vulnerabilities to money laundering/terrorist financing (ML/TF).
Information on the extent of organized criminal activity, corruption, drug-related money
laundering, financial crimes, smuggling, black market activity and terrorist financing should be
included.
This section should also include a brief summary of the scope of any offshore sector, free trade
zones, the informal financial sector, alternative remittance systems or other prevalent area of
concern or vulnerability. Discussion of deficiencies in any of these areas should be further
discussed in item 9, below.
2. DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS
RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE
SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL
SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.:
(Y/N)
This question addresses whether the jurisdictions financial institutions engage in currency
transactions involving international narcotics trafficking proceeds that include significant
amounts of U.S. currency or currency derived from illegal drug sales in the United States or that
otherwise significantly affect the United States.
3. CRIMINALIZATION OF MONEY LAUNDERING:
All serious crimes approach or list approach to predicate crimes:
Legal persons covered: criminally: (Y/N) civilly: (Y/N)
In general, two methods of designating money laundering predicate crimes are in use. The
response to this question indicates which method of designation the country uses - does the
country list specific crimes as predicate crimes for money laundering in its penal code?
Conversely, does it use an all serious crimes approach, stating that all crimes with penalties
over a specified amount or that carry a threshold minimum sentence are money laundering
predicate crimes?
Are legal persons, that is, corporations, partnerships, or any legal entity, liable for money
laundering/terrorist financing activity by law? Are they subject to criminal penalties, such as
fines? Are they subject to civil or administrative penalties, such as civil money penalties, or
suspension or loss of license?
4. CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: (Y/N)
UN lists of designated terrorists or terrorist entities distributed to financial institutions:
(Y/N)
(Please refer to the Department of States Country Reports on Terrorism, which can be
found here: http://www.state.gov/s/ct/rls/crt/).
51
The seizure and forfeiture of assets (including but not limited to bank accounts, other financial
assets, airplanes, autos, residences, other property) belonging to terrorists or terrorist
organizations can be important elements in efforts to control the financing and perpetration of
terrorist acts and terrorism.
Does the government have an independent national system and mechanism for freezing terrorist
assets in a timely manner?
Does the government distribute to financial institutions the names of suspected terrorists and
terrorist organizations listed on the United Nations 1267 Sanctions Committees consolidated list
as being linked to Usama bin Ladin, members of the al-Qaida organization or the Taliban?
The link to the Department of States Country Reports on Terrorism will appear if a submission
for the country/jurisdiction appears in that report.
5. KNOW-YOUR-CUSTOMER RULES:
Covered entities: A list of the types of financial institutions and designated non-financial
businesses and professions covered by KYC rules
Enhanced due diligence procedures for PEPs: Foreign: (Y/N) Domestic: (Y/N)
Customer due diligence (CDD) or know your customer (KYC) programs should apply not only
to banks or financial institutions but also to designated non-financial businesses and professions
(DNFBPs). Covered institutions should be required to know, record, and report the identity of
customers engaging in significant transactions. Entities such as securities and insurance brokers,
money exchanges or remitters, financial management firms, gaming establishments, lawyers,
real estate brokers, high-value goods dealers and accountants, among others, should all be
covered by such programs.
Countries should be using a risk-based approach to CDD or KYC. Using that approach, types of
accounts or customers may be considered either less or more risky and be subject to varying
degrees of due diligence. Politically exposed persons (PEPs) should be considered high risk and
should be subject to enhanced due diligence and monitoring. PEPs are those individuals who are
entrusted with prominent public functions in a country, for example, heads of state; senior
politicians; senior government, judicial or military officials; senior executives of state-owned
corporations; important political party officials. Does the country apply enhanced due diligence
procedures to foreign and/or domestic PEPs?
6. SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: A list of the types of financial institutions and designated non-financial
businesses and professions covered by reporting rules
Number of STRs received and time frame:
Number of CTRs received and time frame:
Suspicious transaction reporting requirements should apply not only to banks or financial
institutions but also to DNFBPs. Entities such as securities and insurance brokers, money
exchanges or remitters, financial management firms, gaming establishments, lawyers, real estate
brokers, high-value goods dealers and accountants, among others, should all be covered by such
programs.
If available, the report will include the number of suspicious transaction reports (STRs) received
by the designated government body and the time frame during which they were received. The
most recent information available, preferably the activity in 2010, will be included.
52
Similarly, if the country has a large currency transaction reporting requirement, whereby all
currency transactions over a threshold amount are reported to a designated government body, the
report will include the number of currency transaction reports (CTRs) received by the designated
government body and the time frame during which they were received. The most recent
information available, preferably the activity in 2010, will be included. The report should not
include information on CTRs not required to be forwarded to a designated government body but
held in institutions for government review.
7. MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:
Prosecutions: (Number and time frame)
Convictions: (Number and time frame)
Assets forfeited: criminally: (amount and time frame) civilly: (amount and time frame)
The seizure and forfeiture of assets (including but not limited to bank accounts, other financial
assets, airplanes, autos, residences, and other property) derived from the international drug trade,
money laundering, or other serious crimes can be important elements in efforts to control
criminal activity. If the jurisdiction has enacted laws authorizing the seizure and forfeiture of
assets identified as relating to or generated by money laundering activities, the report will
indicate the dollar equivalent of assets subject to criminal forfeiture and the relevant time frame.
Similarly, if the country has a non-conviction based or civil asset forfeiture regime, the dollar
equivalent of assets forfeited civilly and the relevant time frame will be included.
If available, the report will include the numbers of prosecutions and convictions and the relevant
time frames. The most recent information available, preferably the activity in 2010, will be
included.
8. RECORDS EXCHANGE MECHANISM:
With U.S.: (Y/N)
With other governments/jurisdictions: (Y/N)
Does the country/jurisdiction have in place treaties, memoranda of understanding or other
agreements to share information related to financial crimes, money laundering, and terrorist
financing with the United States? With other governments?
The report will indicate if the country/jurisdiction is a member of the Financial Action Task
Force (FATF) or a FATF-style regional body. A link to the website with its most recent mutual
evaluation will be shown.
9. ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:
Information in this section should include: changes in policy, law, and implementation of
regulations occurring since January 1, 2010, and any issues or deficiencies noted in the
country/jurisdictions AML/CFT program. These may include the following: resource issues,
legislative deficiencies, and/or implementation deficiencies; information on any U.S. or
international sanctions against the country/jurisdiction; whether the country has cooperated on
important cases with USG agencies or has refused to cooperate with foreign governments, as
well as any actions taken by the USG or any international organization to address such obstacles,
including the imposition of sanctions or penalties; any known issues with or abuse of non-profit
organizations, alternative remittance systems, offshore sectors, free trade zones, bearer shares, or
other specific sectors, or situations; any other information which impacts on the
countrys/jurisdictions ability to successfully implement a comprehensive AML/CFT regime or
provides information on successful, innovative policies or procedures.
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54
Countries/Jurisdictions of Primary Concern
Afghanistan
Afghanistans formal financial system is no longer rapidly expanding while traditional informal
financial systems, particularly regional hawala networks, remain significant in reach and scale.
Afghanistan currently is experiencing large gross outflows of currency. Annually, hundreds of
millions of dollars are transported out of the country through a variety of means. Terrorist and
insurgent financing, money laundering, cash smuggling, informal value transfer systems and
other activities designed to finance organized criminal activity continue to pose a serious threat
to the security and development of Afghanistan. Afghanistan remains a major drug trafficking
and drug producing country. The illicit narcotics trade, corruption and contract fraud are major
sources of laundered funds. Despite ongoing efforts by the international community to build the
capacity of Afghan police and customs forces, Afghanistan is unable to consistently uncover and
disrupt financial crimes because of limited resources, little expertise, and corruption and
insufficient political will. Proposed reforms often conflict with legal, historical, and cultural
factors.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED
TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT
AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: YES
CRIMINALIZATION OF MONEY LAUNDERING:
All serious crimes approach or list approach to predicate crimes: All crimes
Legal persons covered: criminally: YES civilly: NO
CRIMINALIZATION OF TERRORIST FINANCING:
Ability to freeze terrorist assets without delay: YES
UN lists of designated terrorists or terrorist entities distributed to financial institutions: NO
Please refer to the Department of States Country Reports on Terrorism, which can be found
here: http://www.state.gov/s/ct/rls/crt/)
KNOW-YOUR-CUSTOMER RULES:
Covered entities: Central Bank of Afghanistan (DAB), banks, money service providers,
insurance companies, dealers in precious metals and stones, lawyers, accountants, securities
dealers, and real estate agents
Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES
SUSPI CIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Financial institutions and money service businesses including informal
funds transfer providers such as hawaladars.
Number of STRs received and time frame: 598 from June 2006 to October 2010
Number of CTRs received and time frame: 1,744,169, from June 2006 to October 2010
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MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: None
Convictions: None
Assets forfeited: criminally: Not available civilly: Not available
RECORDS EXCHANGE MECHANISM:
With U.S.: YES
With other governments/jurisdictions: YES
Afghanistan is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial
Action Task Force (FATF)-style regional body. It is scheduled to undergo its first mutual
evaluation late in 2010.
ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:
In 2010 Afghanistan became a member of the Egmont Group of Financial Intelligence Units.
Money laundering and terrorist financing investigations in Afghanistan have been hampered by a
lack of capacity, awareness, and political commitment, particularly involving prosecutors and the
courts. Corruption permeates all levels of Afghan government and society and has a direct
impact on the lack of financial crimes enforcement. Afghanistan ranked 176 out of 178 countries
surveyed in Transparency Internationals 2010 Corruption Perception Index.
Border security continues to be a major issue throughout Afghanistan. In 2008 there were 14
official border crossings that came under central government control, utilizing international
assistance as well as local and international forces. However, many of the border areas are
under-policed or not policed at all. These areas are particularly susceptible to illicit cross-border
trafficking, trade-based money laundering, and bulk cash smuggling. Furthermore, officials
estimate there are over 1,000 unofficial border crossings along Afghanistans porous borders.
Customs authorities, with the help of outside assistance, have made improvements, but much
work remains to be done.
It is estimated that five percent or less of the Afghan population uses banks. Afghanistan is
widely served by the traditional and deeply entrenched hawala system, which provides a range of
financial and non-financial business services in local, regional, and international markets. It is
estimated between 80 percent and 90 percent of all financial transfers in Afghanistan are made
through hawala. Financial activities include foreign exchange transactions, funds transfers
(particularly to and from neighboring countries such as the UAE, Iran and Pakistan with weak
regulatory regimes for informal remittance systems), micro and trade finance, as well as some
deposit-taking activities. Although the hawala system and formal financial sector are distinct,
the two systems have links. Hawala dealers often keep accounts at banks and use wire transfer
services to settle their balances with other hawaladars abroad, while banks will occasionally use
hawaladars to transmit funds to hard-to-reach areas within Afghanistan. There are
approximately 250 known hawala dealers in Kabul, and approximately 1,500 dealers that vary in
size and reach spread throughout Afghanistans 34 provinces. Given how widely used the
hawala system is in Afghanistan, it undoubtedly is involved, intentionally or inadvertently, in
financial crimes; however, only a few STRs have been submitted by money service providers
(MSPs), including licensed hawaladars. This needs to be addressed immediately, while
continuing to license the remaining 50 percent - 60 percent of MSPs still operating outside the
formal sector.
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The Afghan government has no formal extradition or mutual legal assistance arrangements with
the United States. In the absence of a formal bilateral agreement between Afghanistan and the
United States, requests for extradition and mutual legal assistance have been processed on an ad
hoc basis, largely with the assistance of the Afghan Attorney Generals Office. The 2005
Afghan Counter Narcotics law, however, allows the extradition of drug offenders under the 1988
UN Drug Convention.
Antigua and Barbuda

Antigua and Barbuda is a significant offshore center that despite recent improvements remains
susceptible to money laundering due to its offshore financial sector and Internet gaming industry.
Illicit proceeds from the transshipment of narcotics and from financial crimes occurring in the
U.S. also are laundered in Antigua and Barbuda.
Antigua and Barbuda uses the East Caribbean (EC) dollar and its monetary authority is the
Eastern Caribbean Central Bank (ECCB). Seven other island economies are also members of the
ECCB: Anguilla, Dominica, Grenada, Montserrat, St Kitts and Nevis, St. Lucia, and St Vincent
and the Grenadines. The existence of this common currency may raise the risk of money
laundering, but there is little evidence that the EC dollar is a primary vehicle for money
laundering.
As of 2010, Antigua and Barbuda has 15 international banks, one international trust, three
offshore insurance companies, 3,497 international business corporations (IBCs), ten interactive
gaming companies, six interactive wagering companies, eight money services businesses, and 25
corporate management and trust services providers. In addition, there are five casinos. Bearer
shares are permitted for international companies but the names and addresses of directors (who
must be naturalized persons), the activities the corporation intends to conduct, the names of
shareholders, and number of shares they will hold are required to be disclosed. Registered
agents or service providers are required by law to know the names of beneficial owners. All
licensed institutions are required to have a physical presence, which means presence of at least a
full-time senior officer and availability of all files and records. Shell companies are not
permitted. Internet gaming companies are required to incorporate as IBCs, to report all payouts
over $25,000 to Antigua and Barbudas Office of National Drug and Money Laundering Control
Policy (ONDCP), and to have a physical presence, meaning the primary servers and the key
person are resident in Antigua and Barbuda.
A nominal free trade zone in the country seeks to attract investment in areas deemed as priority
by the government. Casinos and sports book-wagering operations in Antigua and Barbudas free
trade zone are supervised by the ONDCP, and the Directorate of Offshore Gaming. Internet
gaming companies are required to submit quarterly and annual audited financial statements and
maintain records relating to all gaming and financial transactions of each customer for six years.
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO
All serious crimes approach or list approach to predicate crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
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YES
Covered entities: Banks, agricultural credit institutions, and money exchangers; notaries;
domestic and Internet gaming centers; real estate and travel agents; company service
providers; lawyers; accountants; dealers in autos, precious metals and stones, and other high-
value goods; insurance brokers; and securities dealers
SUSPICIOUS TRANSACTION REPORTING REQUIREMENTS:
Covered entities: Banks, agricultural credit institutions, and money exchangers; notaries;
domestic and Internet gaming centers; real estate and travel agents; company service
providers; lawyers; accountants; dealers in autos, precious metals and stones, and other high-
value goods; insurance brokers; and securities dealers
Number of STRs received and time frame: 145, January to December 2010
Number of CTRs received and time frame: No information available
Prosecutions: One in 2009
Convictions: None
Assets forfeited: criminally: $23,000 (In addition, $1, 379,120 was confiscated on behalf of
US authorities.) civilly: None
With U.S.: YES
Antigua and Barbuda is a member of the Caribbean Financial Action Task Force (CFATF), a
Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can
be found here: http://www.cfatf-
gafic.org/downloadables/mer/Antigua_and_Barbuda_3rd_Round_MER_Final(Eng).pdf
During the year, the Prevention of Terrorism (Amendment) Act was passed, making further
explicit provisions for the de-listing of specified entities; however, deficiencies remain.
The Government of Antigua and Barbuda (GOAB) does not have a unified regulatory structure
or uniform supervisory practices for its domestic and offshore banking sectors. Currently, the
ECCB supervises Antigua and Barbudas domestic banking sector. The Registrar of Insurance
supervises and examines domestic insurance agencies. The Financial Services Regulatory
Commission is responsible for the regulation and supervision of all IBCs, including offshore
banks and all aspects of offshore gaming; this includes conducting examinations and reviews of
offshore financial institutions as well as some domestic financial entities, such as insurance
companies and trusts. The director of the ONDCP supervises all financial institutions for
compliance with suspicious transaction reporting requirements. Only gaming institutions are
required to file large currency transaction reports.
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The GOAB has taken steps to combat money laundering by passing relevant legislation that
applies to both domestic and offshore financial institutions, and establishing a thorough
regulatory regime. The GOAB should implement and enforce all provisions of its AML/CFT
legislation. The ONDCP should be given direct access to financial institution records in order to
effectively assess their AML/CFT compliance. Antigua and Barbuda has yet to prosecute a
money laundering case and there are few arrests or prosecutions. More comprehensive
investigations could lead to higher numbers of arrests, prosecutions, and convictions. Continued
efforts should be made to enhance the capacity of law enforcement and customs authorities to
recognize money laundering typologies that fall outside the formal financial sector. Continued
international cooperation, particularly with regard to the timely sharing of statistics and
information related to offshore institutions, and enforcement of foreign civil asset forfeiture
orders will likewise enhance Antigua and Barbudas ability to combat money laundering.
Australia
Australia is one of the major centers for capital markets in the Asia-Pacific region. While
narcotics offenses provide a substantial source of proceeds of crime, the majority of illegal
proceeds are derived from fraud-related offenses. The Government of Australia (GOA)
maintains a comprehensive system to detect, prevent, and prosecute money laundering. The last
few years have seen a noticeable increase in activities investigated by Australian law
enforcement agencies that relate directly to offenses committed overseas. Australias system has
evolved over time to address new money laundering and terrorist financing risks identified
through continuous consultation between government agencies and the private sector.
YES
(Please refer to the Department of States Country Reports on Terrorism, which can be found
Covered entities: Banks; gaming and bookmaking establishments and casinos; bullion and
cash dealers and money exchanges and remitters, including electronic funds transferors;
insurers and insurance intermediaries; securities or derivatives dealers; registrars and trustees;
issuers, sellers or redeemers of travelers checks, money orders or similar instruments;
preparers of payroll in whole or in part from currency on behalf of other persons; currency
couriers
59

Covered entities: Banks, gaming and bookmaking establishments and casinos; bullion and
cash dealers and money exchanges and remitters, including electronic funds transferors;
insurers and insurance intermediaries; securities or derivatives dealers; registrars and trustees;
issuers, sellers or redeemers of travelers checks, money orders or similar instruments;
preparers of payroll in whole or in part from currency on behalf of other persons; currency
couriers
Number of STRs received and time frame: 47,386 - 2009-2010
Number of CTRs received and time frame: 3,375,447 - 2009-2010
Prosecutions: 88 indictments - July 2009 - June 2010
Convictions: 50 in 2009 - 2010
Assets forfeited: criminally: $7,691,800 civilly: Not available
With U.S.: YES
Australia is a member of the Financial Action Task Force (FATF). It also serves as permanent
co-chair, and hosts and funds the Secretariat of the Asia/Pacific Group on Money Laundering
(APG), a FATF-style regional body. Its most recent mutual evaluation can be found here:
http://www.fatf-gafi.org/dataoecd/60/33/35528955.pdf
The formal and informal money remittance sector is vulnerable to the risk of being exploited for
criminal purposes. Additionally, the majority of designated non-financial businesses and
professions (DNFBPs), such as real estate agents, dealers in precious stones and metals, and
specified legal, accounting, trust, and company service providers are not yet covered by reporting
and record keeping requirements of Australias AML/CFT laws, nor are politically exposed
persons subject to enhanced due diligence procedures. This lack of coverage leads to increased
vulnerabilities in these entities. Australia should amend its legislation, as necessary, to cover all
DNFBPs.
In comparison to the size of the Australian economy and the comprehensive anti-money
laundering countermeasures in place, the number of convictions for money laundering remains
very low.
Austria
Austria is a major regional financial center and Austrian banking groups control significant
shares of the banking markets in Central, Eastern, and Southeastern Europe. Money laundering
occurs within the Austrian banking system as well as in non-bank financial institutions and
businesses. Money laundered by organized crime groups derives primarily from serious fraud,
smuggling, corruption, narcotics-trafficking, and trafficking in persons. Theft, drug trafficking
and fraud are the main predicate crimes in Austria according to the statistics of convictions and
investigations. Austria is not an offshore jurisdiction and has no free trade zones.
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All serious crimes approach or list approach to predicate crimes: Combination
YES
Covered entities: Banks and credit institutions, financial institutions, leasing and exchange
businesses, safe custody services, portfolio advisers, brokers, securities firms, money
transmitters, insurance companies and intermediaries, casinos, all dealers including those in
high value goods, auctioneers, real estate agents, lawyers, notaries, certified public
accountants, and auditors.
Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO
Covered entities: Banks and credit institutions, financial institutions, leasing and exchange
businesses, safe custody services, portfolio advisers, brokers, securities firms, money
transmitters, insurance companies and intermediaries, casinos, all dealers including those in
high value goods, auctioneers, real estate agents, lawyers, notaries, certified public
accountants, auditors, and customs officials.
Number of STRs received and time frame: 1,385 in 2009
Number of CTRs received and time frame: Not applicable
Prosecutions: 289 in 2009
Convictions: Five in 2009
With U.S.: YES
Austria is a member of the Financial Action Task Force (FATF). Its most recent mutual
evaluation can be found here: http://www.fatf-gafi.org/dataoecd/22/50/44146250.pdf
Numerous legal amendments to bring Austria's AML/CFT regime more in line with FATF
standards were adopted by Parliament on May 20, 2010, and entered into force July 1, 2010.
Those amendments strengthen regulatory standards, give more power and responsibility to bank
compliance officers and regulators (in particular Austria's FIU), and make asset seizure easier in
AML/CFT cases. New paragraph 165 of the Austrian Penal Code extends the scope of money
laundering offenses to "self-laundering" of illicit proceeds. Austria has a combination of both an
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all serious crimes approach plus a list of predicate offenses which do not fall under the
domestic definition of serious crimes, but which Austria includes to comply with international
legal obligations and FATF standards.
Since July 1, 2010, asset freezes pursuant to UN and European Union (EU) sanctions are based
on Austrias new Sanctions Law (previously, the Foreign Exchange Act). The new Sanctions
Law significantly expands and improves implementation of UNSCR and European financial
sanctions on terrorists, including measures set forth in directly applicable EU Regulations. Asset
freezes now apply not just to financial funds but to all economic resources including real estate,
companies, and vehicles. The law provides for bans on travel and bans on rendering services to
designated entities; it also establishes administrative and criminal penalties.
The Government of Austria has committed to sharply restrict the issuance and use of bearer
shares. Draft legislation eliminating bearer shares for all companies except those listed on the
stock exchange has been circulated for comment.
Even absent a specific suspicion, new regulations require tax authorities to inform the FIU of all
cases where private foundations do not disclose the founding deed including all appendices and
supplementary documentation, as well as beneficial owners of hidden trusteeships.
In June 2010, the United States and Austria signed a bilateral asset sharing agreement to share
assets seized from convicted criminals.
Bahamas
The Commonwealth of The Bahamas is an important regional and offshore financial center. The
economy of the country is heavily reliant upon tourism, tourist-driven construction and the
offshore sector. The Bahamas is a transshipment point for cocaine bound for the United States
and Europe. Money laundering trends include the purchase of real estate, large vehicles a nd
jewelry, as well as the processing of money through a complex web of legitimate businesses, and
international business companies registered in the offshore financial sector. Drug traffickers and
other criminal organizations take advantage of the large number of international business
companies and offshore banks registered in The Bahamas to launder significant sums of money
despite strict KYC and transaction reporting requirements.
The country has one large free trade zone, Freeport Harbor. This zone is managed by a private
entity called the Freeport Harbor Company, which is owned and operated through a joint venture
between Hutchison Port Holdings (HPH) and The Port Group (The Grand Bahama Port
Authority). Businesses at the harbor include private boat, ferry and cruise ship visits, roll-
on/roll-off facilities for containerized and LTL cargo, and car transshipment. Freeport Harbor
has the closest offshore port to the United States and the entire country is relatively accessible by
medium sized boats. This makes smuggling and bulk cash money laundering relatively easy.
While it is illegal for citizens of the Bahamas to gamble, gambling is legal for tourists and there
are three main casinos.
All serious crimes approach or list approach to predicate crimes: List approach.
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YES
Covered entities: Banks and trust companies, insurance companies, securities firms and
investment fund administrators, financial and corporate service providers, cooperatives,
societies, casinos, lawyers, accountants, real estate agents, and company service providers
Covered entities: Banks and trust companies, insurance companies, securities firms and
investment fund administrators, financial and corporate service providers, cooperatives,
societies, casinos, lawyers, accountants, real estate agents, and company service providers
Number of STRs received and time frame: 138 STRs in 2009
Convictions: 0 in 2010
Assets forfeited: criminally: $0 in 2010 civilly: $0 in 2010
With U.S.: YES
The Bahamas is a member of the Caribbean Financial Action Task Force, (CFATF), a Financial
Action Task Force-style regional body. Its most recent mutual evaluation can be found here:
http://www.cfatf-
gafic.org/downloadables/mer/The_Bahamas_3rd_Round_MER_(Final)_English.pdf
The Government of the Commonwealth of the Bahamas should provide adequate resources to its
law enforcement, judicial, and prosecutorial bodies in order to enforce existing legislation and
safeguard the financial system from possible abuses. The Bahamas should continue to enhance
its anti-money laundering/counter-terrorist financing regime by implementing the National
Strategy on the Prevention of Money Laundering; by ensuring full compliance with UNSCRs
1267 and 1373; and by implementing a system to collect and analyze information on the cross
border transportation of currency. It should also ensure there is a public registry of the beneficial
owners of all entities licensed in its offshore financial center.
Additional gaps in the countrys legislation include a failure to criminalize participation in an
organized criminal group and to tighten the currency transaction reporting system to track people
arriving and leaving to all destinations.
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Belize
Belize is not a major regional financial center but is an offshore financial center. In an attempt to
diversify Belizes economic activities, authorities have encouraged the growth of offshore
financial activities that are vulnerable to money laundering, including offshore banks, insurance
companies, trust service providers, mutual fund companies, and international business
companies. Belize has pegged the Belizean dollar to the U.S. dollar and continues to offer
financial and corporate services to nonresidents in its offshore financial sector, which represents
a potential vulnerability for money laundering.
Most money laundering is largely thought to be related to proceeds from U.S. residents
participating in unlawful internet gaming. Belize is a transshipment point for marijuana and
cocaine. There is a growing indication that money laundering proceeds are related to proceeds
from the trafficking of illegal narcotics, psychotropic substances, and chemical precursors, and
that they are controlled by local drug trafficking organizations and organized criminals.
Belizean officials suspect that money laundering occurs primarily within the free trade zones.
Belizean officials believe the large Corozal Commercial Free Zone (CFZ) that operates at the
border with Mexico is involved in trade-based money laundering.
All serious crimes approach or list approach to predicate crimes: Both
YES
Covered entities: Domestic and offshore banks; venture risk capital; money broker, exchange
and transmission services; moneylenders and pawnshops; insurance; real estate; credit unions
and building societies; trust and safekeeping services
Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: YES
Covered entities: Domestic and offshore banks; venture risk capital; money broker,
exchange and transmission services; moneylenders and pawnshops; insurance; real estate;
credit unions and building societies; trust and safekeeping services
Number of STRs received and time frame: 67, January 1 through December 13, 2010
64

Prosecutions: Six, January 1 through December 13, 2010
Convictions: Five, January 1 through December 13, 2010
Assets forfeited: criminally: None civilly: $510,000
With U.S.: YES
Belize is a member of the Caribbean Financial Action Task Force (CFATF), a Financial Action
Task Force (FATF)-style regional body. Its most recent mutual evaluation cannot be found on
the CFATF website. A Report on the Observance of Standards and Codes prepared by the IMF
can be found at: http://www.imf.org/external/pubs/ft/scr/2004/cr04373.pdf
Belize lacks the resources to effectively enforce anti-money laundering rules. Belizes Financial
Intelligence Unit (FIU) has a broad mandate and is severely understaffed. The FIU staff does not
have sufficient training or experience in identifying, investigating, reviewing, and analyzing
evidence in money laundering cases. Prosecutors and judges also need additional training on
financial crimes, including money laundering. Prosecutors assigned to the FIU could also assist
with cases going to court, as the FIU is currently forced to contract outside attorneys to prosecute
its cases. If implemented, an arrangement for asset sharing may provide additional resources to
the FIU.
While it is widely believed that abuse occurs within the offshore sector and in the free trade
zones, no one from these organizations has been charged with a financial crime. Belize should
require the Commercial Free Zones (CFZ) to be reporting entities. The GOB should become a
party to the UN Convention against Corruption.
Bolivia
Bolivia is not a regional financial center, but money laundering activities continue to take place.
These illicit financial activities are related primarily to narcotics trafficking, corruption, tax
evasion, and smuggling and trafficking of persons. Hotels, currency exchange houses, casinos,
cash transporters, informal exchange houses, and wire transfer businesses are not subject to anti-
money laundering controls. The Bolivian financial system is highly dollarized, with
approximately 50% of deposits and loans distributed in U.S. dollars rather than Bolivianos, the
local currency (down from 90% in 2004). Bolivia has 13 free trade zones, located in El Alto,
Cochabamba, Santa Cruz, Oruro, Puerto Aguirre, and Desaguadero, for commercial and
industrial use.
Bolivia was suspended from the Egmont Group of Financial Intelligence Units (the Egmont
Group) in July 2007 because Bolivia has not criminalized terrorist financing. In December of
2008, the Egmont Group expelled Bolivias FIU from its membership, due to a lack of terrorism
financing legislation in Bolivian law. To regain Egmont membership, Bolivia must reapply and
provide written evidence of its FIUs compliance with Egmont FIU definitions and requirements.
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All serious crimes approach or list approach to predicate crimes: List approach.
Ability to freeze terrorist assets without delay: NO
YES
here: http://www.state.gov/s/ct/rls/crt/2009/140888.htm
Covered entities: Banks, insurance companies, securities brokers and financial intermediaries
Covered entities: Banks, insurance companies, securities brokers and financial intermediaries
Number of STRs received and time frame: Not available
Number of CTRs received and time frame: Not available
Prosecutions: Not available
Convictions: Not available
With U.S.: NO
With other governments/jurisdictions: Not available
Bolivia is a member of the Financial Action Task Force of South America (GAFISUD), a
be found here: http://www.gafisud.info/pdf/InformeBolivia.pdf
The expulsion of the U.S. Drug Enforcement Administration from Bolivia in November 2008
has diminished the effectiveness of several financial investigative groups operating in the
country, including Bolivias Financial Investigative Team, the Bolivian Special Counternarcotics
Police, and the Bolivian Special Operations Force. Most money laundering investigations
continue to be in the Department of Santa Cruz and are associated with narcotics trafficking
organizations.
Bolivias expulsion from the Egmont Group bars the UIF from participating in Egmont Group
meetings or using the Egmont Secure Web (the primary means of information exchange among
Egmont Group member FIUs).
New legislation introduced in March of 2010 provides for money laundering to be treated as an
autonomous offense. The law also expands the list of predicate offenses for money laundering
but still does not include all offenses recommended in the international standards. The predicate
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offenses for money laundering should cover all serious offenses, and Bolivia should seek to
extend its laws to the widest range of predicate offenses.
In September 2010, a draft law to criminalize terrorist financing was provided to the Council of
Ministers for approval. This draft law also includes provisions addressing the freezing, seizure
and confiscation of terrorist-related assets; and gives authority to the FIU to freeze for 48 hours
the execution of a transaction suspected of being related terrorist financing. It appears the
proposed criminalization of TF requires intent. This may pose difficulties in the application
and interpretation of the provision. The provision seems to require that the funds are actually
used to carry out or attempt a terrorist act. Separately, obligated entities should be required by
law or regulation to report to the FIU information related to terrorist financing.
The continued lack of personnel, combined with inadequate resources and weaknesses in
Bolivias basic legal and regulatory framework, limits the UIFs reach and effectiveness. Given
the UIFs limited resources relative to the size of Bolivias financial sector, compliance with
reporting requirements is extremely low. The exchange of information between the UIF and
appropriate police investigative entities is also limited, although the UIF does maintain a
database of suspect persons that financial entities must check before conducting business with
clients.
Brazil
Brazil is the worlds fifth largest country in size and population, and as of 2010, the eighth
largest economy in the world. Brazil is considered a regional financial center for Latin America.
It is a major drug-transit country, as well as one of the worlds largest consumer countries.
Brazil maintains some controls of capital flows and requires disclosure of the ownership of
corporations. Money laundering in Brazil is primarily related to domestic crime, especially drug
trafficking, corruption, organized crime, gambling, and trade in various types of contraband.
Laundering channels include the use of banks, real estate investment, financial asset markets,
luxury goods, remittance networks, informal financial networks, and trade-based money
laundering.
Sao Paulo and the Tri-Border Area (TBA) of Brazil, Argentina, and Paraguay are particular areas
that possess high risk factors for money laundering. In addition to weapons and narcotics, a wide
variety of counterfeit goods, including CDs, DVDs, and computer software (much of it of Asian
origin), are routinely smuggled across the border from Paraguay into Brazil. In addition to Sao
Paulo and the TBA, other areas of the country are also of growing concern. The Government of
Brazil (GOB) and local officials in the states of Mato Grosso do Sul, and Parana, for example,
have reported increased involvement by Rio de Janeiro and Sao Paulo gangs in the already
significant trafficking in weapons and drugs that plagues Brazils western border states.
All serious crimes approach or list approach to predicate crimes: List approach
Legal persons covered: criminally: NO civilly: NO
67

YES
Covered entities: Commercial and savings banks and credit unions; insurance companies and
brokers; securities, foreign exchange, and commodities brokers/traders; real estate brokers;
credit card companies; money remittance businesses; factoring companies; gaming and
lottery operators and bingo parlors; dealers in jewelry, precious metals, art and antiques
Covered entities: Commercial and savings banks and credit unions; insurance companies and
brokers; securities, foreign exchange, and commodities brokers/traders; real estate brokers;
credit card companies; money remittance businesses; factoring companies; gaming and
lottery operators and bingo parlors; dealers in jewelry, precious metals, art and antiques
Number of CTRs received and time frame: 1,746, 494 in 2009
With U.S.: YES
Brazil is a member of the Financial Action Task Force (FATF) and the FATF of South America
(GAFISUD), a FATF-style regional body. Its most recent mutual evaluation can be found here:
www.fatf-gafi.org
The GOB achieved visible results from investments in border and law enforcement infrastructure
that were executed with a view to gradually control the flow of goods, both legal and illegal
across Brazils land borders. Anti-smuggling and law enforcement efforts by state and federal
agencies have increased. Brazilian Customs and the Brazilian Tax Authority (Receita Federal)
continue to take effective action to suppress the smuggling of drugs, weapons, and contraband
goods along the border with Paraguay. According to the Receita Federal, in 2009 the agency
interdicted a large volume of smuggled goods, including drugs, weapons, and munitions.
Because of the effective crackdown on the Friendship Bridge connecting Foz do Iguau, Brazil,
and Ciudad del Este, Paraguay, most smuggling has migrated to other sections of the border.
The Federal Police have Special Maritime Police Units that aggressively patrol the maritime
border areas.
68
Legal persons are not subject to direct civil or administrative liability for committing money
laundering (ML) offenses. Corporate criminal liability is not possible due to fundamental
principles of domestic law. Natural and legal persons are not subject to effective sanctions for
ML because systemic problems in the court system seriously hamper the ability to obtain final
convictions and sentences, and legal persons are not subject to direct civil/administrative
sanctions for committing a ML offense. Very few final convictions for ML and convictions in
the first instance are low given the level of ML risk and size of the financial sector. The GOB
should take legislative action to establish direct civil or administrative corporate liability for ML
and ensure that effective, proportionate and dissuasive sanctions may be applied to legal persons.
Brazil also should continue to support the Specialized Federal Courts and other measures to
ameliorate the negative impact of some of the systemic problems in the court system which are
undermining the ability to effectively apply final sanctions for ML. The GOB should continue
taking measures to ensure that the overlapping jurisdiction among federal and state law
enforcement authorities does not impede the effectiveness of their ability to investigate ML.
Brazil should also continue the PNLD training program and extend it as widely as possible to
ensure that police, prosecutors and judges at both the state and federal levels have sufficient
training in the investigation and prosecution of ML cases.
Most high-priced goods in the TBA are paid for in US dollars, and cross-border bulk cash
smuggling is a major concern. Large sums of US dollars generated from licit and suspected illicit
commercial activity are transported physically from Paraguay through Uruguay and Brazil to
banking centers in the United States.
In February 2006, U.S. Immigration and Customs Enforcement established a Brazil-based
partner Trade Transparency Unit (TTU) to aggressively analyze, identify, and investigate
companies and individuals involved in trade-based money laundering activities between Brazil
and the United States. As a result of the TTU, Brazil has identified millions of dollars of lost
revenue.
The GOB has generally responded to U.S. efforts to identify and block terrorist-related funds.
None of the individuals and entities on the UNSCR 1267 Sanctions Committees consolidated
list has been found to be operating or executing financial transactions in Brazil, and the GOB has
frequently insisted that there is no evidence of terrorist financing within Brazil. However, in
December 2010, the U.S. Treasury Department designated Bilal Mohsen Wehbe, Hizballahs
chief representative in South America, as a Specially Designated Global Terrorist (SDGT) under
Executive Order 13224. Wehbe has been involved in transferring funds collected in Brazil to
Hizballah in Lebanon. In 2009, based on information provided by the F.B.I., a man was arrested
in Sao Paulo on suspicion that he was connected to the Jihad Media Battalion, a known terrorist
organization with possible ties to Al Qaeda. However, a Brazilian judge ordered his release after
several weeks, and the GOB has taken the position he had no demonstrable ties to any terrorist
activity.
Although Brazil is a party to the United Nations International Convention for the Suppression of
the Financing of Terrorism, it has not criminalized terrorist financing in a manner that is
consistent with international standards. Terrorist financing is a predicate offense for money
laundering but is not an autonomous offense in Brazil; however, a bill awaiting legislative action
contains language that could resolve this gap.
69
British Virgin Islands

The British Virgin Islands (BVI) is a United Kingdom (UK) overseas territory with a population
of approximately 22,000. The economy depends greatly on tourism and its offshore financial
sector. As of September 2010, there were 456,547 active companies, 237 licensed banks and
2,951 mutual funds registered with the BVI Financial Services Commission (FSC). BVIs
unique share structure that does not require a statement of authorized capital as well as the lack
of mandatory filing of ownership, pose significant money laundering risks. Tourism accounts
for 45 percent of the economy and employs the majority of the workforce. Financial services are
very important, however, contributing over half of government revenues. BVI remains
vulnerable to money laundering practices through its drug trafficking trade and the exploitation
of its offshore financial services. BVIs proximity to the U.S. Virgin Islands and the use of the
U.S. dollar for its currency pose risk factors for money laundering. The BVI are a major target
for drug traffickers, who use the area as a gateway to the United States. Drug trafficking in
general is a serious problem.
BVI is a well established center offering accounting, banking and legal services; captive
insurance; company incorporations; mutual funds administration; trust formation; and shipping
registration. The FSC is the sole supervisory authority responsible for the licensing and
supervision of financial institutions under the relevant statutes.
While gaming is prohibited in the Virgin Islands, casinos have been incorporated in the
definition of relevant business under the AML/CFT regime.
All serious crimes approach or list approach to predicate crimes: All crimes approach
NO
Covered entities: Banks; currency exchanges; charities and nonprofit associations; dealers in
autos, yachts, and heavy machinery; dealers in precious metals and stones; and leasing
companies
Covered entities: Banks; currency exchanges; charities and nonprofit associations; dealers
in autos, yachts, and heavy machinery; dealers in precious metals and stones; and leasing
companies
Number of STRs received and time frame: 191 in 2010
70

Assets forfeited: criminally: 0 civilly: 0
With U.S.: YES
BVI is a member of the Caribbean Financial Action Task Force, (CFATF), a Financial Action
Task Force-style regional body. Its most recent mutual evaluation can be found here:
gafic.org/downloadables/mer/Virgin_Islands_3rd_Round_MER_(Final)_English.pdf
Reporting institutions are advised to monitor relevant websites for names of suspected terrorists
and related organizations. No specific guidance has been issued to outline reporting institutions
obligations to freeze funds of designated terrorists and terrorist organizations.
The U.S. and the British Virgin Islands established a Tax Information Exchange Agreement
(TIEA) in 2006. Application of the US - UK mutual legal assistance treaty (MLAT) concerning
the Cayman Islands was extended to the BVI in 1990. The FSC cooperates with foreign
counterparts and law enforcement agencies. In 2000, the Information Assistance (Financial
Services) Act (IAFSA) was enacted to increase the scope of cooperation between the BVIs
regulators and regulators from other countries.
While BVI legislation has strengthened due diligence requirements where a representative is
acting on another persons behalf or when the customer is resident in another country which does
not fully comply with FATF rules, and has extended regulation to money value transfer service
operators these laws are too new to be evaluated. The FSC should increase its staffing in order
to meet the recommended inspection and reporting requirements, especially in light of the new
entities covered under the law. The lack of prosecutions for money laundering and a reported
decline in number of inspections suggests that the FSC should work closely with law
enforcement and other authorities. In addition, while real estate agents, lawyers, other
independent legal advisers, accountants, dealers in precious metals and stones are covered by the
AML/CFT regulations, there appears to be no effective mechanism to ensure compliance with
AML/CFT requirements.
The British Virgin Islands is a United Kingdom (UK) Caribbean overseas territory and cannot
sign or ratify international conventions in its own right. Rather, the UK is responsible for the
BVIs international affairs and may arrange for the ratification of any convention to be extended
to the BVI. The 1988 Drug Convention was extended to the BVI in 1995. The UN Convention
against Corruption was extended to the BVI in 2006. The International Convention for the
Suppression of the Financing of Terrorism and the UN Convention against Transnational
Organized Crime have not yet been extended to the BVI.
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Burma
Burma is not a regional or offshore financial center. Its strategic geographic location, prolific
drug production, and lack of transparency make it an attractive transit country for money
laundering. While its underdeveloped economy is not adequate as a destination to harbor funds,
the low risk of enforcement and prosecution make it appealing to the criminal underground.
Drug trafficking, human trafficking, and public corruption are major sources of illicit proceeds.
Money launderers also exploit the illegal trade in wildlife, gems, and timber, and trade-based
money laundering is of increasing concern.
Burma is second only to Afghanistan in opium production, and is increasingly a source of
methamphetamine and amphetamine type substances. Its long, porous borders are poorly
patrolled. In some remote regions where smuggling is active, ongoing ethnic tensions, and in
some cases armed conflict, impede government territorial control. In other areas, political
arrangements between traffickers and Burmas ruling military government allow organized crime
groups to function with minimal risk of interdiction.
The Government of Burma (GOB) dominates the economy. State-owned enterprises and
military holding companies control a substantial portion of Burmas resources. A move toward
privatization in 2010 transferred significant assets to private parties; however, most new owners
appear to be business associates of the ruling generals, and some are allegedly connected to drug
trafficking.
Corruption is endemic in both business and government. Transparency Internationals 2010
Corruption Perception Index ranked Burma 176 out of 178 countries. This extensive corruption
and overall lack of governmental transparency has stymied the GOBs gestures toward financial
reforms. The GOB enacted several reforms in the past several years to reduce vulnerability to
drug money laundering in the banking sector. However, connections to powerful patrons still
outweigh rule of law, and Burma continues to face significant risk of drug money being funneled
into commercial ventures.
YES
Covered entities: None
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Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

Covered entities: Banks, customs officials, state-owned insurance company and small loans
enterprise, securities exchange, the Andaman Club Resort Hotel (the only licensed money
changer) accountants, the legal and real estate sectors and dealers of precious metals and
stones
With U.S.: NO
Burma is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial Action
Task Force-style regional body. Its most recent evaluation can be found at:
http://www.apgml.org/documents/docs/17/Myanmar%202008.pdf
Burma's financial sector is extremely underdeveloped and most currency is held outside the
formal banking system. The informal economy generates few reliable records, and the GOB
makes no meaningful efforts to ascertain the amount or source of income or value transfers. The
GOBs lack of engagement extends to its financial institutions. Some Burmese financial
institutions may engage in currency transactions related to international narcotics trafficking that
include significant amounts of U.S. currency. However, the absence of publicly available GOB
information on this issue precludes confirmation of such conduct. Burmese law does not contain
any customer due diligence requirements, although some entities follow such procedures under
other, non-AML related legal provisions.
Corruption is pervasive in every level of government. Senior military officials are essentially
above the law and free to engage in a range of activities designed to enrich themselves and
maintain their hold on power. Government workers do not receive a living wage and may seek
bribes as additional compensation. Officials who resist the rampant corruption are impeded by
the militarys control over all civilian authority, including the police. The GOB should end all
policies that facilitate corrupt practices, including strengthening its oversight of the formal
financial sector and implementing a transparent transaction reporting regime. The FIU should
become a fully funded independent agency that functions without interference, and the GOB
should supply adequate resources to administrative and judicial authorities for their enforcement
of government regulations. The GOB should become a party to the UN Convention against
Corruption.
73
Cambodia
Cambodia is neither a regional nor an offshore financial center. Cambodias fledgling anti-
money laundering regime; cash-based, dollarized economy with an active informal banking
system; porous borders; loose oversight of casinos; and limited capacity of the National Bank of
Cambodia to oversee the fast growing financial and banking industries contribute to a significant
money laundering risk.
Cambodia has a significant black market for smuggled goods, including drugs and imported
substances for local production of the methamphetamine ATS. Both licit and illicit transactions,
regardless of size, are frequently done outside of formal financial institutions, and are difficult to
monitor. Proceeds from crime are readily channeled into land, housing, luxury goods or other
forms of property. The majority of real estate transactions are done without a registered real
estate agent, and buyers and sellers determine the price of the property without reference to an
independent valuation system.
Covered entities: Banks; micro-finance institutions; credit cooperatives; security brokerage
firms and insurance companies; leasing companies; exchange offices/money exchangers; real
estate agents; money remittance services; dealers in precious metals, stones and gems; post
office operating payment transactions; lawyers, notaries, accountants, auditors, investment
advisors and asset managers; casinos and gambling institutions; non-governmental
organizations (NGOs) and foundations doing business and raising funds; and any other
institutions or professions designated by the Financial Intelligence Unit to fall within the
scope of the present law
Covered entities: Banks; micro-finance institutions; credit cooperatives; security brokerage
firms and insurance companies; leasing companies; exchange offices/money exchangers; real
estate agents; money remittance services; dealers in precious metals, stones and gems; post
office operating payment transactions; lawyers, notaries, accountants, auditors, investment
advisors and asset managers; casinos and gambling institutions; NGOs and foundations doing
74
business and raising funds; and any other institutions or professions designated by the
Financial Intelligence Unit to fall within the scope of the present law
Number of STRs received and time frame: 96 (January through October 2010)
Number of CTRs received and time frame: 359,599 (January through October 2010)
Prosecutions: 0
Convictions: 0
With U.S.: NO
Cambodia is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial
Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found
here:
http://www.apgml.org/documents/docs/17/Cambodia%20World%20Bank%20DAR%20July%20
07.pdf
The Government of Cambodia (GOC) has not fully implemented its current AML/CFT
legislation, and its list of covered entities is incomplete. The GOC should issue additional
decrees, mandating compliance of designated non-financial businesses and professions with the
reporting requirements established by the AML/CFT law, and provide training to commercial
bankers. Given the high level of corruption in Cambodia, the GOC should also require special
due diligence for domestic politically exposed persons (PEPs). Cambodia does not have, and has
not offered, a safe harbor provision. The government should propose such a provision in the
short term.
By regulation, banks are individually responsible for maintaining and monitoring the list of
designated terrorists or terrorist entities; however, the GOC does not distribute the UN lists.
The GOC should also expand the authorities of the Cambodian Financial Intelligence Unit
(CAFIU). At present, the CAFIU lacks the power to enforce AML/CFT laws. As a result, few
covered entities follow STR reporting guidelines.
While Article 30 of the AML/CFT law provides for the confiscation of property in cases where
someone is found guilty of money laundering as stipulated in the penal code, the law is vague,
and does not describe a system of asset forfeiture. Cambodia should clearly define the system of
asset forfeiture, and establish a regulation to implement the system.
Law enforcement capacity remains quite limited, and is hindered by corruption and a weak
investigative and prosecutorial infrastructure. There have been no money laundering
prosecutions or convictions since 2007, when two suspects were arrested but not convicted.
Elements of the Ministry of Finance, the new Anti-Corruption unit, and the Cambodian National
Police are receiving training on complex financial crimes. While the law enforcement training
plan is long term and progressive, until the GOC fully implements AML/CFT legislation and
addresses corruption, Cambodia will remain a high-risk environment for money laundering
operations.
75
Canada
Money laundering in Canada is primarily associated with drug trafficking and financial crimes,
particularly those related to fraud. With roughly $1.4 billion in trade crossing the United States
and Canadian borders each day, both governments share concerns about illicit cross-border
movements of currency, particularly the proceeds of drug trafficking. Organized criminal groups
are involved in drug trafficking, contraband smuggling, illegal arms sales, migrant smuggling
and white-collar crimes. The Criminal Intelligence Service Canada estimates that over 900
organized crime groups operate in Canada, with the vast majority involved in the illicit drug
trade.
Money laundering generally occurs through the following methods: smuggling; money service
businesses and currency exchanges; casinos; purchase of real estate; wire transfers;
establishment of offshore corporations; credit cards, stored value cards and new payment
methods. Criminals have also used internet payments or gold bullion to move funds.
Casinos now are required to report large disbursements and suspicious transactions. In 2010, the
first year of reporting, 43,752 casino disbursement reports were filed. Alternative remittance
systems, such as hawala, hundi, and chitti are also required to report.
There are no free trade zones or offshore financial institutions.
Legal persons covered: criminally: NO civilly: YES
YES
Covered entities: Banks; credit unions; life insurance companies; trust and loan companies;
brokers/dealers of securities; foreign exchange dealers; money services businesses; sellers
and redeemers of money orders; accountants; real estate brokers; casinos; lawyers; notaries
(in Qubec and British Columbia only) and dealers in precious metals and stones
Covered entities: banks; credit unions; life insurance companies; trust and loan companies;
brokers/dealers of securities; foreign exchange dealers; money services businesses; sellers
and redeemers of money orders; accountants; real estate brokers; casinos; lawyers; notaries
(in Qubec and British Columbia only) and dealers in precious metals and stones
76
Number of STRs received and time frame: 64,240 April 2009 through March 2010
Number of CTRs received and time frame: 6,868,506 April 2009 through March 2010
Prosecutions: 211 April 2005 through March 2006
Convictions: Ten April 2005 through March 2006
Assets forfeited: criminally: $17.5 million civilly: Not available
With U.S.: YES
Canada is a member of the Financial Action Task Force (FATF) as well as the Asia/Pacific
Group on Money Laundering (APG), and is a supporting nation of the Caribbean Financial
Action Task Force (CFATF). Both APG and CFATF are FATF-style regional bodies. Canadas
most recent published mutual evaluation can be found here:
http://www.fatf-
gafi.org/document/58/0,3343,en_32250379_32236963_40199098_1_1_1_1,00.html
Lawyers in several provinces have successfully challenged the applicability of the AML law to
them based upon common law attorney-client privileges, therefore, lawyers are not completely
covered by the AML provisions.
The United States and Canada signed a memorandum of understanding (MOU) in November
2010 to track the movement of illicit currency by sharing data on currency seized at the border.
The MOU will significantly enhance the ability of law enforcement officers in both countries to
investigate and track illicit cash movements and disrupt the flow of funds that support the
activities of criminals and terrorists.
Money laundering offenses have a higher threshold for prosecution and conviction than the
offense of benefiting from the proceeds of crime. Criminals appear willing to forfeit assets and
plead guilty to lesser charges to avoid prosecution under AML and proceeds of crime statutes.
While the law provides sufficient powers to Canadian law enforcement to pursue money
launderers, the budget for relevant law enforcement authorities has not increased; additional
resources could increase the effectiveness of existing laws. Provincial and federal statistics
should be tracked jointly. Appropriately tracking these cases could reveal a more robust rate of
money laundering related convictions.
Canada should continue oversight and increase follow-up of the relatively new AML/CFT
measures within the casino industry; reduce the length of time needed for FINTRAC to prepare
reports used by law enforcement authorities (average number of days for a report dropped from
82 to 68 from 2009-2010); and maintain the monitoring of the money services business registry.
Canada also should continue to ensure its privacy laws do not excessively prohibit provision of
information to domestic and foreign law enforcement that might lead to prosecutions and
convictions.
77
Cayman Islands
The Cayman Islands, a United Kingdom (UK) Caribbean overseas territory is an offshore
financial center. Most money laundering that occurs in the Cayman Islands is primarily related
to fraud and drug trafficking. Due to its status as a zero-tax regime, the Cayman Islands is also
considered attractive to those seeking to evade taxes in their home jurisdiction.
The Cayman Islands is home to a well-developed offshore financial center that provides a wide
range of services, including banking, structured finance, investment funds, various types of
trusts, and company formation and management. As of December 2010, the banking sector had
$1.73 trillion in assets. There were approximately 245 banks, 150 active trust licenses, 738
captive insurance companies, eight money service businesses, and more than 85,000 companies
licensed or registered in the Cayman Islands. According to the Cayman Islands Monetary
Authority (CIMA), at year end 2010, there were approximately 9,400 mutual funds. Shell banks
are prohibited, as are anonymous accounts. Bearer shares can only be issued by exempt
companies and must be immobilized.
Gambling is illegal; and the Cayman Islands do not permit the registration of offshore gaming
entities. There are no free trade zones and the authorities do not see risks from bulk cash
smuggling related to the large number of cruise ships that dock at the island.
UN lists of designated terrorists or terrorist entities distributed to financial institutions: YES
Covered entities: Banks, trust companies, investment funds, fund administrators, insurance
Companies and managers, money service businesses, corporate and trust service providers,
money transmitters, dealers of precious metals and stones, and the real estate industry
Covered entities: Banks, trust companies, investment funds, fund administrators, insurance
Companies and managers, money service businesses, corporate and trust service providers,
money transmitters, dealers of precious metals and stones, and the real estate industry
Prosecutions: Eight 2003 - 2010
78
Convictions: Six 2003 - 2010; only one since 2006

Assets forfeited: criminally: Approximately $6 million civilly: Not available
With U.S.: YES
The Cayman Islands is a member of the Caribbean Financial Action Task Force (CFATF), a
FATF-style regional body. Its most recent mutual evaluation can be found here:
gafic.org/downloadables/mer/Cayman_Islands_3rd_Round_MER_(Final)_English.pdf
While the country has increased both its regulatory and law enforcement staffing, the number of
prosecutions and convictions is extremely low given the vast scale of the countrys financial
sector; only six successful prosecutions for money laundering, and only one in the last four
years.
Private trust companies and individuals who carry on trust businesses or act as trustees are
exempt from licensing requirements and the AML requirements. In addition, the lack of
penalties for failing to report ownership and identity information undermines the effectiveness of
these obligations. This is a problem in particular for an estimated 3,000 unregulated mutual
funds resident in the Cayman Islands. In addition, there appear to be no requirements for
companies, trusts and partnerships to retain records for at least five years.
The Cayman Islands should continue to computerize various registrations, such as those for
mutual funds. There is a need to pay greater attention to the risks and proper supervision of non-
profit organizations.
In January 2010, an anti-corruption law took effect which criminalizes bribery and formalizes
international cooperation. Amendments to the Criminal Justice (International Co-operation) Act
were passed in February 2010. These laws provided measures for investigation, prosecution and
confiscation of the proceeds of all serious crimes and broadened international assistance to
include not only drug trafficking but all serious crimes, including official corruption and other
types of transnational crime.
In 1986, the United States and the United Kingdom signed a Mutual Legal Assistance in
Criminal Matters Treaty (MLAT) concerning the Cayman Islands. By a 1994 exchange of notes,
Article 16 of that treaty has been deemed to authorize asset sharing between the United States
and the Cayman Islands.
The Cayman Islands is a United Kingdom (UK) Caribbean overseas territory and cannot sign or
ratify international conventions in its own right. Rather, the UK is responsible for the Cayman
Islands international affairs and may arrange for the ratification of any Convention to be
extended to the Cayman Islands. The 1988 Drug Convention was extended to the Cayman
Islands in 1995 and is implemented through several laws. The UN Convention against
Corruption and the UN Convention against Transnational Organized Crime have not yet been
extended to the Cayman Islands. However, the full implementation platform for the anti-
corruption convention exists under current Cayman law. A 2002 request for extension of the
International Convention for the Suppression of the Financing of Terrorism to the Cayman
79
Islands has not yet been finalized by the UK, although the provisions of the Convention also are
implemented by domestic laws.
China, Peoples Republic of

China is a major global financial center, with a rapidly growing economy and increased
integration in the international market. The primary sources of criminal proceeds are corruption,
narcotics and human trafficking, smuggling, economic crimes, intellectual property theft,
counterfeit goods, crimes against property, and tax evasion. Money is generally laundered
through bulk cash smuggling, trade-based fraud (over/under pricing of goods, falsified bills of
lading and customs declarations, counterfeit import/export contracts), and both the formal and
underground banking systems. The use of cash-intensive, non-financial sectors such as real
estate has increased, as has the use of e-currency, online exchanges, and the exploitation of
investment vehicles such as forward exchange rate contracts and financial derivatives.
Most money laundering cases currently under investigation involve funds obtained from
corruption and bribery. Proceeds of tax evasion, recycled through offshore companies, often
return to China disguised as foreign investment and, as such, receive tax benefits. Chinese
officials have noted that most acts of corruption in China are closely related to economic
activities that accompany illegal money transfers.
Chinese authorities have observed that the increase in AML efforts by banks has been
accompanied by increased laundering through the underground banking system and trade fraud.
Value transfer via trade goods, including barter exchange, is a common component in Chinese
underground finance. Many Chinese underground trading networks in Africa, Asia, the Middle
East, and the Americas participate in the trade of Chinese-manufactured counterfeit goods.
China has multiple Special Economic Zones (SEZs) and other designated development zones at
the national, regional, and local levels. SEZs include Shenzhen, Shantou, Zhuhai, Xiamen, and
Hainan, along with 14 coastal cities and over 100 designated development zones. It is not a
major offshore financial center.
YES
Covered entities: Banks, securities dealers, insurance companies
80
Covered entities: Banks, securities dealers, and insurance companies

Number of STRs received and time frame: 42,933,226 in 2009
Number of CTRs received and time frame: China does not separate STRs and CTRs
Convictions: 10,674 in 2009
With U.S.: YES
China is a member of the Financial Action Task Force (FATF), as well as the Asia/Pacific Group
on Money Laundering (APG) and the Eurasian Group on Combating Money Laundering and
Terrorist Financing (EAG), both of which are FATF-style regional bodies (FSRB). Its most
recent mutual evaluation can be found here:
The Government of China (GOC) has strengthened the legal framework for its overall
AML/CFT regime, notably by clarifying the suspicious transaction reporting obligations of
Chinese banks and by increasing the number of money laundering investigations, prosecutions,
and convictions. However, even though it is mandatory, the courts do not systematically pursue
the confiscation of criminal proceeds, which undermines any disincentive to commit the crime.
The GOC should ensure that all courts are aware of the mandatory confiscation laws, and ensure
uniform implementation.
Chinas terrorist financing legislation has significant gaps, including the inability to freeze
terrorist assets without delay. China should enact comprehensive terrorism and terrorist
financing legislation and create a mechanism to freeze terrorist assets without delay. China
should also enhance coordination between its financial regulators and law enforcement bodies to
better investigate and prosecute offenders.
Chinese financial regulators have made progress in recent years in applying AML/CFT controls
to Chinas developing financial system; however, enforcement efforts need strengthening to keep
pace with the sophistication and reach of criminal and terrorist networks.
The GOC has become more open to working across borders on money laundering and terrorist
financing investigations. However, U.S. law enforcement agencies note that the GOC has not
cooperated sufficiently on financial investigations and does not provide adequate responses to
requests for financial investigation information. The GOC should expand cooperation with
counterparts in the United States and other countries and pursue international linkages in
AML/CFT efforts more aggressively. U.S. agencies have continued to seek to expand
cooperation with Chinese counterparts on AML/CFT matters and to strengthen both policy- and
operational-level cooperation in this critical area.
81
Colombia
The Government of Colombia (GOC) is a regional leader in the fight against money laundering.
The GOC has a forceful anti-money laundering/counter-terrorist financing (AML/CFT) regime.
However, the laundering of money from Colombias illicit cocaine and heroin trade continues to
penetrate its economy and affect its financial institutions. Both drug and money laundering
organizations use a variety of methods to repatriate their illicit proceeds to Colombia. These
methods include the Black Market Peso Exchange, trade based value transfer, bulk cash
smuggling, reintegro (wire transfers), remittances, smuggled merchandize (contraband) and
more recently, electronic currency and prepaid debit cards.
In addition to drug-related money laundering, laundered funds are also derived from commercial
smuggling for tax and import duty evasion, kidnapping, arms trafficking, and terrorism
connected to violent, illegally-armed groups and guerrilla organizations. Further, money
laundering is carried out to a large extent by U.S. Government-designated terrorist organizations.
Criminal elements have used the banking sector, including exchange houses, to launder money.
Money laundering also has occurred via trade and the non-bank financial system, especially
related to transactions that support the informal or underground economy. The trade of
counterfeit items in violation of intellectual property rights is an ever increasing method to
launder illicit proceeds. Casinos, free trade zones and the postal money order market in
Colombia present opportunities for criminals to take advantage of inadequate regulation and
transparency. Although corruption of government officials remains a problem, its scope has
decreased significantly in recent years.
YES
Covered entities: Banks, stock exchanges and brokers, mutual funds, investment funds,
export and import intermediaries, credit unions, wire remitters, money exchange houses,
public agencies, notaries, casinos, lottery operators, car dealers, and foreign currency traders
Enhanced due diligence procedures for PEPs: Foreign: Not available Domestic: Not
available
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Covered entities: Banks, stock exchanges and brokers, mutual funds, investment funds,
export and import intermediaries, credit unions, wire remitters, money exchange houses,
public agencies, notaries, casinos, lottery operators, car dealers, and foreign currency traders
Prosecutions: 408 investigations and/or prosecutions in 2009
Assets forfeited: criminally: Approximately $1.3 million in 2009 civilly: Not available
With U.S.: YES
Colombia is a member of the Financial Action Task Force (FATF) of South America
(GAFISUD) a FATF-style regional body. Its most recent mutual evaluation can be found here:
http://www.gafisud.info/home.htm
In the Black Market Peso Exchange (BMPE), goods from abroad, particularly the United States,
are bought with drug dollars. Many of the goods are either smuggled into Colombia or brought
directly into Colombias customs warehouses, thus avoiding various taxes, tariffs and legal
customs duties. In other trade-based money laundering schemes, goods are over-or-under
invoiced to transfer value. Reportedly, evasion of the normal customs charges is frequently
facilitated by the drug and money laundering groups corrupting Colombian oversight authorities.
To help combat BMPE and other financial crimes, in 2005, a Colombian-based trade
transparency unit (TTU) was created by U.S. Immigration and Customs Enforcement to analyze,
identify and investigate companies and individuals involved in trade-based money laundering
activities between Colombia and the United States. In the past year, the Colombian TTU has
worked to enhance the quality and quantity of trade data shared, expanding its investigative
capacity.
While the Colombian financial system has banking controls and governmental regulatory
processes in place, it is reported that drug and money laundering groups have influenced high
level bank officials in order to circumvent both established anti-money laundering controls and
government regulations. Official corruption has also aided money laundering and terrorist
financing in geographic areas controlled by the Revolutionary Armed Forces of Colombia
(FARC).
According to the Prosecutor Generals Office, 236 people were arrested in 2009 for money laundering
crimes connected to drug trafficking, terrorism, and other felonies. The GOC cooperates extensively with
U.S. law enforcement agencies to identify, target and prosecute groups and individuals engaged in
financial and drug crimes. Colombia is working with other member countries of GAFISUD to
develop a common PEP standard and to share its PEP list with other financial intelligence units.
The Colombian government regularly carries out asset seizure operations against a myriad of
drug trafficking and other criminal organizations throughout Colombia. Freezing assets is very
quick and efficient under Colombian law, while forfeiture can take between 1-3 years. The
biggest difficulty in Colombia is administering seized assets. The National Drug Directorate
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(DNE) as a legal institution lacks the technical expertise to administer seized assets. The
proceeds from asset seizures or forfeitures are by law used to fund various projects, such as the
construction of new high-security prisons, low-income government housing, or specific
educational initiatives. However, many assets have lost their value over time due to poor
administration, and the National Drug Directorate (DNE) has been unable to conduct studies to
evaluate and monitor the impact of its efforts.
Colombian law is unclear on the governments authority to block assets of individuals and
entities on the UN 1267 Sanctions Committee consolidated list. In addition to the UN lists,
banks also monitor the Office of Foreign Assets Controls publication of Specially Designated
Narcotics Traffickers, pursuant to Executive Order (EO) 12978, and the Foreign Narcotics
Kingpin Designation Act, and Specially Designated Global Terrorists, pursuant to E.O. 13224.
Costa Rica
While Costa Rica is not a major regional financial center, it remains vulnerable to money
laundering and other financial crimes. Illicit proceeds from fraud, trafficking in persons, arms,
narcotics trafficking (mainly cocaine), and corruption are laundered in Costa Rica. To a limited
extent, money laundering/terrorist financing occurs across the formal financial sector, within the
free trade zones (FTZs), and in the non-bank financial system. Costa Rica has 33 FTZs, used by
approximately 270 companies. In addition, Costa Rica has a sizeable internet gaming industry
which in practice is almost unregulated. While local criminals are active, the majority of
laundered criminal proceeds derive from foreign criminal activity. Costa Rica does not have a
significant market for smuggled goods, however, criminal organizations involved in fraud,
trafficking in persons, arms, narcotics trafficking, and corruption are known to utilize the
international trade system to move and launder their criminal proceeds.
The Government of Costa Rica (GOCR) reports that Costa Rica is primarily used as a bridge to
send funds to and from other jurisdictions using, in many cases, companies or banks established
in offshore financial centers. Nicaraguans residing in Costa Rica send approximately $200
million in remittances annually to family members in their home country, much of which is sent
via unlicensed money remitters. These unregulated businesses are a significant risk for money
laundering and a potential mechanism for terrorist financing.
Costa Rica has demonstrated a genuine commitment to strengthening its anti-money
laundering/counter-terrorist financing (AML/CFT) regime. As a result of a law passed in 2009,
in 2010 Costa Rica continued implementing new regulations directed at combating money
laundering, terrorist financing, and organized crime. Costa Rica also created a new National
Anti-Drug Commissioner position that is responsible for monitoring and evaluating the GOCRs
policies and plans to combat money laundering.
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YES
Covered entities: Banks and savings and loan cooperatives; pension funds; money
exchangers or remitters; investment fund and safekeeping companies; credit institutions;
issuers, sellers or redeemers of travelers checks and postal money orders; and securities
dealers
Covered entities: Banks and savings and loan cooperatives; pension funds; money
exchangers or remitters; fiduciary trust, investment fund and safekeeping companies, and
asset managers; credit institutions; issuers, sellers or redeemers of travelers checks and postal
money orders; securities dealers; and real estate agents
Number of STRs received and time frame: 304 from January to December 2010
Convictions: Ten - January through October 2010
Assets forfeited: criminally: $9,693,214.00 in FY2010 civilly: Not applicable
With U.S.: YES
In December 2010, the Financial Action Task Force of South America (GAFISUD) admitted
Costa Rica as a member, formally marking its departure from the Caribbean Financial Action
Task Force (CFATF). Its most recent mutual evaluation can be found here: http://www.cfatf-
gafic.org/mutual-evaluation-reports.html
Money laundering cannot be charged as an additional offense to the predicate crime (e.g., a drug
dealer who is convicted on drug charges cannot also be prosecuted for laundering the drug
proceeds). In addition, criminal liability does not extend to legal persons.
There are over 250 Internet sports book companies registered to operate in Costa Rica. The
industry transacts approximately $12 billion annually and employs 10,000 people. This industry
in practice is almost unregulated. The FIU reports that Costa Rican attorneys oftentimes conduct
cash purchases of real estate on behalf of persons located in the U.S. The FIU has had
significant difficulties verifying the identity and source of funds for those purchases.
The FIU does not directly receive cash transaction reports (CTRs). Each supervisory entity that
receives CTRs holds them unless it determines that further analysis is required or the FIU
requests the reports.
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Costa Rica fully cooperates with appropriate United States government law enforcement
agencies investigating financial crimes related to narcotics and other crimes. Additionally, Costa
Rica has a tax information exchange agreement with the U.S.
Law 8719 authorizes the FIU to administratively freeze assets or accounts that are subject to an
ongoing money laundering or narcotics investigation by the host government authority without a
prior Court order (a judicial order must be obtained within 5 days after the seizure). This
provision was used in several money laundering cases involving bulk cash smuggling during
2010. Although the GOCR enacted a provision to allow for civil forfeitures in 2009, no case has
been pursued by prosecutors. The prosecutors state they have been reluctant to try cases under
this law, because they fear these cases will not hold up in court. Based on the non-use of this
provision, it is unclear whether the GOCR will assist other countries in obtaining non-
conviction-based forfeiture.
Several pieces of real property were identified and frozen by the U.S. Office of Foreign Asset
Control (OFAC) owned by a Colombian National that resides in Costa Rica and uses his farms to
launder funds for the FARC. This subject and his property were named as a second tier in the
King-Pin Act with money laundering ties to the FARC. Shortly after the OFAC report was
publicized in Costa Rica the subject fled Costa Rica and returned to Colombia.
Cyprus
Cyprus has been divided since 1974. Since then, the Republic of Cyprus (ROC) has controlled
the southern two-thirds of the country, while a Turkish Cypriot administration calling itself the
Turkish Republic of Northern Cyprus (TRNC) controls the northern part. Only Turkey
recognizes the TRNC. The U.S. Government recognizes only the Republic of Cyprus. This
section of the report discusses the area controlled by the ROC. A separate section on the area
administered by Turkish Cypriots follows at the end.
Cyprus is a major regional financial center with a robust financial services industry and a
significant amount of nonresident businesses. A number of factors have contributed to the
development of Cyprus as a financial center: a preferential tax regime; double tax treaties with
44 countries (including the United States, several European Union (EU) nations, and former
Soviet Union nations); a sophisticated telecommunications infrastructure; and EU membership.
In 2003, Cyprus introduced tax and legislative changes effectively abolishing all legal and
substantive distinctions between domestic and offshore companies. Cyprus has also lifted the
prohibition from doing business domestically and companies formerly classified as offshore are
now free to engage in business locally. International business companies are allowed to be
registered in Cyprus but their ultimate beneficial ownership must be disclosed to the authorities.
There are over 220,000 companies registered in Cyprus, many of which are non-resident. The
same disclosure, reporting, tax and other laws and regulations apply equally to all registered
companies.
Like any financial center, Cyprus remains vulnerable to money laundering and illicit finance
activities. Simple financial crime constitutes the biggest threat for domestic money laundering
and tax evasion internationally. There is no significant black market for smuggled goods in
Cyprus. What little black market trade exists is usually related to small scale transactions,
typically involving fake clothing, pirated CDs/DVDs and cigarettes moved across the UN-
patrolled buffer zone separating the ROC from the TRNC.
Cyprus has three free trade zones (FTZs). Two, located in the main seaports of Limassol and
Larnaca, are used only for transit trade, while the third, located near the international airport in
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Larnaca, can also be used for repacking and reprocessing. These areas are treated as being
outside normal EU customs territory. Consequently, non-EU goods placed in FTZs are not
subject to any import duties, VAT or excise tax. FTZs are governed under the provisions of
relevant EU and Cypriot legislation. The Department of Customs has jurisdiction over all three
areas and can impose restrictions or prohibitions on certain activities, depending on the nature of
the goods.
YES
Covered entities: Banks, credit institutions, securities and insurance firms, money transfer
services, international financial services and trust companies, auditors, tax advisors,
accountants, real estate agents, dealers in precious stones and gems, and in certain cases,
attorneys
Covered entities: Banks; credit institutions; issuers or servicers of credit or payment cards,
and travelers checks; financial leasing companies; securities and insurance brokers and
firms; money transfer or brokerage services; financial advisors, international financial service
providers, and trust and safekeeping companies; auditors, tax advisors, and accountants; real
estate agents; dealers in precious stones and gems; and in certain cases, attorneys
Number of STRs received and time frame: 428 in2009
Assets forfeited: criminally: Euros 5.5 million (approximately $7.1 million in 2009
civilly: Not applicable
With U.S.: YES
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Cyprus is a member of the Council of Europes Committee of Experts on the Evaluation of Anti-
Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a Financial
here:
http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Cyprus_en.asp
There are no legal issues hampering Cyprus ability to assist foreign governments in mutual legal
assistance requests. Cypriot law allows MOKAS, the Cypriot financial intelligence unit (FIU) to
share information with other FIUs without benefit of a memorandum of understanding (MOU).
Cyprus has enacted comprehensive legislation and established systems for identifying, tracing,
freezing, seizing, and forfeiting narcotics-related assets and assets derived from other serious
crimes. Like most EU countries, though, Cyprus has no provisions allowing civil forfeiture of
assets without a criminal case. The police and the FIU are responsible for tracing, seizing and
freezing assets and they fully enforce existing legislation. Cyprus has an independent national
system and mechanism for freezing terrorist assets, and has also engaged in bilateral and
multilateral negotiations with other governments to enhance its asset tracking and seizure
system.
Amending legislation that came into force in June 2010 strengthened the 2007 Law for the
Prevention and Suppression of Money Laundering Activities (LPSMLA), e.g., by requiring a
timely response to FIU enquiries, and criminalizing the provision of false or misleading
information.
Area Administered by Turkish Cypriots
The Turkish Cypriot community continues to lack the legal and institutional framework
necessary to provide effective protection against the risks of money laundering, although
significant progress has been made in recent years with the passage of laws better regulating
the onshore and offshore banking sectors and casinos. There are currently 22 domestic banks in
the area administered by Turkish Cypriots and Internet banking is available. The offshore sector
consists of 13 banks and 34 companies. The offshore banking sector remains a concern. The
offshore banks may not conduct business with residents of the area administered by Turkish
Cypriots and may not deal in cash. Under revised laws passed in 2008, the Central Bank
took over the regulation and licensing of offshore banks from the Ministry of Finance thereby
improving oversight. The Central Bank audits the offshore entities, which must submit an
annual report on their activities. The new law permits only banks previously licensed by
Organization for Economic Co-operation and Development (OECD)-member nations or Turkey
to operate an offshore branch in northern Cyprus. Despite the 2009 promulgation of more strict
laws, the 23 operating casinos remain essentially unregulated due to the lack of an
enforcement or investigative mechanism by the casino regulatory body and efforts to de-
criminalize any failure by casinos to follow KYC regulations.
The Turkish Cypriot community is not part of any FSRB and thus is not subject to normal peer
evaluations. Turkish Cypriot authorities have taken steps to address the risk of financial crime,
including enacting an "anti-money laundering law (AMLL)" for the area and formally
establishing an FIU equivalent. The law aims to reduce the number of cash transactions in the
area administered by Turkish Cypriots as well as improve the tracking of any transactions above
10,000 Euros (approximately $13,000). Under the "AMLL," banks must report to the Central
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Bank and the Money and Exchange Bureau any electronic transfers of funds in excess of
$100,000. Such reports must include information identifying the person transferring the money,
the source of the money, and its destination. Under the law, banks, nonbank financial
institutions, and foreign exchange dealers must report all currency transactions over 10,000
Euros (approximately $13,000) and suspicious transactions in any amount to the Money and
Exchange Bureau. Banks must follow a KYC policy and require customer identification.
Banks and other designated entities also must submit STRs to a five-member Anti-Money
Laundering Committee which decides whether to refer suspicious cases to the "police" and the
attorney generals office for further investigation. The five-member committee is composed of
representatives of the police, customs, the Central Bank, and the Ministry of Economy.
According to the Turkish Cypriot authorities, 102 STRs were received by the FIU in 2009.
Covered entities: Banks, cooperative credit societies, finance companies, leasing/factoring
companies, portfolio management firms, investment firms, jewelers, foreign exchange
bureaus, real estate agents, retailers of games of chance, lottery authority, accountants,
insurance firms, cargo firms, antique dealers, auto dealers, lawyers
Covered entities: Banks, cooperative credit societies, finance companies, leasing/factoring
companies, portfolio management firms, investment firms, jewelers, foreign exchange
bureaus, real estate agents, retailers of games of chance, lottery authority, accountants,
insurance firms, cargo firms, antique dealers, auto dealers, lawyers
Prosecutions: None
Convictions: None
Assets forfeited: criminally: None civilly: None
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With U.S.: NO
With other governments/jurisdictions: YES, with Turkey
The area administered by Turkish Cypriots is not a member of any Financial Action Task Force
(FATF)-style regional body.
The Turkish Cypriot "AMLL" provides better banking regulations than were in force previously,
but without ongoing enforcement its objectives cannot be met. A major weakness continues to
be the many casinos, where a lack of resources and expertise leave the area essentially
unregulated, and therefore, especially vulnerable to money laundering abuse. Amendments that
would essentially decriminalize failure to implement KYC rules are currently being considered
to a law to regulate potential AML activity in casinos. The largely unregulated consumer
finance institutions and currency exchange houses are also of concern. The Turkish Cypriot
authorities should continue efforts to enhance the FIU, and adopt and implement a strong
licensing and regulatory environment for all obligated institutions, in particular casinos and
money exchange houses. Turkish Cypriot authorities should stringently enforce the cross-border
currency declaration requirements. Turkish Cypriot authorities should continue steps to enhance
the expertise of members of the enforcement, regulatory, and financial communities with an
objective of better regulatory guidance, more efficient STR reporting, better analysis of reports,
and enhanced use of legal tools available for prosecutions.
Dominican Republic
In spite of having the largest economy in the Caribbean, the Dominican Republic (DR) is not a
major regional financial center. The DR continues to be a major transit point for the
transshipment of illicit narcotics destined for the United States and Europe. The existence of six
international airports, six major seaports, and a poorly controlled frontier with Haiti present the
authorities with serious challenges. The existence of corruption within the government and the
private sector, an organized crime presence (primarily illicit trafficking in narcotics and persons),
a fragile economy and a large informal economy make the DR vulnerable to money laundering
and terrorist financing threats. The major sources of laundered proceeds stem from illicit
trafficking activities, tax evasion and fraudulent financial activity, particularly transactions with
forged credit cards.
The DR is a major bulk cash smuggling hub. The smuggling of bulk cash by couriers and the
use of wire transfer remittances are the primary methods for moving illicit funds from the United
States into the DR. Once in the DR, currency exchange houses, money remittance companies,
real estate and construction companies, and casinos are commonly used to facilitate the
laundering of illicit funds. The lack of a single recognized financial intelligence unit exacerbates
the problem, and the proposed creation of an offshore financial center may worsen the DRs
vulnerability to money laundering.
There is a significant market for illicit or smuggled goods in the Dominican Republic; the
funding sources are unclear, as is the destination of the proceeds. Authorities say the under-
invoicing of imports and exports by Dominican Republic businessmen is still a relatively
common practice. The primary goal for businessmen who engage in such activity is reportedly
to avoid taxes and customs fees. Customs fraud and invoice manipulation are also found in
regional value transfer schemes.
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THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.? YES
YES
Covered entities: Banks, currency exchange houses, stockbrokers, securities brokers, cashers
of checks or other types of negotiable instruments, issuers/sellers/cashers of travelers checks
or money orders, credit and debit card companies, remittance companies, offshore financial
service providers, casinos, real estate agents, automobile dealerships, insurance companies,
and certain commercial entities such as those dealing in firearms and precious metals
Covered entities: Banks, agricultural credit institutions, money exchangers, notaries, gaming
centers, and securities dealers
Number of STRs received and time frame: 45 from January to August 2010
Number of CTRs received and time frame: 138 in 2009
Prosecutions: 4 from January 2009 to October 2010
Convictions: 0
With U.S.: YES
Dominican Republic is a member of the Caribbean Financial Action Task Force (CFATF), a
be found here: http://www.cfatf-gafic.org/
ENFORCEMENT AND IMPLEMENTATION ISUES AND COMMENTS:
Limited resources hamper the Government of the Dominican Republics (GODR) ability to
enforce the anti-money laundering (AML) regulations. Institutions and personnel lack the
training and capacity to fully enforce the law and its attendant regulations. Earlier resistance in
the judiciary and among prosecutors to applying AML has evaporated, and authorities effectively
apply the AML and regulations when able to gather proper evidence. The lack of data and
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systematic study make it difficult for the Federal Police to identify trends in money laundering.
The system of asset forfeiture is largely ineffective.
The AML law excludes from the list of covered entities dealers of art, antiques, and other high-
valued consumer goods; entities dealing with jewelry and precious metals; and attorneys,
financial management firms and travel agencies. These entities are not required to maintain
customer information or report suspicious activity. Additionally, accountants and auto dealers
are excluded from the STR requirement. PEPs are addressed in a circular issued by the
Superintendency of Banks and in force since September 7, 2010; while this is a step forward, the
circular does not address all elements in the international standards and does not apply to all
pertinent entities. Covered non-bank businesses and professions are to be inspected by the Tax
Authority. However, in practice, such inspections rarely occur.
The decision to replace the UIF financial intelligence unit (FIU), which became a member of the
Egmont Group in 2000, with the Financial Analysis Unit (UAF) caused the Dominican Republic
to lose its Egmont membership. Although the UAF is now recognized as the GODRs financial
intelligence unit, it appears there is still confusion among obligated entities regarding their
reporting requirements. Further confounding the duality of FIU functions in the Dominican
Republic is the proposed creation of an offshore financial center with its own agency equivalent
to an FIU.
In December 2008, the GODR passed law 480/08 allowing the creation of International
Financial Zones (IFZs) where the full range of financial services can be conducted separately
from traditional monetary, banking and financial regulatory oversight. Sections of Law 480/08
would allow the IFZs to have their own regulatory and supervisory authority, independent from
that of the domestic financial system. This Law creates a new entity called the Financial
Investigations Department (DIF) created within the NCIFZ. The creation of the DIF within the
NCIFZ, with specified roles, gives such a unit the same functions as the UAF. This situation is
unacceptable, because two FIUs cannot coexist within a jurisdiction. Law 480/08 has not been
implemented nor have any IFZs been established. Members of the Dominican Congress are
trying to amend Law 480/08 to correct this risk. The Dominican Republic has approximately 50
free trade zone parks, focused on textiles, tobacco, small electric devices, and medical and
pharmaceutical products.
The GODR should bolster the operational capacity of the UAF, which is the single, unified FIU.
The UAF should have budgetary independence. There should be enhanced supervision of money
service businesses. Authorities should identify, investigate and prosecute organized criminal
groups involved with bulk cash smuggling and trade-based money laundering. The GODR
should not establish International Financial Zones, which will greatly increase the risk of all-
source money laundering. Specific steps should be taken to combat corruption within both
government and industry.
France
France remains an attractive venue for money laundering because of its sizable economy,
political stability, and sophisticated financial system. Narcotics trafficking, human trafficking,
smuggling, and other crimes associated with organized crime are among its vulnerabilities.
France can designate portions of its customs territory as free trade zones and free warehouses in
return for commitments in favor of employment. France has taken advantage of these
regulations in several specific instances. The French Customs Service administers these zones.
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YES
Covered entities: Banks, credit institutions, money-issuing institutions, investment firms,
money exchangers, investment management companies, mutual insurers and benefit
institutions, insurance intermediaries, insurance dealers, notaries, receivers and trustees in
bankruptcy, financial investment advisors, real estate brokers, chartered accountants,
auditors, dealers in high-value goods, auctioneers and auction houses, bailiffs, lawyers,
participants in stock exchange settlement and delivery, commercial registered office
providers, gaming centers, companies involved in sports bets and horse-racing tips, and
casinos
Covered entities: Banks, credit institutions, money-issuing institutions, investment firms,
money exchangers, investment management companies, mutual insurers and benefit
institutions, insurance brokers and intermediaries, notaries, receivers and trustees in
bankruptcy, financial investment advisors, real estate brokers, chartered accountants,
auditors, dealers in high-value goods, auctioneers and auction houses, bailiffs, lawyers,
participants to stock exchange settlement and delivery and commercial registered office
providers, gaming centers, companies involved in sports bets and horse-racing tips, and
casinos
With U.S.: YES
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France is a member of the Financial Action Task Force (FATF), and is a Cooperating and
Supporting Nation to the Caribbean Financial Action Task Force (CFATF) and an Observer to
the Financial Action Task Force of South America (GAFISUD), two FATF-style regional
bodies. The International Monetary Fund (IMF) prepared a Report on the Observance of
Standards and Codes. This report can be found here:
http://www.imf.org/external/np/fsap/fsap.asp# . France was evaluated by the FATF in 2010;
once finalized the evaluation report may be found here: http://www.fatf-
gafi.org/infobycountry/0,3380,en_32250379_32236963_1_1_1_1_1,00.html
France applies the 2006/70/CE European Union (EU) directive by which politically exposed
persons from the EU states may benefit from simplified vigilance procedures, but only in a
limited number of cases.
France and the United States have exchanged large amounts of data in connection with money
laundering and terrorist financing.
France does not have the capacity to share forfeited assets with other jurisdictions.
The Government of France (GOF) has established a comprehensive anti-money
laundering/counter-terrorist financing (AML/CFT) regime and is an active partner in
international efforts to control money laundering and the financing of terrorism. France should
continue its active participation in international organizations and its outreach to lower-capacity
recipient countries to combat the domestic and global threats of money laundering and terrorist
financing.
Germany
Germany is one of the largest financial centers in Europe. Although not a major drug producing
country, Germany continues to be a consumer and a major transit hub for narcotics. Organized
criminal groups involved in drug trafficking and other illegal activities are a significant source of
money laundering in Germany. Trends in money laundering in Germany cited in 2009 include
trade in CO 2 emission certificates, cash and gold transactions, and commercial websites that did
not ship goods after receiving payment. Germany is not an offshore financial center. Free Trade
Zones of control type I exist in Bremerhaven, Cuxhaven, and Hamburg. Deggendorf and
Duisburg are control type II Free Trade Zones (unfenced inland ports).
All serious crimes approach or list approach to predicate crimes: Both
YES
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Covered entities: Credit institutions, financial services institutions, financial enterprises,
insurance companies, insurance intermediaries, investment companies, lawyers, legal
advisers, auditors, chartered accountants, tax advisers and tax agents, trust or company
service providers, real estate agents, casinos, persons trading in goods
Covered entities: Credit institutions, financial services institutions, financial enterprises,
insurance companies, insurance intermediaries, investment companies, lawyers, legal
advisers, auditors, chartered accountants, tax advisers and tax agents, trust or company
service providers, real estate agents, casinos, persons trading in goods
With U.S.: YES
Germany is a member of the Financial Action Task Force. Its most recent mutual evaluation can
be found here: http://www.fatf-gafi.org/dataoecd/44/19/44886008.pdf
In 2009, suspicious transaction reports increased 23% compared to 2008. The increase mostly
comes from an increased number of "financial agents," i.e., persons who are solicited to make
their private accounts available for money laundering transactions. Authorities confirmed the
suspicion of a criminal act in about half of the reports (46%). While Germany has no automatic
CTR requirement, large currency transactions frequently trigger a report.
Tipping off is a criminal offense only if it is committed with the intent to support money
laundering or obstruct justice and applies only to previously-filed reports. Otherwise, it is an
administrative offense that carries a fine of up to 50,000 (approximately $64,900) under the
Money Laundering Act. Legal persons are only covered by the Administrative Offenses Act,
and are not criminally liable under the Criminal Code.
In July 2010, Germany banned the Frankfurt-based Foundation for Human Rights and Freedoms
and Humanitarian Relief (IHH) because it knowingly and deliberately supports organizations
that either are under Hamas control or support Hamas themselves. According to the German
Interior Ministry, the German-based IHH, which ostensibly split from the Turkish IHH, funneled
money to Hamas.
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The numbers of prosecutions and convictions included in this report only reflect cases in which
the money laundering violation carried the highest penalty of all the crimes of which the offender
was convicted. A trial continued in 2010 against seven persons accused of laundering money
from cocaine sales throughout Europe by transporting it to Lebanon. According to the press, in
May 2008 customs officers found 8.7 million (approximately $11.3 million) hidden in luggage
at Frankfurt Airport. A police search of the subject men's apartment unearthed an additional
500,000 (approximately $649,300). Additional arrests were made in October 2009.
Germany has no statistics on assets forfeited in criminal money laundering cases, as money
laundering is usually only one of the charges leading to conviction. Assets can be forfeited as
part of a criminal trial or through administrative procedures such as claiming back taxes.
Germany has signed, but not yet ratified, the UN Convention against Corruption.
Greece
Greece is considered to be a regional financial center in the developing Balkans, as well as a
bridge between Europe and the Middle East. Official corruption, the presence of organized
crime, and a large shadow economy make the country vulnerable to money laundering and
terrorist financing. Greek law enforcement proceedings indicate that Greece is vulnerable to
narcotics trafficking, trafficking in persons and illegal immigration, prostitution, smuggling of
cigarettes and other contraband, serious fraud or theft, illicit gaming activities, and large scale
tax evasion. Anecdotal evidence of illicit transactions suggests an increase in financial crimes in
the past few years and that criminal organizations (some with links to terrorist groups)
increasingly are trying to use the Greek banking system to launder illicit proceeds. Criminally-
derived proceeds historically are most commonly invested in real estate, the lottery, and the stock
market. Criminal organizations from southeastern Europe and the Balkan region are responsible
for a large percentage of the crime that generates illicit funds. The widespread use of cash
facilitates a gray economy as well as tax evasion, though as part of Greeces three-year 110
billion (approximately $143 billion) European Union (EU)-IMF program, the government is
trying to crack down on both trends. Due to the large informal economy estimated by the
Organization for Economic Co-operation and Development and others to be between 25 and 37
percent of GDP it is difficult to determine the value of goods smuggled into the country,
including whether any of the smuggled goods are funded by narcotic or other illicit proceeds.
There is increasing evidence that domestic terrorist groups are involved with drug trafficking.
AMOUNTS OF U.S. CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN
All serious crimes approach or list approach to predicate crimes: A combination of a
list of predicate offenses and a threshold approach
YES
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here: http://www.state.gov/s/ct/rls/crt/.
Covered entities: Banks; savings banks, and cooperative banks; credit companies, money
remitters, financial leasing and factoring companies, bureaux de change, and postal
companies; stock brokers, investment services firms, and collective and mutual funds; life
insurance companies and insurance intermediaries; accountants, auditors, and audit firms;
tax consultants, tax experts and related firms; real estate agents and companies; casinos
(including internet casinos) and entities engaging in gaming activities; auction houses; and
dealers in high value goods and auctioneers; notaries and lawyers
Covered entities: Banks; savings banks, and cooperative banks; credit companies, money
remitters, financial leasing and factoring companies, bureaux de change, and postal
companies; stock brokers, investment services firms, and collective and mutual funds; life
insurance companies and insurance intermediaries; accountants, auditors, and audit firms;
tax consultants, tax experts and related firms; real estate agents and companies; casinos
(including internet casinos) and entities engaging in gaming activities; auction houses; and
dealers in high value goods and auctioneers; notaries and lawyers
Number of STRs received and time frame: 2,392 through December 28, 2010
Prosecutions: 42 in 2008; more recent data not available
Convictions: 34 in 2008; 20 through June 2009
Assets forfeited: criminally: Not available civilly: Not Applicable
With U.S.: YES
Greece is a member of the Financial Action Task Force (FATF). Its most recent mutual
evaluation can be found here: http://www.fatf-
Greece ratified the United Nations Convention against Transnational Organized Crime in August
2010, and amended its anti-money laundering/countering the financing of terrorism (AML/CFT)
law to adequately criminalize and widen the scope of the terrorist financing offense. The
Government of Greece (GOG) also improved the supervisory capacity of its key supervisors.
Despite continued improvements in Greeces AML/CFT regime, a number of deficiencies
remain, and Greece continues to be subject to enhanced follow-up by the FATF.
The GOG has been working to improve the effectiveness of the Greek financial intelligence unit;
however, deficiencies pertaining to staffing and information technology remain. While the
Greek authorities have hired more staff and ensured that STR analysis is carried out only by full-
time FIU staff, the total number of employees still appears insufficient to carry out the extensive
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functions with which the FIU is tasked. The GOG should make available adequate human and
financial resources to ensure the FIU is able to fulfill its responsibilities, ensure its powers are in-
line with the international standards related to a financial intelligence unit, and ensure its
technical and data management systems and capacities support its functions.
Greece should ensure that its confiscation regime is more effectively implemented and used.
While the 2008 AML/CFT law contains provisions allowing civil asset forfeiture, Greek
authorities advise it is not practical to launch civil procedures and currently do not do so. The
government also should develop an arrangement for the sharing of seized assets with third party
jurisdictions that assist in the conduct of investigations.
Although the law provides for the freezing, seizure and confiscation of terrorist assets, Greece
has a limited ability to freeze funds in accordance with UNSCR listings of designated terrorists
outside of the EU listing system. In the absence of a comprehensive listing and freezing regime,
Greece uses an administrative procedure for freezing assets of suspected terrorists designated as
such domestically or upon request from a foreign authority. While the GOG advises it is not
necessary to open a criminal investigation to use this procedure, it is not clear how quickly it
works, and whether all supervised entities are complying. The GOG does not provide guidance
to financial institutions and designated non-financial businesses and professions on freezing
assets without delay, and does not monitor for compliance. In July 2010 the Bank of Greece
introduced sanctions for credit and financial institutions for failure to promptly apply freezing
requests or respond without delay to such requests. The GOG advises it is in the process of
drafting legislation that would introduce a comprehensive system for suspected terrorists
designation and listing, and asset freezing in accordance with UNSCRs 1267 and 1373.
While Greece has made positive strides in the supervision area, particularly with its recent move
to transfer supervisory powers over the insurance sector to the Bank of Greece, a shortage of
personnel at the Hellenic Capital Markets Commission (which supervises securities firms,
brokers, other financial intermediaries, and clearing houses) remains and continues to challenge
its effectiveness. In addition, it is not clear whether the Ministry of Justice has enough resources
available to deal with ML or TF related cases.
The GOG should adopt regulations to report large currency transactions and explicitly abolish
company-issued bearer shares. It should also ensure uniform enforcement of its cross-border
currency reporting requirements and take further steps to deter the smuggling of currency across
its borders. Greece also should ensure that companies operating within its free trade zones are
subject to the same AML/CFT requirements and customer due diligence provisions as other
sectors and work steadfastly to bring charitable and nonprofit organizations under the AML/CFT
regime.
Guatemala
Guatemala is not considered a regional financial center. It continues to be a transshipment route
for South American cocaine and heroin destined for the United States and for returning cash to
South America. Open source reports suggest that the narcotics trade is increasingly linked to
arms trafficking.
Historically weak law enforcement and judiciary systems coupled with endemic corruption and
increasing organized crime activity contribute to a favorable climate for significant money
laundering in Guatemala. According to law enforcement agencies, narcotics trafficking and
corruption are the primary sources of money laundered in Guatemala; however, the laundering of
proceeds from other illicit activities, such as human trafficking, contraband, kidnapping, tax
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evasion, and vehicle theft, is substantial. There is no indication of terrorist financing activities.
Guatemalas geographic location makes it an ideal haven for transnational organized crime
groups, including human and drug trafficking organizations. The Central America Four
Agreement between El Salvador, Guatemala, Honduras, and Nicaragua allows for free
movement of the citizens of these countries across their respective borders without passing
through immigration or customs inspection. As such, the agreement represents a vulnerability to
each country for the cross-border movement of contraband and illicit proceeds of crime.
There are free trade zones operating in the country. There are no reported hawala or other
similar alternative remittance systems operating in Guatemala. A significant number of
remittances are transferred through banks and appear to pose little risk for money laundering.
YES
Covered entities: Banks; finance and leasing companies; credit card cooperatives, issuers, or
payment agents; stock brokers; insurance companies; money remitters and exchanges;
pawnbrokers; notaries and accountants; tax advisors and lawyers; casinos, raffles and games
of chance; dealers in motor vehicles, precious metals and stones, and art and antiquities; and
real estate agents
Covered entities: Banks; finance and leasing companies; credit card cooperatives, issuers, or
payment agents; stock brokers; insurance companies; money remitters and exchanges;
pawnbrokers; notaries and accountants; tax advisors and lawyers; casinos, raffles and games
of chance; dealers in motor vehicles, precious metals and stones, and art and antiquities; and
real estate agents
99

With U.S.: YES
Guatemala is a member of the Caribbean Financial Action Task Force (CFATF), a Financial
here: http://www.cfatf-
gafic.org/downloadables/mer/Guatemala_3rd_Round_MER_(Final)_English.pdf
There are relatively few convictions for money laundering, most of which are for the illegal
transport of cash. The number of staff at the FIU and the capacity of law enforcement officials
may hamper the ability of the authorities to prosecute more cases.
Former President Alfonso Portillo was indicted in the United States in December 2009 with one
count of conspiracy to commit money laundering. Both a Guatemalan trial and appellate court
have approved his extradition to the United States and the case is currently on appeal before the
Guatemalan Supreme Court.
Law enforcement agencies report that money laundering has increased during the year,
especially by groups of air travelers heading to countries such as Panama with slightly less than
the amount of the Guatemalan reporting requirement ($10,000), and a large number of small
deposits in banks along the Guatemalan border with Mexico. A new law regarding asset
seizures, passed by Congress in December 2010, will take effect in June 2011 and allows
Guatemalan authorities to seize cash in structuring transactions and transfer it to the state without
first having to obtain a criminal conviction against the courier. The same law will also prevent
new businesses from issuing bearer shares of stock. The law requires any existing business with
bearer shares to convert the shares to nominative by June 2013, but it is not clear what the
consequences will be for failure to do so.
In October, Guatemalan monetary authorities approved a regulation to establish limits for cash
transactions in foreign currency to reduce money laundering and terrorism financing risks. The
law states that deposits totaling over $3,000 in any given month will be subject to additional
requirements.
Casinos are not legal in Guatemala, however, a number of casinos, games of chance and video
lotteries operate, both onshore and offshore. There is no regulatory oversight or legal framework
for casino operation, although they are listed as covered entities under the AML law. Attempts
by the government to enforce requirements are not successful. Lotteries and raffles are subject to
local jurisdiction licensing but are not subject to AML/CFT supervision. Unsupervised gaming
activity represents a significant money laundering risk.
Guernsey
The Bailiwick of Guernsey (the Bailiwick) encompasses a number of the Channel Islands
(Guernsey, Alderney, Sark, and Herm). As a Crown Dependency of the United Kingdom, it
relies on the United Kingdom (UK) for its defense and international relations. Alderney and
Sark have their own separate parliaments and civil law systems. Guernseys parliament
legislates in matters of criminal justice for all of the islands in the Bailiwick. The Bailiwick is a
sophisticated financial center and, as such, it continues to be vulnerable to money laundering.
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approach
YES
Covered entities: All financial services businesses; lawyers, accountants and estate agents;
and eGambling services
Covered entities: All businesses
Prosecutions: Two
Convictions: Two in 2010
Assets forfeited: criminally: $1,567,265 civilly: Not available
With U.S.: YES
The IMFs December 2010 Detailed Assessment Report on Anti-Money Laundering and
Combating the Financing of Terrorism for the Bailiwick of Guernsey can be found at:
http://www.imf.org/external/pubs/ft/scr/2011/cr1112.pdf
The Bailiwick has been actively involved in the provision of formal mutual legal assistance for
many years. The authorities consider themselves able to provide assistance without the need to
enter into mutual legal assistance treaties, and this has enabled compliance with requests from a
wide range of jurisdictions, including the US, using the full range of investigatory powers in the
law.
Guernseys comprehensive AML/CFT legal framework provides a sound basis for an effective
AML/CFT regime, and most shortcomings are technical in nature. Money laundering and the
financing of terrorism are criminalized fully in line with the FATF standard and the legal
framework provides an ability to freeze and confiscate assets in appropriate circumstances.
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While no shortcomings have been identified in the legal framework, concerns remain with
respect to the implementation of the money laundering provisions. Given the size of the
Bailiwicks financial sector and its status as an international financial center, the modest number
of cases involving money laundering by financial sector participants and the small number of
money laundering cases resulting in convictions raises questions concerning the effective
application of money laundering provisions.
Guernsey is a Crown Dependency and cannot sign or ratify international conventions in its own
right unless entrusted to do so. Rather, the UK is responsible for the Bailiwicks international
affairs and, at Guernseys request, may arrange for the ratification of any Convention to be
extended to the Bailiwick. The UKs ratification of the 1988 UN Drug Convention was extended
to include the Bailiwick on April 3, 2002; its ratification of the UN Convention against
Corruption was extended to include Guernsey on November 9, 2009; and its ratification of the
International Convention for the Suppression of the Financing of Terrorism was extended to
Guernsey on September 25, 2008. The UK has not extended the UN Convention against
Transnational Organized Crime to the Bailiwick
Guinea-Bissau
The Government of Guinea-Bissau is not in full compliance with international conventions
against money laundering and terrorist financing because of inadequate resources, weak border
controls, and competing national priorities. Of all West African countries, none has been so
thoroughly penetrated and corrupted by Latin American drug cartels as Guinea-Bissau. Drug
barons from Latin America and their collaborators from the region and other parts of the world
have taken advantage of the extreme poverty, unemployment, political instability, lack of
effective customs and law enforcement, and general insecurity to make the country a major
transit point for cocaine destined to consumer markets, mainly in Europe. One of the poorest
countries in the world, the value of the illicit narcotics trade in Guinea-Bissau is much greater
than its national income. Using threats and bribes, drug traffickers infiltrate state structures and
operate with impunity.
YES
Covered entities: Financial institutions, microfinance institutions, exchange houses,
securities firms, insurance companies, casinos, brokerages, charities, nongovernmental
organizations (NGOs), and intermediaries such as lawyers, accountants, notaries and
broker/dealers
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Covered entities: Financial institutions, microfinance institutions, exchange houses,
securities firms, insurance companies, casinos, brokerages, charities, nongovernmental
organizations (NGOs), and intermediaries such as lawyers, accountants, notaries and
broker/dealers
Prosecutions: 0
Convictions: 0
With U.S.: NO
With other governments/jurisdictions: NO
Guinea Bissau is a member of the Intergovernmental Action Group against Money Laundering in
West Africa (GIABA), a Financial Action Task Force (FATF)-style regional body. Its most
recent mutual evaluation can be found here: http://www.giaba.org/
In April, 2010, the United States Treasury froze the assets of two top Guinea-Bissau military
officers and designated them as major drug kingpins.
Reportedly, banks are reluctant to file STRs because of the fear of tipping off by an allegedly
indiscrete judiciary. Article 26 of National Assembly Resolution No. 4 of 2004 stipulates that if
a bank suspects money laundering it must obtain a declaration of all properties and assets from
the subject and notify the Attorney General, who must then appoint a judge to investigate. The
banks solicitation of an asset list from its client could also amount to tipping off the subject.
Although the law establishes asset forfeiture authorities and provides for the sharing of
confiscated assets, a lack of coordination mechanisms to seize assets and facilitate requests for
cooperation in freezing and confiscation from other countries hampers cooperation.
The Government of Guinea-Bissau (GOGB) should continue to work with its partners in
GIABA, the Economic Community of West African States (ECOWAS) and others to establish
and implement an effective anti-money laundering/counter-terrorist financing (AML/CFT)
regime. The government needs urgent help to restore sovereignty, administer justice and regain
control of its borders. The GOGB should ensure the sectors covered by its AML law have
implementing regulations and competent authorities to ensure compliance with the laws
requirements. It should also amend its terrorist financing law to comport with international
standards. The GOGB should establish, staff and train its FIU, and ensure that resources are
available to sustain its capacity. It should work to improve the training and capacity of its police
and judiciary to combat financial crimes. Guinea-Bissau should undertake efforts to eradicate
systemic corruption. The GOGB should become a party to the UN Convention for the
Suppression of the Financing of Terrorism, and the UN Conventions against Corruption and
Transnational Organized Crime.
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Haiti
International donors reacted to the Haitian earthquake, tropical storms and cholera epidemic of
2010 by pumping much-needed currency and investments for disaster relief and reconstruction
into the country. The earthquake impacted all aspects of Haitian life including ripple effects in
the banking, commercial and criminal justice institutions. Despite improving financial
intelligence and enforcement capacity, the weakness of the Haitian judicial system and
prosecutorial mechanism continues to leave the country vulnerable to corruption and money
laundering. Haitian organized crime groups are engaged in drug trafficking and other criminal
and fraudulent activity, but do not appear to be involved in terrorist financing. Haiti is the
poorest country in the Western Hemisphere and relies heavily on remittances from the large
expatriate Haitian community.
YES
Covered entities: Banks and non-bank financial institutions including casinos and money
remittance institutions
Covered entities: Banks
Number of STRs received and time frame: Nine in an unknown time frame
Number of CTRs received and time frame: 146,627 in 2010
Prosecutions: 0
Convictions: 0
Assets forfeited: criminally: 14 houses confiscated and slated for sale; five houses
confiscated and donated to GOH law enforcement agencies; $2,000,000 currency seized
civilly: Not available
104
With U.S.: YES

Haiti is a member of the Caribbean Financial Action Task Force, a Financial Action Task Force
(FATF)-style regional body. Its most recent mutual evaluation can be found here:
http://www.cfatf-gafic.org/index.php
Haiti suffered a devastating earthquake on January 12, 2010 which destroyed 28 of 29 Haitian
ministry buildings and the Presidential Palace. In addition, an outbreak of cholera, floods and a
contested Presidential election were all contributing factors slowing, but not stopping, the
activities of the key institutions involved in financial intelligence, anti-money laundering
enforcement, and asset forfeiture and seizure.
The Government of Haiti (GOH) remains hampered by ineffectual and outdated criminal and
criminal procedural codes, and by the inability of judges and courts to address cases referred for
prosecution. A Presidential commission has drafted new criminal and criminal procedural codes
that require parliamentary approval. The anti-terrorist legislation drafted and submitted to
Parliament is also awaiting Parliamentary approval.
Following the January 2010 earthquake, banks, with the exception of the Central Bank, could not
transmit reports to UCREF. The UCREF also lost office space as a result of the earthquake and,
together with a few other law enforcement agencies, has relocated to a building confiscated from
a Colombian drug dealer. The UCREF is making plans to review casino operations in Haiti and
ensure that casinos are properly licensed and are made aware of their responsibilities as defined
in the GOH anti-money laundering legislation.
BAFE, a unit within the Haitian National Police continues to work closely with the DEA to seize
and confiscate properties owned by convicted drug traffickers serving prison sentences in the
United States.
Haiti is not a party to the International Convention for the Suppression of the Financing of
Terrorism or the UN Convention against Transnational Organized Crime.
Hong Kong
Hong Kong, a Special Administrative Region of the Peoples Republic of China, is a major
international financial and trading center. As of December 2010, Hong Kongs stock market was
the worlds seventh largest and Asias third largest with total market capitalization of $2.71
trillion. Already the worlds 15th largest banking center and sixth largest foreign exchange
trading center, Hong Kong continued its expansion as an offshore Renminbi (RMB) financing
center, accumulating in 2010 over $48 billion in RMB-denominated deposits at authorized
institutions. Hong Kong does not differentiate between offshore and onshore entities for
licensing and supervisory purposes.
Hong Kongs low and simplified tax regime, coupled with its sophisticated banking system, shell
company formation agents, free port status, and the absence of currency and exchange controls,
present vulnerabilities for money laundering, including trade-based money laundering. The
primary sources of laundered funds in Hong Kong are corruption, tax evasion, fraud, illegal
gambling and bookmaking, prostitution, loan sharking, commercial crimes, and intellectual
property rights infringement. Criminal proceeds laundered in Hong Kong are derived from local
105
and overseas criminal activities, but Hong Kong law enforcement authorities attribute only a
small percentage of these laundered funds to drug-trafficking organizations.
YES
Covered entities: Banks, securities and insurance entities, and money exchangers
Covered entities: All persons, irrespective of entity or amount of transaction involved
Assets forfeited: Criminally: As of December 2010, $9.33 million was under a court
confiscation order but not yet paid to the government Civilly: Not applicable
With U.S.: YES
Hong Kong is a member of the Financial Action Task Force (FATF) and the Asia/Pacific Group
on Money Laundering (APG), a FATF-style regional body. Its most recent mutual evaluation
can be found here: http://www.fatf-gafi.org/dataoecd/19/38/41032809.pdf
U.S. government agencies enjoy excellent working relationships with Hong Kongs law
enforcement personnel and financial regulators. Cooperation includes joint investigative efforts,
information exchange, training, and extraditions.
In October 2010, the Government of Hong Kong introduced to the legislature a draft bill that, if
passed, would provide statutory backing to existing financial regulatory guidelines, provide for
106
administrative and criminal sanctions authority, and establish a regulatory regime for money
changers.
In April 2010, the Government of Hong Kong initiated a study to evaluate the implementation of
a cross-border currency reporting system. The governments work plan calls for an evaluation of
the feasibility of tracking and monitoring currency movements in/out of its borders, including
necessary legislative and resource requirements.
Hong Kong still needs to institute mandatory oversight for designated non-financial businesses
and professions, and implement mandatory cross-border currency reporting requirements, both
potential loopholes for money launderers and terrorist financiers. Hong Kong should also
establish threshold reporting requirements for currency transactions and put in place
structuring provisions to counter evasion efforts. As a major trading hub, Hong Kong should
also closely examine trade-based money laundering.
India
Indias economic and demographic expansion makes it both a regional financial center and an
increasingly significant target for money launderers and terrorist groups. Indias extensive
informal economy and remittance systems, porous borders, strategic location, persistent
corruption, and historically onerous tax administration contribute to its vulnerability to financial
and terrorist-related crimes.
Tax avoidance and the proceeds of economic crimes (including fraud, cyber crime and identity
theft) are still the mainstay of money launderers in India, but laundered funds are also derived
from human and narcotics trafficking, transnational organized crime, illegal trade, particularly in
endangered wildlife and illegal gems (principally diamonds), and corruption. India also faces an
increasing inflow of high-quality counterfeit currency, which is produced primarily in Pakistan
but smuggled to India through multiple international routes. Criminal networks exchange
counterfeit currency for genuine notes, which not only facilitates money laundering, but also
represents a threat to the Indian economy.
Indias location between heroin producing countries in the Golden Triangle and Golden
Crescent, along with its porous borders, make it a frequent transit point for drug trafficking.
Additionally, India is a major producer of licit acetic anhydride, the precursor chemical required
to convert morphine base into heroin, making producers susceptible to abuse by illicit networks.
India is also a significant target for terrorist groups, both external and domestic. Most terrorist
activities are conducted by international terrorist groups and entities linked to the global jihad,
with the support of both state and non-state external actors. In addition, several domestic
separatist and insurgent groups are active. Terrorist groups often use counterfeit currency and
hawaladars, as well as physical cross-border currency smuggling, to move funds from external
sources to finance their activities in India.
India licenses seven offshore banking units (OBUs) to operate in the Special Economic Zones
(SEZ). The OBUs are prohibited from engaging in cash transactions and are restricted to lending
to the SEZ wholesale commercial sector. Although located in India, OBUs essentially function
like foreign branches of Indian banks, but with defined physical boundaries and functional limits.
As such, they are subject to the same anti-money laundering/counter-terrorist financing
(AML/CFT) provisions as the domestic sector. SEZs were established to promote export-
oriented commercial businesses, including manufacturing, trading and services (mostly
information technology), and access is controlled by Customs officers. As of December 2010,
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about 122 SEZs were operating and more than 575 SEZs had been formally approved throughout
India.
YES
Covered entities: Banks and merchant banks; insurance companies; housing and non-
banking finance companies; casinos; payment system operators; authorized money changers
and remitters; chit fund companies; charitable trusts that include temples, churches and non-
profit organizations; intermediaries; stock brokers; sub-brokers; share transfer agents;
trustees, underwriters, portfolio managers and custodians; investment advisors; depositories
and depository participants; foreign institutional investors; credit rating agencies; venture
capital funds; collective schemes including mutual funds; and the post office
Enhanced due diligence procedures PEPs: Foreign: YES Domestic: YES
Covered entities: Banks and merchant banks; insurance companies; housing and non-
banking finance companies; casinos; payment system operators; authorized money changers
and remitters; chit fund companies; charitable trusts that include temples, churches and non-
profit organizations; intermediaries; stock brokers; sub-brokers; share transfer agents;
trustees, underwriters, portfolio managers and custodians; investment advisors; depositories
and depository participants; foreign institutional investors; credit rating agencies; venture
capital funds; collective schemes including mutual funds; and the post office
Number of STRs received & time frame: 10,067 (April 2009 - March 2010)
Number of CTRs received & time frame: 6,690,000 (April 2009 - March 2010)
Prosecutions: Six (April 2006 - December 2009)
Convictions: Zero
With U.S.: YES
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India is a member of the Financial Action Task Force (FATF) and two FATF-style regional
bodies: the Asia/Pacific Group on Money Laundering (APG) and the Eurasian Group on
Combating Money Laundering and Terrorist Financing (EAG). Its most recent mutual
evaluation is available here:
Indias low number of money laundering convictions and the financial sectors low number of
terrorism-related suspicious transaction reports (STRs) are not commensurate with the size of
Indias economy or its threat profile. Additionally, the lack of severe penalties imposed by
regulators against banks and financial institutions, coupled with the low statistics, may indicate a
lack of appropriate due diligence procedures and/or weaknesses in the transaction monitoring
systems. The Government of India (GOI) should ensure reporting entities fully implement
appropriate due diligence procedures, to include both computerized tracking systems and active
engagement by trained frontline personnel. The GOI should also emphasize the importance of
human intervention and analysis in terrorist financing cases, as the varied profiles of these cases
may not trigger an automated report.
The GOI issued circulars requiring financial institutions to examine more closely transactions
involving higher risk jurisdictions. The circular requires that written reports be available to
competent authorities and auditors. As of December 31, 2010, the AML/CFT Regulatory
Framework Assessment Committee finished its evaluation of the institutional framework and
began drafting a report on appropriate countermeasures for countries that do not conform to the
FATF Recommendations.
The GOI has taken action against certain hawala activities, but its successes generally stem from
prosecuting legitimate businesses that conduct hawala transactions on the side. Hawaladars
operating entirely outside of the formal economy are difficult to trace, and provide money
launderers and terrorist organizations ready access to an extensive but unmonitored network in
India. The GOIs liberalization of the foreign exchange regime has helped otherwise legitimate
actors move out of hawala and into the formal sector. However, the GOI no longer criminalizes
operating a money transfer business without a license. The remaining administrative penalties
do not serve as a sufficient deterrent to those engaged in criminal activity. The GOI should re-
criminalize operating without a license.
The GOI should also facilitate the development of alternative money transfer services, including
mobile banking. This expansion of legitimate, accessible services would allow broader financial
inclusion of legitimate individuals and entities, and reduce AML/CFT vulnerabilities by
shrinking the informal network.
The GOI should press for presidential approval to implement the Foreign Contribution
(Regulation) Act 1976, which would extend foreign contribution reporting requirements to any
non-profit organization that has a political, cultural, economic, educational or social focus and
automate notification of suspicious transactions to the FIU. The GOI should also extend the
Prevention of Money Laundering Act to include gem and precious-metals dealers, real estate
agents, lawyers, notaries, other independent legal professionals, accountants, and commodity
futures brokers and to clearly add a safe harbor provision for those filing STRs in good faith.
109
Indonesia
Although neither a regional financial center nor an offshore financial haven, Indonesia is
vulnerable to money laundering and terrorist financing due to gaps in financial system
regulation, extensive use of cash in the economy, a lack of effective law enforcement, and the
wide-ranging tactics of major indigenous terrorist groups, such as Jemaah Islamiyah, and their
financiers from abroad. Most money laundering in the country is connected to non-drug criminal
activity such as corruption, illegal logging, theft, bank fraud, credit card fraud, maritime piracy,
sale of counterfeit goods, gambling and prostitution. Indonesia has a long history of smuggling,
a practice facilitated by thousands of miles of unpatrolled coastline, weak law enforcement, and
poor customs infrastructure. The proceeds of illicit activities are easily moved offshore and
repatriated as needed for commercial and personal needs. Although Indonesias corruption
indicators are improving, corruption remains a major issue for all aspects of Indonesian society
and a challenge for anti-money laundering/counter-terrorist financing (AML/CFT)
implementation.
approach
YES
Covered entities: Banks, finance companies, insurance companies and insurance brokerage
companies, pension fund financial institutions, securities companies, investment managers,
providers of money remittance and foreign currency traders
Covered entities: Banks, financing companies, insurance companies and insurance brokerage
companies, pension fund financial institutions, securities companies, investment managers,
custodians, trustees, postal services as providers of fund transfer services, foreign currency
changers (money traders), providers of instruments of payment using cards, providers of e-
money or e-wallet, cooperatives doing business as savings and loans, pawnshops, companies
doing business in commodity futures trading, and providers of money remittance. Property
companies, property agents, car dealers, dealers of precious stones and jewelry/precious
metals, art and antique dealers, and auction houses became subject to STR reporting in 2010
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Number of CTRs received and time frame: 1,461,883 in 2010
Convictions: 36 - January through November 2010
With U.S.: YES
With other governments/jurisdiction: YES
Indonesia is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial
here: http://www.apgml.org/documents/docs/17/Indonesia%20MER2_FINAL.pdf
On October 22, the president signed Law No. 8 of 2010 on the Prevention and Eradication of the
Crime of Money Laundering. This law expands the list of agencies permitted to conduct money
laundering investigations; increases the ability of the independent Financial Intelligence Unit
(PPATK) to examine suspicious financial transactions; expands institutions authorized to obtain
results of PPATK analysis or examination of transactions; creates a streamlined mechanism to
seize and freeze criminal assets; expands the entities which must file reports with PPATK and
increases some criminal penalties for money laundering offenses. The law designates non-
financial businesses, in addition to Indonesian banks and providers of financial services, which
are required to report suspicious transactions to PPATK.
The Central Bank issued new regulations, effective December 1, 2010, applying to rural banks
and rural Shariah banks, which contain more extensive requirements for customer due diligence,
enhanced due diligence for high-risk customers and politically exposed persons, and checks
against the Central Banks Terrorist List, as part of Indonesias AML/CFT program.
Indonesia continues to lack an effective mechanism to implement UNSCR 1267 and 1373,
though it recently passed AML legislation that will provide for the freezing of terrorist assets
linked to the UN List of designated terrorists and terrorist organizations. The government also
appointed a drafting team to prepare draft terrorist financing legislation that would expand
criminal liability, create a better mechanism to freeze and seize terrorist assets and subject non-
governmental organizations (NGOs) to PPATK regulation. This draft legislation is expected to
be submitted to the legislature in 2011.
In 2010, Indonesian prosecutors brought their first terrorism case based solely on terrorist
financing grounds. The Saudi national defendant charged with financing the July 17, 2009 twin
Jakarta hotel bombings was acquitted of the terrorist finance charge on June 28, 2010, but found
guilty of immigration violations and sentenced to 18 months imprisonment. In addition, as of
mid-December 2010, there are three indictments under Article 11 of the 2003 Anti-Terrorism
law, which proscribes intentionally providing or collecting funds to be used partly or wholly for
acts of terrorism.
On July 7, 2010, the Government of Indonesia completed a domestic review of its non-profit
sector and the Coordinating Ministry of Politics, Law and Security Affairs is expected to submit
to the President recommendations regarding NGO section supervision.
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Indonesia has mutual legal assistance treaties with several countries but not the U.S. It shares
law enforcement information with the U.S. through memoranda of understanding.
Iran
Iran is not a regional financial center. Its economy is marked by a bloated and inefficient state
sector and over-reliance on the petroleum industry. A combination of price controls and
subsidies continue to weigh down the economy, although the Iranian government began a broad
subsidy reform in 2010. Widespread corruption has also undermined the potential for private
sector-led growth. The United States lists Iran as a state-sponsor of terrorism and the Financial
Action Task Force (FATF) has repeatedly warned of Irans failure to address the risks of terrorist
financing, urging jurisdictions around the world to impose effective countermeasures to protect
their financial sectors from the dangers of illicit finance emanating from Iran. Iran has a large
underground economy, spurred by restrictive taxation, widespread smuggling, currency
exchange controls, capital flight, and a large Iranian expatriate community.
Iran has established an international banking network, with many large state-owned banks that
have foreign branches and subsidiaries in Europe, the Middle East, Asia, and the Western
Hemisphere. In 1994, Iran authorized the creation of private credit institutions; licenses for these
banks were first granted in 2001. In a number of cases, Iran has used its state-owned banks to
channel funds to terrorist organizations and finance its nuclear and ballistic missile programs.
The United States has designated a total of 20 Iranian-linked banks and subsidiaries under its
counter-proliferation and terrorism authorities.

THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: Unknown



Not available
Covered entities: The Central Bank, banks, financial and credit institutions, insurance
companies (including the state regulator and reinsurance provider), interest-free funds,
charity organizations and institutions, municipalities, notaries, lawyers, accountants, auditors,
authorized specialists of the Justice Ministry, and official inspectors
Enhanced due diligence procedures for PEPs: Foreign: Unknown Domestic: Unknown
112
Covered entities: The Central Bank, banks, financial and credit institutions, insurance
companies (including the state regulator and reinsurance provider), interest-free funds,
charity organizations and institutions, municipalities, notaries, lawyers, accountants, auditors,
authorized specialists of the Justice Ministry, and official inspectors


Convictions: None

With U.S.: NO
With other governments/jurisdictions: Unknown
Iran is not a member of any Financial Action Task Force (FATF)-style regional body.
In 1984, the Department of State designated Iran as a state sponsor of terrorism. Iran continues
to provide material support, including resources and guidance, to multiple terrorist organizations
and other groups that undermine the stability of the Middle East and Central Asia. Hamas,
Hizballah, and the Palestinian Islamic Jihad (PIJ) maintain representative offices in Tehran in
part to help coordinate Iranian financing and training. In November 2008, Treasury revoked the
license authorizing U-turn transfers involving Iran, thus terminating Irans ability to access the
U.S. financial system indirectly via non-Iranian foreign banks.
Since 2006, the U.S. has taken a number of targeted financial actions against key Iranian
financial institutions, entities, and individuals under non-proliferation, counter-terrorism, human
rights, and Iraq-related authorities, i.e., Executive Order 13382, Executive Order 13224,
Executive Order 13553, and Executive Order 13438, respectively. To date, the Departments of
the Treasury and State have designated over 240 Iranian entities and individuals for
proliferation-related activity under Executive Order 13382.
The following are some examples of notable designations under Executive Orders: Twenty
Iranian-linked banks (including Bank Sepah, Bank Melli, Bank Mellat, and Export Development
Bank of Iran, plus Post Bank, Ansar Bank, Mehr Bank, and Europaisch-Iranische Handelsbank
in 2010), located in Iran and overseas, have been designated in connection with Irans
proliferation activities. One state-owned Iranian bank (Bank Saderat and its foreign operations)
was designated for funneling money to terrorist organizations. The Qods Force, a branch of the
Iranian Revolutionary Guard Corps (IRGC), was designated for providing material support to the
Taliban, Lebanese Hizballah, and Palestinian Islamic Jihad. The Martyrs Foundation (also
known as Bonyad Shahid), an Iranian parastatal organization that channels financial support
from Iran to several terrorist organizations in the Levant, including Hizballah, Hamas, and the
Palestinian Islamic Jihad (PIJ), has been designated along with Lebanon- and U.S.-based
affiliates. Another Iranian parastatal, Bonyad Taavon Sepah, was designated in 2010 for its ties
113
to the IRGC. The United States also designated the Islamic Republic of Iran Shipping Lines
(IRISL) as a proliferator in 2008 and Irans Moallem Insurance Company in 2010 for providing
marine insurance to vessels owned by IRISL.
Since July 2006, the United Nations Security Council (UNSC) has passed six related resolutions
(UNSCRs), four of which imposed financial sanctions on Iran. The most recent of these,
UNSCR 1929, was adopted by the UNSC in June 2010.
In October 2007, the Financial Action Task Force (FATF) issued its first public statement
expressing concern that Irans lack of a comprehensive framework to counter money laundering
and terrorist financing represents a significant vulnerability to the international financial system.
In February 2009, the FATF urged all jurisdictions to apply effective countermeasures to protect
their financial sectors from the money laundering/terrorist financing risks emanating from Iran
and also stated that jurisdictions should protect against correspondent relationships being used to
bypass or evade countermeasures or risk mitigation practices. The FATF reiterated its call for
countermeasures most recently in October 2010. The FATF urges Iran to immediately and
meaningfully address its anti-money laundering/counter the financing of terrorism (AML/CFT)
deficiencies, in particular by criminalizing terrorist financing and effectively implementing
suspicious transaction reporting requirements.
Since February 2007, the European Union (EU) has also adopted numerous measures to
implement the UNSCRs on Iran and further protect the EU from Iranian risks. For example, in
2010, the EU adopted significant new measures against Iran, including new sanctions on several
Iranian banks, the IRGC, and IRISL; enhanced vigilance by way of additional reporting and prior
authorization for any funds transfers to and from an Iranian person, entity, or body above a
certain threshold amount; a prohibition on the establishment of new Iranian bank branches,
subsidiaries, joint ventures, and correspondent accounts; and other restrictions on insurance,
bonds, energy, and trade.
Numerous countries around the world have also restricted their financial and business dealings
with Iran in response to both the UNSC measures on Iran as well as the FATF statements on
Irans lack of adequate AML/CFT controls. A growing number of governments have moved to
designate Iranian banks, and many of the worlds leading financial institutions have voluntarily
chosen to reduce or cut ties with Iranian banks. South Korea, Japan, Australia, Canada, Norway,
India and others undertook extensive additional listings of Iranian entities and individuals and
implemented new systemic measures in 2010.
Iran is ranked 146 out of 178 countries listed in Transparency Internationals 2010 Corruption
Perception Index. There is pervasive corruption within the ruling and religious elite, government
ministries, and government-controlled business enterprises.
In Iran and elsewhere in the region, proceeds from narcotics sales are sometimes exchanged for
trade goods via value transfer. Illicit proceeds from narcotics trafficking are used to purchase
goods in the domestic Iranian market; those goods are often exported and sold in Dubai. Irans
merchant community makes active use of hawala and moneylenders. Counter-valuation in
hawala transactions is often accomplished via trade, thus trade-based money laundering is likely
a prevalent form of money laundering. Many hawaladars and traditional bazaari are linked
directly to the regional hawala hub in Dubai. Over 300,000 Iranians reside in Dubai, with
approximately 8,200 Iranian-owned companies based there.
114
Irans real estate market is also often used to launder money. Frequently, real estate settlements
and payments are made overseas. In addition, there are reports that billions of dollars in Iranian
capital has been invested in the United Arab Emirates, particularly in Dubai real estate.
In 2010, the Government of the Islamic Republic of Iran teamed with United Nations Office on
Drugs and Crime to establish a financial intelligence unit (FIU) that will analyze suspicious
financial transactions, particularly those dealing with illicit narcotics proceeds. However, no
independent assessment has been conducted to assess if the FIU meets international standards.
Iraq
Iraqs economy is primarily cash-based, and there is little data available on the extent of money
laundering in the country. Smuggling is endemic, involving consumer goods, cigarettes, and
petroleum products. There is a large market in Iraq for stolen automobiles from Europe and the
United States. Bulk cash smuggling, counterfeit currency, trafficking in persons, and intellectual
property rights violations are also major problems. Ransoms from kidnappings and extortion are
often used to finance terrorist networks. There are credible reports of counterfeiting. Trade-
based money laundering, customs fraud, and value transfer are found in the underground
economy. Hawala networks, both licensed and unlicensed, are widely used for legitimate and
illicit purposes. Regulation and supervision of the formal and informal financial sectors is still
quite limited and enforcement is subject to political constraints, resulting in weak private sector
controls. Corruption is a major challenge and is exacerbated by weak financial controls in the
banking sector and weak links to the international law enforcement community. Transparency
Internationals 2010 International Corruption Perception index ranked Iraq as 175 out of 178
countries, demonstrating a slight decline from the previous year.
Iraq has four free trade zones: the Basra/Khor al-Zubair seaport; Ninewa/Falafel area;
Sulaymaniyah; and al-Qaim, located in western Al Anbar province. Under the Free Trade Zone
(FTZ) Authority Law, goods imported or exported from the FTZ are generally exempt from all
taxes and duties, unless the goods are to be imported for use in Iraq. Additionally, capital,
profits, and investment income from projects in the FTZ are exempt from taxes and fees
throughout the life of the project, including the foundation and construction phases. Value
transfer via trade goods is a significant problem in Iraq and the surrounding region. Iraq is
investigating the application of a new customs tariff regime.



115

YES
Covered entities: Banks; investment funds managers; life insurance companies and those
which offer or distribute shares in investment funds; securities dealers; money transmitters,
hawaladars, and issuers or managers of credit cards and travelers checks; foreign currency
exchange houses; asset managers, transfer agents, investment advisers, securities dealers;
and, dealers in precious metals and stones

Covered entities: Banks; investment funds managers; life insurance companies and those
which offer or distribute shares in investment funds; securities dealers; money transmitters,
hawaladars, and issuers or managers of credit cards and travelers checks; foreign currency
exchange houses; asset managers, transfer agents, investment advisers, securities dealers;
and, dealers in precious metals and stones


Prosecutions: None
Convictions: None

With U.S.: NO
Iraq is a member of MENAFATF, a Financial Action Task Force (FATF)-style regional body.
Iraq has not yet undergone a mutual evaluation.
CPA Law 93, AML Act of 2004, the only anti-money laundering statute in Iraq, takes an all
serious crimes approach although the statute itself references proceeds of some form of
unlawful activity. Although the statute seems to broaden itself even beyond serious crime,
the criminalization under CPA Law 93 is that of a misdemeanor. Thus, Iraq will not prosecute
cases under this law because the law does not effectively criminalize money laundering. Iraq
should become a party to the UN Convention for the Suppression of the Financing of Terrorism.
Iraqs legal framework needs to be strengthened, either by amendment or redrafting of new

AML/CFT legislation. Until the parliamentarians change the law and adequately criminalize
116
money laundering, there will be a lack of political will in enforcing it. In addition, Iraqi
ministries need to support a viable AML/CFT regime with cooperation across ministries. The
lack of implementation of legislation and weak enforcement by the Money Laundering Reporting
Office (MLRO) housed in the Central Bank of Iraq undermine its ability to be a stalwart
counterforce to terrorist financing and money-laundering. The MLRO does not appear to take
action to gather financial intelligence on suspected criminal activity to shore up law enforcement
efforts or assist in obtaining relevant information to support ongoing investigations from foreign
jurisdictions. The Government of Iraq should ensure the MLRO has the capacity, resources and
authorities to serve as the central point for collection, analysis and dissemination of financial
intelligence to law enforcement and to provide international assistance.
Investigators, prosecutors and judges all need support from their principals to move farther with
pursuing AML/CFT cases. Prosecutors and investigators are frustrated because their cases are
not pursued by judges; similarly, judges claim the cases they receive are of poor quality and not
prosecutable. Senior level support and increased capacity for all parties are necessary to ensure
AML/CFT cases can be successfully prosecuted in Iraq.
In practice, despite customer due diligence requirements, most banks open accounts based on the
referral of existing customers and/or verification of a persons employment. Actual application
of the rules varies widely across Iraqs 39 state-owned and private banks. Also, rather than file
STRs in accordance with the law, most banks either do internal investigations or contact the FIU,
which does an account review to resolve any questionable transactions. In practice, very few
STRs are filed. US dollars are widely accepted and are used for many payments made by the US
military, and assistance agencies and their contractors.
Banks do receive the UNSCR 1267 Committee list of designated terrorists and terrorist
organizations, although the current process for distribution is very inefficient and inconsistent.
Isle of Man
Isle of Man (IOM) is a British crown dependency, and while it has its own parliament,
government, and laws, the United Kingdom (UK) remains constitutionally responsible for its
defense and international representation. Offshore banking, manufacturing, and tourism are key
sectors of the economy. The government offers incentives to high-technology companies and
financial institutions to locate on the island. Its large and sophisticated financial center is
potentially vulnerable to money laundering. Most of the illicit funds in the IOM are from fraud
schemes and narcotics trafficking in other jurisdictions, including the UK. Identity theft and
Internet abuse are growing segments of financial crime activity.
117

YES
Covered entities: Banks; building societies; credit issuers; financial leasing companies;
money exchanges and remitters; issuers of checks, travelers checks, money orders, electronic
money, or payment cards; guarantors; securities and commodities futures brokers;
safekeeping, portfolio and asset managers; estate agents; auditors, accountants, lawyers and
notaries; insurance companies and intermediaries; casinos and bookmakers; high-value goods
dealers and auctioneers
Covered entities: Banks; building societies; credit issuers; financial leasing companies;
money exchanges and remitters; issuers of checks, travelers checks, money orders, electronic
money, or payment cards; guarantors; securities and commodities futures brokers;
safekeeping, portfolio and asset managers; estate agents; auditors, accountants, lawyers and
notaries; insurance brokers and companies and intermediaries; casinos and bookmakers; high-
value goods dealers and auctioneers
Number of STRs received and time frame: 1,435
Assets forfeited: criminally: $510,381 civilly: $94,903
With U.S.: YES
Compliance with international standards was evaluated in a report prepared by the International
Monetary Funds Financial Sector Assessment Program. The report can be found here:
IOM legislation provides powers to constables, including customs officers, to investigate
whether a person has benefited from any criminal conduct. These powers allow information to
be obtained about that persons financial affairs. These powers can be used to assist in criminal
investigations abroad as well as in the IOM. In 2003, the U.S. and the UK agreed to extend to
the IOM the U.S.-UK Treaty on Mutual Legal Assistance in Criminal Matters.
The Terrorism (Finance) Act 2009 allows the IOM authorities to compile their own list of
suspects subject to sanctions when appropriate.
IOM is a Crown Dependency and cannot sign or ratify international conventions in its own right
unless entrusted to do so. Rather, the UK is responsible for IOMs international affairs and, at
IOMs request, may arrange for the ratification of any Convention to be extended to the Isle of
118
Man. The UKs ratification of the 1988 UN Drug Convention was extended to include IOM on
December 2, 1993; its ratification of the UN Convention against Corruption was extended to
include the IOM on November 9, 2009; and its ratification of the International Convention for
the Suppression of the Financing of Terrorism was extended to IOM on September 25, 2008.
The UK has not extended the UN Convention against Transnational Organized Crime to the
IOM.
Israel
Israel is not regarded as a regional financial center. It primarily conducts financial activity with
the markets of the United States and Europe, and to a lesser extent with the Far East. Criminal
groups in Israel, either home-grown or with ties to the former Soviet Union, United States, and
European Union often utilize a maze of offshore shell companies and bearer shares to obscure
beneficial owners. The Minister of Public Security recently announced that domestic revenue
from the drug trade is in the billions of dollars. Seizures by the police have increased
dramatically over 2009, with increased manpower and cooperation at key border points. Human
trafficking is considered the crime-for-profit with the greatest human toll in Israel, and public
corruption the crime with the greatest social toll.
Black market penetration in Israel remains low and is comparable in scale to that of Western,
industrialized nations. With the exception of a few isolated incidents involving the sales of drugs
in the United States by Israeli organized crime, Israels illicit drug trade is regionally-focused,
with Israel as more of a transit country than a stand-alone significant market. Concern from the
authorities is growing relative to illegal pharmaceuticals sales, some retail businesses which are
suspected money-laundering enterprises, and corruption accusations against some public officials
which may or may not be politically-motivated. Bilateral cooperation between United States and
Israeli law-enforcement authorities is very high, including joint repatriations, training exercises
and sharing of information where relevant.
YES
Covered entities: Banks
119

Covered entities: Banks, members of the Tel Aviv Stock Exchange, portfolio managers,
insurers and insurance agents, provident funds and the companies who manage them,
providers of currency services, money services businesses and the Postal Bank
Number of STRs received and time frame: 27,332 (January November 2010)
Number of CTRs received and time frame: 960,316 (January November 2010)
Prosecutions: 19 (January August 2009)
Convictions: 13 (January August 2009)
Assets forfeited: criminally: civilly:
Combined total assets forfeited (criminally and civilly): 1,927,000 NIS (approximately
$550,571) January August 2010
With U.S.: YES
Israel has observer status with MONEYVAL (the Council of Europe Select Committee of
Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism).
Its most recent mutual evaluation can be found here: www.coe.int/moneyval.
A scathing report by the State Comptroller to the Knesset in May 2009 cited Israels failure to
effectively organize and fight the scourge of organized crime. While the police did get credit for
pursuing and arresting many leading mafia figures despite lack of resources, the report pointed
out that the State would have to do a better job of targeting and weakening the financial
foundation of organized crime, and there was considerable lack of cooperation, coordination of
activity, and sharing of information among relevant agencies, and ineffective leveraging of
current legislation, including anti-money laundering laws. With an established director of the
Israeli Money Laundering Authority in September 2010, the hope is that a key source of internal
lack of coordination which has plagued some sensitive operations will be reduced.
In July 2009, the Ministry of Finance announced that a special unit would be established
alongside the Tax Authority to coordinate the economic side of the fight against organized crime,
including better tracking of money laundering. As of November 2010, this unit still has not been
established. The Israeli National Police established the Lahav 433 special unit to target
organized crime, which had many notable successes in arresting senior members of crime
families. While significant resources and attention exist within the GOI to fight terrorist-related
money laundering, the lack of resource allocation and follow-through on non-terror related
financial crimes still lags significantly versus the scope of the problem. Organized crime has
existed in Israel for many years, although it is only within the last couple of years that there has
been formal acknowledgement by the authorities of the scope of the problem, or existence of
crime families. The State of Israel convicted a businessman and former mayoral candidate in
Jerusalem for laundering over 650 million shekels (approximately $183.8 million) .
Israels right of return laws for citizenship have meant that crime figures can and have
continued to operate in their home countries while having easy access into and out of the
country. Israeli citizenship for those making aliyah does not require strong ties to Israel such
120
as proof of continuous residency. Therefore it is not uncommon for some crime figures
suspected of money laundering to hold passports in a home country, a third country for business,
and Israel without necessarily having established ties here.
U.S. law enforcement has a robust relationship with the Israel Tax Authoritys (ITAs) Anti Drug
and Money Laundering Unit. A customs mutual assistance agreement between the U.S. and
Israel allows for the exchange of information between Customs services in support of joint
financial investigations, and the U.S. and ITA routinely coordinate to target illicit finance and
bulk cash smuggling between the two countries. In addition, U.S. and Israeli law enforcement
officials cooperate on extradition requests for individuals accused of crimes such as money
laundering. For example, Itzhak Abergil, a U.S.-designated Consolidated Priority Organization
Target (CPOT), and several other Israeli nationals recently lost their appeal fighting extradition
to the United States, where they now face a host of charges including money laundering, and
drug trafficking.
Italy
Italy is fully integrated into the European Union (EU) single market for financial services.
Money laundering is a concern because of the prevalence of homegrown organized crime groups
as well as criminal organizations from abroad, especially from Albania, Bulgaria, China, Israel,
Romania and Russia. Italy is both a consumer country and a major transit point for heroin
coming from South Asia through the Balkans en route to Western/Central Europe and, to a lesser
extent, the United States. The heavy involvement of organized crime groups in narcotics
trafficking complicates narcotics-related anti-money laundering (AML) activities because of the
sophistication of the laundering methods used by these groups. Italian and ethnic Albanian
criminal organizations work together to funnel drugs to Italy and, in many cases, on to third
countries. Additional important trafficking groups include Balkan organized crime entities, as
well as Nigerian, Colombian, and other South American trafficking groups. In addition to the
narcotics trade, laundered money originates from myriad criminal activities, such as alien
smuggling, contraband cigarette smuggling, counterfeit goods, extortion, human trafficking, and
usury. Financial crimes not directly linked to money laundering, such as credit card fraud,
Internet fraud, and phishing have increased over the past year. Phishing more than tripled from
2008 to 2009 (from 791 to 2,687 instances) for an overall amount increase from 3 to 8 million
euros (approximately $3.9 to $10.4 million). Italys financial intelligence unit (FIU) also
reported a reduction among suspicious cash transactions, but an increase in wire transactions and
money transfers.
Money laundering occurs to some extent in both the regular banking sector and the nonbank
financial system, including casinos, money transfer houses, and the gold market. There is a
substantial black market for smuggled goods in the country, but it is not believed to be funded
significantly by narcotics proceeds. Italys underground economy is an estimated 15-17 percent
of Italian GDP, totaling about 233 to 264 billion euros (approximately $304 billion to $344
billion), though a substantial fraction of this total is related to tax evasion of otherwise legitimate
commerce.
121
All serious crimes approach or list approach to predicate crimes: All serious crime
YES
Covered entities: Banks, Italian postal services, electronic money institutions, investment
firms, asset management companies, insurance companies, agencies providing tax collection
services, stock brokers, financial intermediaries, trust companies, lawyers, accountants,
auditors, and casinos
Covered entities: Banks, Italian postal services, electronic money institutions, investment
firms, asset management companies, insurance companies, agencies providing tax collection
services, stock brokers, financial intermediaries, trust companies, lawyers, accountants,
auditors, and casinos
Assets forfeited: criminally: Not available civilly: Not applicable
With U.S.: YES
Italy is a member of the Financial Action Task Force (FATF). Its most recent mutual evaluation
can be found here: http://www.fatf-gafi.org/dataoecd/52/29/36221355.pdf.
Given the relatively low number of STRs being filed by non-bank financial institutions, Italy
should improve its training efforts and supervision in this sector and should clarify
attorney/client privilege. Italy should take steps to allow for civil forfeiture of criminal proceeds.
Italian law enforcement agencies should take additional steps to understand and identify
underground finance and value transfer methodologies employed by Italys burgeoning
immigrant communities. Italy also should ensure its new regulations on PEPs are enforced.
Finally, Italy should continue its active participation in multilateral fora dedicated to the global
fight against money laundering and terrorist financing and its assistance to jurisdictions with
nascent or developing AML/CFT regimes.
122
Japan
Although the Japanese government continues to strengthen legal institutions to permit more
effective enforcement of anti-money laundering/counter-terrorist financing (AML/CFT) laws,
Japan still faces substantial risk of money laundering by organized crime (including Boryokudan,
Japans organized crime groups, and Iranian drug trafficking organizations), extremist religious
groups, and other domestic and international criminal elements. The major sources of money
laundering proceeds include drug trafficking, fraud, loan-sharking (illegal money lending),
remittance frauds, the black market economy, prostitution, and illicit gambling. In the past year,
there has been an increase in financial crimes by citizens of West African countries, such as
Nigeria and Ghana, who are resident in Japan. There is not a significant black market for
smuggled goods, and the existence of alternative remittance systems is believed to be very
limited in Japan.
Japan is not an offshore financial center. It has one free-trade zone, the Okinawa Special Free
Trade Zone, established in 1999 in Naha, to promote industry and trade in Okinawa. The zone is
regulated by the Department of Okinawa Affairs in the Cabinet Office. Japan also has two free
ports, Nagasaki and Niigata. Customs authorities allow the bonding of warehousing and
processing facilities adjacent to these ports on a case-by-case basis.
YES
Covered entities: Financial institutions, real estate agents and professionals, precious metals
and stones dealers, antique dealers, postal service providers, lawyers, judicial scriveners,
certified administrative procedures specialists, certified public accountants, certified public
tax accountants, trust companies
Covered entities: Financial institutions, real estate agents and professionals, precious metals
and stones dealers
Number of STRs received and time frame: 268,582 for January-November 2010
123

Assets forfeited: criminally: approximately 2.7 billion (approximately $33 million)
January 1-December 31, 2009 civilly: Not available
With U.S.: YES
Japans compliance with international standards is notably deficient on recommendations
specific to financial institutions. While Japan has legal requirements for customer due diligence
(CDD) programs in its institutions, the CDD provisions are severely lacking, and there is no
requirement for financial institutions to gather information on the purpose and intended nature of
the business relationship or to conduct ongoing due diligence on these relationships. Japan
should strengthen its CDD provisions to include specific requirements for due diligence by
financial institutions and to require financial institutions to collect information about business
accounts and transactions.
The Government of Japan (GOJ) has not implemented a risk-based approach to AML/CFT, and
there is no mandate for enhanced due diligence for higher-risk customers, business relationships,
and transactions. The current regulations do not authorize simplified due diligence, though there
are exemptions to the identification obligation on the grounds that the customer or transaction
poses no or little risk of money laundering or terrorist financing. Japan should implement a risk-
based approach to its AML/CFT regime.
The GOJs number of investigations, prosecutions, and convictions for money laundering in
relation to the number of drug and other predicate offenses is low, despite the GOJs many legal
tools and programs to combat these crimes. The National Police Agency (NPA) provides very
limited cooperation with other GOJ agencies, and most foreign governments, on nearly all
criminal, terrorism, or counter-intelligence-related matters. The NPAs minimal level of
cooperation has caused the law enforcement offices of nearly all other industrialized countries to
either leave Japan or significantly reduce their presence. The GOJ should develop a robust
program to investigate and prosecute money laundering offenses, and require enhanced
cooperation by the NPA with its counterparts in the GOJ and foreign missions.
The GOJs system does not allow the freezing of terrorist assets without delay, and in practice
the Ministry of Finance has never actually frozen or confiscated any terrorist assets. Japans
system does not cover assets raised by a non-terrorist for use by a terrorist or terrorist
organization, and reaches only funds, not other kinds of assets. The GOJ should enact legislation
to allow terrorist assets to be frozen without delay, and to expand the scope of assets to include
non-financial holdings.
Japan should provide more training and investigatory resources for AML/CFT law enforcement
authorities, establish an effective CDD regime, and consider implementing a system to report
large currency transactions. As Japan is a major trading power, the GOJ should take steps to
identify and combat trade-based money laundering. Japan should also become a party to the UN
Convention against Transnational Organized Crime and the UN Convention against Corruption,
124
and should fully implement the freezing obligations for terrorist funds, according to the UN
Convention for the Suppression of the Financing of Terrorism.
Jersey
The Island of Jersey, the largest of the Channel Islands, is an international financial center
offering a sophisticated array of offshore services. Jersey is a British crown dependency but has
its own parliament, government, and laws. The United Kingdom (UK) remains constitutionally
responsible for its defense and international representation but has entrusted Jersey to negotiate
and sign tax information exchange agreements directly with other jurisdictions and regulate its
own financial service sector. The financial services industry is a key sector, with banking,
investment services, and trust and company services accounting for approximately half of
Jerseys total economic activity. As a substantial proportion of customer relationships are
established with nonresidents, most of the illicit money in Jersey is derived from foreign criminal
activity. In particular, the Islands financial services industry continues to be vulnerable to the
laundering of the proceeds of foreign political corruption in industries such as oil, gas and
transportation.
NO
Covered entities: Banks; money exchanges and foreign exchange dealers; financial leasing
companies; issuers of credit and debit cards, travelers checks, money orders and electronic
money; securities brokers and dealers; safekeeping, trust, and portfolio managers; insurance
companies and brokers; fund products and fund operators; casinos; company service
providers; real estate agents; dealers in precious metals and stones and other high-value
goods; notaries, accountants, lawyers and legal professionals
Covered entities: Banks; money exchanges and foreign exchange dealers; financial leasing
companies; issuers of credit and debit cards, travelers checks, money orders and electronic
money; securities brokers and dealers; safekeeping, trust, and portfolio managers; insurance
companies and brokers; fund products and fund operators; casinos; company service
providers; real estate agents; dealers in precious metals and stones and other high-value
goods; notaries, accountants, lawyers and legal professionals
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Prosecutions: One prosecuted to judgment in 2010
Convictions: One in 2010
Assets forfeited: criminally: 7,454,250 (approximately $11,299,600) in 2010 civilly:
Not applicable
With U.S.: YES
In lieu of a mutual evaluation, a report was prepared by the International Monetary Funds
Financial Sector Assessment Program. The report can be found here:
Although not yet used in practice, Jersey has an ability to designate persons and freeze their
assets in conformity with UNSCR 1373. No formal procedure is in place to receive and assess
requirements based on a foreign request, as required by UNSCR 1373. Additionally, the
definition of funds subject to freezing does not expressly refer to assets jointly or
indirectly owned or controlled by designated or listed persons.
The Jersey Financial Services Commission (JFSC) website contains a link to the United
Kingdom Consolidated List of asset freeze targets, as designated by the United Nations,
European Union and United Kingdom. It does not use other means to distribute UN lists of
designated terrorists or terrorist entities.
Jersey does not enter into bilateral mutual legal assistance treaties. Instead it is able to provide
mutual legal assistance to any jurisdiction, including the US, in accordance with the Criminal
Justice (International Co-operation) (Jersey) Law 2001 and the Civil Asset Recovery
(International Co-operation (Jersey) Law 2007. Jersey has granted U.S. requests for assistance in
criminal matters. Jersey signed a Tax Information Exchange Agreement with the United States
in 2002. In 2009, the JFSC signed a statement of cooperation with the Board of Governors of the
Federal Reserve System, Office of the Comptroller of Currency, Federal Deposit Insurance
Corporation, and Office of Thrift Supervision. This statement is in addition to existing
memoranda of understanding with the Securities and Exchange Commission and Commodity
Futures Trading Commission.
Jersey is a Crown Dependency and cannot sign or ratify international conventions in its own
right unless entrusted to do so, as is the case with tax information exchange agreements. Rather,
the UK is responsible for Jerseys international affairs and, at Jerseys request, may arrange for
the ratification of any Convention to be extended to Jersey. The UKs ratification of the 1988
UN Drug Convention was extended to include Jersey in July 1998; its ratification of the UN
Convention against Corruption was extended to include Jersey in November 2009; and its
ratification of the International Convention for the Suppression of the Financing of Terrorism
was extended to Jersey on September 25, 2008. The UK has not extended the UN Convention
against Transnational Organized Crime to Jersey.
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Jersey authorities have a continuing concern regarding the increasing incidence of domestic drug
related crimes. The customs and law enforcement authorities devote considerable resources to
countering drug-related crime. Jersey should continue to maintain and enhance its level of
compliance with international standards to assist those efforts. The Financial Services
Commission should ensure its AML Unit has enough resources to continue to function
effectively, and to provide outreach and guidance to the sectors it regulates, especially the newest
entities required to file reports. The Commission also should distribute the UN lists of
designated terrorists and terrorist organizations to the obligated entities and not expect the
entities to stay current through their own Internet research.
Kenya
Kenya is a major money laundering country. Kenyas use as a transit point for international drug
traffickers continues to increase. The laundering of funds related to Somali piracy, corruption,
smuggling, the misuse of casinos and other assorted crimes is a substantial problem. Reportedly,
Kenyas financial system may be laundering over $100 million each year, including an
undetermined amount of narcotics proceeds and Somali piracy-related funds. As a regional
financial and trade center for Eastern, Central, and Southern Africa, Kenyas economy has large
formal and informal sectors. Although banks, wire services, and other formal channels execute
funds transfers, there are also thriving, unregulated informal networks of hawala and other
alternative remittance systems using cash-based, unreported transfers that the Government of
Kenya (GOK) cannot track. Expatriates, in particular the large Somali refugee population,
primarily use hawala to send and receive remittances internationally.
Covered entities: Financial and non-bank financial institutions engaging in one or more of
the following: accepting deposits; lending; financial leasing; transferring funds or value;
issuing and managing means of payment; financial guarantees and commitments; trading in
money market instruments, foreign exchange, exchange, interest rate and index funds,
transferable securities, and commodity futures; participation in securities issues; individual
and collective portfolio or fund management; safekeeping and asset administration;
underwriting and sales of life insurance and other investment related insurance; and/or money
and currency changing; also, casinos; real estate agencies; accountants; and dealers in
precious metals or stones
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Covered entities: Financial and non-bank financial institutions engaging in one or more of
the following: accepting deposits; lending; financial leasing; transferring funds or value;
issuing and managing means of payment; financial guarantees and commitments; trading in
money market instruments, foreign exchange, exchange, interest rate and index funds,
transferable securities, and commodity futures trading; participation in securities issues;
individual and collective portfolio management; safekeeping and administering cash or liquid
assets on behalf of other persons; investing, administering, or managing funds on behalf of
other persons; underwriting and placement of life insurance and other investment related
insurance; and/or money and currency changing; also, casinos; real estate agencies;
accountants; and dealers in precious metals or stones
Prosecutions: 0
Convictions: 0
With U.S.: YES
Kenya is a member of the Eastern and Southern Africa Anti-Money Laundering Group
(ESAAMLG), a Financial Action Task Force-style regional body. No mutual evaluation report
is available at this time.
The Proceeds of Crime and Anti-Money Laundering Act (PCAMLA), which came into force in
June 2010, has a number of deficiencies. While the PCAMLA does take an all crimes
approach to money laundering predicate offenses, the Act has never been used to prosecute any
crimes. Kenyas criminal justice system remains open to interference and corruption and
combating money laundering has not been given priority. The PCAMLA contains sanctions that
are proportionate and meet the international standard but have not yet been operationalized with
implementing regulations. The PCAMLA does not mention or criminalize terrorism or terrorist
financing. The legislation does not explicitly authorize the seizure of legitimate businesses used
to launder money. A number of amendments to the law appear to have made the PCAMLA less
powerful than earlier drafts. The Central Bank of Kenya (CBK) is relying on the future
Financial Intelligence Centre (FIC), the financial intelligence unit, for implementation, as the
police lack institutional capacity to handle complex financial crimes analysis and investigation.
Although authorized under the PCAMLA, the FIC has not yet been established.
The GOK did not report any money laundering or terrorist financing arrests, prosecutions, or
convictions from 2007 through 2010. Kenya lacks the institutional capacity, investigative skill,
and equipment to conduct complex investigations independently. There is also insufficient
political will to address these crimes. Kenya ranks 154 out of 178 countries on the 2010
Transparency International Corruption Perceptions Index.
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There is a black market for smuggled goods in Kenya, which serves as the major transit country
for Uganda, Tanzania, Rwanda, Burundi, northern Democratic Republic of Congo (DRC), and
Southern Sudan. While goods marked for transit avoid Kenyan customs duties, authorities
acknowledge these goods are often sold in Kenya. Many entities in Kenya are involved in
exporting and importing goods, including nonprofit entities. Trade-based money laundering is a
serious problem in Kenya. Trade goods are often used to provide counter-valuation in regional
hawala networks.
Kenya has no straightforward legal mechanism to freeze or seize criminal or terrorist accounts.
To demand bank account records or to seize an account, the police must present evidence linking
the deposits to a criminal violation and obtain a court warrant. Because of corruption and leaks,
the confidentiality of this process is difficult to maintain. The Central Bank does not distribute
UN lists to financial institutions. Instead, it refers all banks to the public lists posted on the
Internet. Two times per year, each bank is required to confirm to the Central Bank that they have
ensures none of their clients are on any of the lists.
Latvia
Latvia is a regional financial center that has a large number of commercial banks with a sizeable
nonresident deposit base. Latvia is among the European economies most affected by the global
financial turmoil. To ease the situation, the Government of Latvia (GOL) sought external
financial support and agreed to an international stabilization program. Despite the on-going
economic crisis in Latvia, total bank deposits have increased in the past year.
Authorities report that the largest sources of money laundered in Latvia are tax evasion and other
forms of financial fraud. Lesser sources include smuggling (primarily cigarettes) and public
corruption. Local officials do not consider proceeds from illegal narcotics to be a major source
of laundered funds in Latvia. According to regulators and law enforcement officials, most of the
laundered funds derived from financial fraud - and a sizeable portion of the funds derived from
tax evasion - originate outside of Latvia. Reportedly, Russian and Latvian organized crime
groups are active in Latvia, and authorities believe that a significant portion of all criminal
proceeds originating domestically is generated by these groups. Although Latvian regulatory
agencies closely monitor financial transactions to identify instances of terrorist financing, no
prosecutions or penalties have been initiated based on this monitoring in recent memory.
Four special economic zones provide a variety of significant tax incentives for manufacturing,
outsourcing, logistics centers, and the transshipment of goods to other free trade zones. These
zones are located at the free ports of Ventspils, Riga, and Liepaja, and in the inland city of
Rezekne near the Russian and Belarusian borders. Though there have been reports of cigarette
smuggling through the free trade zones, there have been no confirmed cases of the zones being
used for money laundering schemes or by terrorist financiers. The zones are covered by the
same regulatory oversight and enterprise registration regulations that exist for other areas.
Latvian officials maintain that the country is experiencing an overall decrease in financial
crimes. While acknowledging that the total amount of assets seized and frozen declined in 2010
(compared to prior years), they observe that transactions tend to be smaller, which they claim is
largely attributable to the economic crisis. Meanwhile, statistics for investigations initiated,
transactions reports received, and convictions all trended upward in 2010, despite resource
limitations which affected all regulatory and law enforcement agencies. GOL officials note that
Latvias updated Law on the Prevention of Laundering the Proceeds from Criminal Activity
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(Money Laundering) and of Terrorist Financing (amended December 2009) provides a more
robust statute for those investigating, interdicting and prosecuting financial crimes.
YES
Covered entities: Financial institutions, including credit institutions, life insurance companies
and brokers, private pension fund administrators, investment brokerage firms and
management companies, currency exchange offices, money transmission or remittance
offices; tax advisors, external accountants, sworn auditors, sworn notaries, advocates, and
other independent legal professionals; real estate agents or intermediaries; organizers of
lotteries or other gaming activities; persons providing money collection services; and other
legal or natural persons involved in trading real estate, transport vehicles, items of culture,
precious metals, precious stones and articles thereof, or as intermediaries in such transactions
Covered entities: Financial institutions, including credit institutions, life insurance companies
and brokers, private pension fund administrators, investment brokerage firms and
management companies, currency exchange offices, money transmission or remittance
offices; tax advisors, external accountants, sworn auditors, sworn notaries, advocates, and
other independent legal professionals; real estate agents or intermediaries; organizers of
lotteries or other gaming activities; persons providing money collection services; and other
legal or natural persons involved in trading real estate, transport vehicles, items of culture,
precious metals, and precious stones
Number of STRs received and time frame: 19,907 from January through November 2010
Number of CTRs received and time frame: 8,354 from January through November 2010
Prosecutions: 26 persons (involving 62 separate charges) from January through November
2010
Convictions: Seven (involving 14 individuals) from January through November 2010
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Assets forfeited: criminally: Approximately $2.46 million from January 1 through

November 30, 2010 civilly: None
With U.S.: YES
Latvia is a member of the Council of Europe Select Committee of Experts on the Evaluation of
Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a Financial
Action Task Force (FATF)-style regional body. Its most recent mutual evaluation report can be
found here:
http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Latvia_en.asp
Current laws do not require enhanced due diligence procedures for domestic PEPs, however,
they allow discretion to any institution or professional covered by KYC rules to apply enhanced
due diligence, based on its risk assessment for a particular customer.
Approximately $2.1 million was frozen by the FIU through November 30, 2010. Additionally,
approximately $472,000 in assets was seized by law enforcement officials during the same time
period.
In April 2005, the United States outlined concerns in a Notice of Proposed Rulemaking against
VEF Banka, under Section 311 of the USA PATRIOT Act. The bank was found to lack
adequate AML/CFT controls and was used by criminal elements to facilitate money laundering,
particularly through shell companies. In August 2006, the United States issued a final rule
imposing a special measure against the VEF Banka, as a financial institution of primary money
laundering concern. This measure is still in effect. Following the Latvian authorities revocation
of the banks license in May 2010, a lawsuit was filed asserting this action was not legal; that
suit was resolved in the Government of Latvias favor on November 15, 2010. According to
Latvian authorities, this resolution means the banks license cannot be reactivated.
In January 2010, legislative amendments establishing mechanisms for sharing assets with non-
EU countries and regarding the application of the EU Framework Decision on the application of
mutual recognition of confiscation orders took effect. Latvian officials have cooperated with
USG law enforcement agencies to investigate numerous financial narcotics-related crimes. The
Latvian Financial and Capital Market Commission regularly exchanges information with the
U.S. Securities and Exchange Commission. More broadly, officials in Latvia are also able to
provide assistance outside of the formal mutual legal assistance process in accordance with
current AML/CFT laws.
Law enforcement and regulatory agencies have a heavy workload and their budgets, salaries, and
in some cases, personnel have been reduced due to the severe economic crisis. Despite these
constraints, the Latvian FIU referred a total of 256 cases to other investigative agencies in 2010
(through November 30), roughly 80% more than in all of 2009. Of this total, approximately half
were related to cases involving tax evasion. In one notable recent case, the Latvian Financial
Police - a subordinate agency of the State Revenue Service - performed more than 60 searches in
one day in investigating a series of real estate deals allegedly involving Latvian and Russian
criminal groups and officials at Latvian credit institutions. This investigation is reportedly tied
to approximately $3.76 million in unpaid taxes and led to the freezing of 60 separate bank
accounts. Authorities note increased activity by regulators and law enforcement officials over
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the past year. They observe that questionable transactions tend to be smaller and conclude that
the overall monetary value of money laundering may be decreasing due to the economic crisis.
Lebanon
Lebanon is a financial hub for banking activities in the Middle East and eastern Mediterranean
and has one of the more sophisticated banking sectors in the region. Lebanon faces significant
money laundering and terrorist financing challenges. For example, Lebanon has a substantial
influx of remittances from expatriate workers and family members, estimated by the World Bank
at $8.2 billion per year. It has been reported that a number of Lebanese abroad are involved in
underground finance and trade-based money laundering (TBML) activities.
Laundered criminal proceeds come primarily from foreign criminal activity and organized crime.
There is some smuggling of cigarettes and pirated software, but the sale of these goods does not
generate large amounts of funds that are then laundered through the formal banking system.
There is a black market for stolen cars, counterfeit goods and pirated software, CDs, and DVDs.
The domestic illicit narcotics trade is not a principal source of money laundering proceeds.
Although offshore banking, trust and insurance companies are not permitted in Lebanon, the
government has provisions regarding activities of offshore companies and transactions conducted
outside Lebanon or in the Lebanese Customs Free Zone. Offshore companies can issue bearer
shares. There are also two free trade zones (FTZ) operating in Lebanon: the Port of Beirut and
the Port of Tripoli. FTZs fall under the supervision of the Customs Authority.
YES
Covered entities: Bank; money exchanges; private couriers who transfer currency for money
service businesses such as Western Union and Money Gram; and charitable and nonprofit
organizations
Covered entities: financial institutions, exchange offices, financial intermediation companies,
leasing companies, mutual funds, insurance companies, companies promoting and selling real
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estate and construction, and dealers and companies engaged in transactions for high-value
items (i.e., precious metals, antiquities, etc.)
Number of STRs received and time frame: 179 from January through November 2010
Prosecutions: 11 as of November 2010
Convictions: One between January and November 2010
With U.S.: NO
Lebanon is a member of the Middle East and North Africa Financial Action Task Force
(MENAFATF), a Financial Action Task Force-style regional body. Its most recent evaluation is
posted at www.menafatf.org
Lebanons financial intelligence unit (FIU), the Special Investigations Commission (SIC) is
seeking to finalize amendments to Central Bank Circular 83. One amendment would enhance
due diligence procedures for foreign PEPs. In the first 11 months of 2010, the SIC investigated
179 allegations of money laundering and terrorist financing activities, a sharp rise from 116
cases during all of 2009. Although the number of filed STRs and subsequent money laundering
investigations coordinated by the SIC have steadily increased, prosecutions and convictions are
still lacking.
Customs is required to inform the FIU of suspected TBML or terrorist financing; however, high
levels of corruption within Customs create vulnerabilities for TBML and other threats.
In addition to the names of suspected terrorist individuals and terrorist organizations on the
UNSCR 1267 Sanctions Committees consolidated list, the SIC circulates to all financial
institutions the list of Specially Designated Global Terrorists designated by the U.S. pursuant to
Executive Order 13224, and entities designated by the European Union under its relevant
authorities.
The Government of Lebanon (GOL) should encourage more efficient cooperation between
financial investigators and other relevant agencies such as Customs and the Internal Security
Force. Lebanon should increase efforts to disrupt and dismantle terrorist financing efforts,
including those carried out by Hizballah, which the GOL does not consider a terrorist group.
The GOL should consider amending its legislation to allow a greater ability to provide forfeiture
cooperation internationally and also provide authority for the return of fraudulent proceeds. The
GOL should pass legislation to mandate and enforce cross-border currency reporting. The
trading of bearer shares of unlisted companies remains a vulnerability, and the GOL should take
action to immobilize those shares as well as to criminalize tipping off.
In addition, there should be more emphasis on linking predicate offenses to money laundering
and not an over-reliance on suspicious transaction reports (STRs) filed by financial institutions to
initiate investigations. Existing safeguards do not address the issue of the laundering of
diamonds and value transfer through Lebanon directly or by Lebanese buying agents in Africa.
Lebanese law enforcement authorities should examine domestic ties to the international network
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of Lebanese brokers and traders who are commonly found in underground finance, trade fraud,
and TBML.
Finally, the GOL should become a party to the UN International Convention for the Suppression
of the Financing of Terrorism.
Liechtenstein
The Principality of Liechtenstein has a well-developed offshore financial services sector, liberal
incorporation and corporate governance rules, relatively low tax rates, and a tradition of strict
bank secrecy. All of these conditions significantly contribute to the ability of financial
intermediaries in Liechtenstein to attract both licit and illicit funds from abroad. Liechtensteins
financial services sector includes 16 banks, 102 asset management companies, 41 insurance
companies and 70 insurance intermediaries, 33 pension schemes and five pension funds, 395
trust companies and 27 fund management companies with approximately 411 investment
undertakings (funds), and 1,448 other financial intermediaries. The three largest banks control
85 percent of the market.
In recent years the Principality has made continued progress in its efforts against money
laundering. In 2009, the Liechtenstein Government recognized the OECD standard as the global
standard in tax cooperation and as a result renegotiated a series of Double Taxation Agreements
to include administrative assistance on tax evasion cases.
YES
Covered entities: Banks, securities and insurance brokers; money exchangers or remitters;
financial management firms and investment and real estate companies; dealers in high value
goods; insurance companies; lawyers; money exchangers or remitters; casinos; the
Liechtenstein Post Ltd.; or individuals acting as intermediaries in bank lending, money
transactions, trading of currencies or dealing in matters of wealth management and
investment advice
Covered entities: Banks, securities and insurance brokers, money exchangers or remitters,
financial management firms, investment companies, real estate companies, dealers in high
valued goods, insurance companies, lawyers, money exchangers or remitters, casinos, the
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Liechtenstein Post Ltd.; or individuals acting as intermediaries in bank lending, money

transactions, trading of currencies or dealing in matters of wealth management and
investment advice
Prosecutions: Seven between September 1, 2008 and October 18, 2010
Convictions: Two between September 1, 2008 and October 18, 2010
With U.S.: YES
Liechtenstein is a member of Moneyval, a Financial Action Task Force (FATF)-style regional
body. Its most recent mutual evaluation can be found here:
http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Liechtenstein_en.asp
Liechtenstein has shown an important effort to improve deficiencies in money laundering. The
2009 reporting year saw a new record high number of suspicious activity reports (SARs) at 235,
an increase of 24.3% compared to 189 SARs in 2008: 57.9% of the SARs were based on fraud;
11.5% on money laundering; and 30.6% on the other enumerated offense categories. No SARs
were submitted for suspected terrorist financing. In 2009, 74% of Liechtensteins SARs were
forwarded to the Office of the Public Prosecutor (in 2010, so far 82% have found their way to the
Office of the Public Prosecutor).
In practice, many of the customer characteristics considered high-risk in the international
standards, including non-resident and trust or asset management accounts, are considered
routine, subject only to normal customer due diligence procedures. Liechtenstein also decided
not to include entities with bearer shares, trusts and foundations, or entities registered in
privately-held databases in the high-risk category. The present SAR reporting requirements do
not clearly indicate whether attempted transactions relating to funds used in connection with
terrorism are covered.
There are reportedly no abuses of non-profit organizations, alternative remittance systems,
offshore sectors, free trade zones, bearer shares, or other specific sectors.
Luxembourg
Despite its standing as the second-smallest member of the European Union (EU), Luxembourg is
one of the largest financial centers in the world. It also operates as an offshore financial center.
Although there are a handful of domestic banks operating in the country, the majority of banks
registered in Luxembourg are foreign subsidiaries of banks in Germany, Belgium, France, Italy,
and Switzerland. While Luxembourg is not a major hub for illicit narcotics distribution, the size
and sophistication of its financial sector create opportunities for money laundering, tax evasion,
and other financial crimes.
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YES
Covered entities: Banks, pension funds, insurance brokers, undertakings for collective
investment (UCIs), management companies, external auditors, accountants, notaries, lawyers,
casinos, gaming establishments, real estate agents, tax and economic advisors, domiciliary
agents, and insurance providers
Covered entities: Banks, pension funds, insurance brokers, UCIs, management companies,
external auditors, accountants, notaries, lawyers, casinos, gaming establishments, real estate
agents, tax and economic advisors, domiciliary agents, and insurance providers
Prosecutions: 107
Convictions: 51
Assets forfeited: criminally: 26.8 million EUR (approximately $36 million) civilly: None
With U.S.: YES
With other governments/jurisdictions: Not available
Luxembourg is a member of the Financial Action Task Force. Its most recent mutual evaluation
can be found here: http://www.fatf-gafi.org/dataoecd/40/7/44655591.pdf
The Law of 3 March 2010 introduces the criminal liability of legal persons into the Penal Code
and into the Code of Criminal Procedure,
A Grand-Ducal Decree from February 2010 sets out several provisions concerning inter alia a)
prohibition of accounts opened in fictitious names and specifications on numbered accounts; b)
the verification of the powers of the natural person purporting to act on behalf of the customer; c)
the identification of the beneficial owner; d) the determination of whether the customer is acting
on behalf of another person; e) the scope of simplified due diligence; f) the regime of enhanced
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due diligence by specifying the measures and the risk management applicable to non face-to-face
clients and transactions, correspondent banking and politically exposed persons; and, g) the
specification of the obligation to report suspicious transactions.
The horizontal Law of 27 October 2010 entered into force on November 7, 2010. The Law
introduces a considerable number of changes to the existing AML/CFT provisions and proposes
to bring changes to as many as 20 existing Laws. The Law strengthens the existing AML/CFT
provisions by extending the coverage of the money laundering and terrorist financing offenses
and the asset forfeiture regime; clarifying and enhancing know-your-customer procedures;
increasing sanctions and penalties; providing a supervisory regime for real estate agents, dealers
in high-value goods, and trust and company service provider; establishing a cross-border
currency declaration system; and strengthening the authority and access to information of the
FIU.
Macau
Macau, a Special Administrative Region (SAR) of the Peoples Republic of China (PRC), is not
a significant regional financial center. Banks and insurance companies mainly offer traditional
products and services to the local population. However, as the worlds biggest gambling market
by revenue, benefiting from millions of visitors - mostly from nearby mainland China - Macau is
vulnerable to becoming a hub for the laundering of criminal proceeds. Reported annual gaming
revenues for 2010 were over $23.5 billion, although observers note that the amount of unreported
illegal side-betting could be as much as ten times reported revenues. In addition to the existence
of casinos, close proximity border with PRC and Macaus open economy, including lack of
controls on cross border physical movement of cash, are factors that create a risk of money
laundering and terrorist financing activities. The primary sources of criminal proceeds in Macau
are drug-related crimes, organized crime, and illegal gambling. Networks spanning across
Macaus boundary with mainland China account for much of the criminal activity.
Loosely-regulated gaming promoters, known as junket operators, profit from sourcing the
majority of Macaus VIP players who contribute to over 80 percent of gaming revenues. They
finance gamblers while in Macau, assuming credit risk and mingling customer funds in a
consolidated junket account, and supply them to the casinos on commission. Junkets are
increasingly popular among gamblers seeking anonymity and among casinos aiming to reduce
credit default risk. This inherent conflict of interest, together with anonymity provided through
use of the junket operator to transfer funds, presents significant challenges to anti-money
laundering measures in the gaming sector.
Ability to freeze terrorist assets without delay:: YES
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YES
Covered entities: Banks, credit and insurance entities, casinos, gaming intermediaries,
remittance agents and money changers, cash couriers, trust and company service providers,
realty services, pawn shops, traders in high-value goods (e.g., jewels, precious metals,
vehicles, etc.), notaries, registrars, commercial offshore service institutions, lawyers, auditors,
accountants, and tax consultants
Covered entities: All persons, irrespective of entity or amount of transaction
Number of STRs received and time frame: 1,220 in2010
Prosecutions: Two (January to September 2010)
Convictions: 0
Assets forfeited: criminally: $806,000* (January to November 2010) civilly: Not applicable
* Forfeited assets credited to Macau Government in 2010 from a 2008 conviction.
With U.S.: NO
Macau is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial Action
Task Force-style regional body. Its most recent mutual evaluation can be found here:
http://www.apgml.org/documents/docs/17/Macao%20ME2%20-%20FINAL.pdf
Although Macau has no formal law enforcement cooperation agreements with the United States,
informal cooperation between the two routinely takes place. U.S. government agencies work
closely with Macau counterparts in capacity building measures, information exchange, and
investigations. Macaus Financial Intelligence Unit (FIU) has been an essential component in
coordinating AML/CFT efforts. The Government of Macau (GOM) established the FIU in 2006
as a non-permanent government entity in order to avoid having to seek legislative approval. The
FIUs current term expires in August 2012. The GOM should permanently institutionalize it
without term limits, given the FIUs crucial role in sustaining a long-term AML/CFT
infrastructure.
The AML law does not require currency transaction reporting (CTR). However, gaming entities
are subject to threshold reporting under the supplementary guidelines of the Gaming Inspection
and Coordination Bureau (GICB). Currently, the GICB only shares statistical data on CTR
filings with the Financial Intelligence Unit (FIU). To enhance the FIUs ability to detect and
deter illicit activity, the FIU should have full access to CTR reports collected by GICB.
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Under current regulatory guidelines, financial institutions are obligated and do identify and
freeze suspect bank accounts or transactions. However, the GOM cannot provide mutual legal
assistance on AML/CFT under existing legislation. Macau should enhance its ability to support
international efforts by developing its legal framework to facilitate the freezing and seizure of
assets. The GOM can provide mutual legal assistance on criminal matters, even without a formal
agreement, and cooperation between the GOM and the United States routinely takes place.
Macau continues making considerable efforts to develop an AML/CFT framework that meets
international standards. It should continue to strengthen interagency coordination to prevent
money laundering in the gaming industry, especially by introducing robust oversight of junket
operators. It also should implement mandatory cross-border currency reporting requirements.
Mexico
Mexico is a major drug-producing and drug-transit country. Proceeds from the illicit drug trade
leaving the United States are the principal source of funds laundered through the Mexican
financial system. Other significant sources of illegal proceeds being laundered include
corruption, kidnapping, and trafficking in firearms and persons. Sophisticated and well-
organized drug trafficking organizations based in Mexico take advantage of the extensive U.S.-
Mexico border and the large flow of legitimate remittances to Mexico. The smuggling of bulk
shipments of U.S. currency into Mexico and the repatriation of the funds into the United States
via couriers, armored vehicles, and wire transfers remain favored methods for laundering drug
proceeds. The combination of a sophisticated financial sector, a large cash-based informal
sector, and insufficiently implemented regulatory controls further complicates the problem.
According to US authorities, drug trafficking organizations send between $19 and $29 billion
annually to Mexico from the United States. Mexico has seized over $457.5 million in bulk
currency shipments since 2002. In 2010, bulk-cash seizures amounted to $32.4 million in U.S.
dollars and 87.3 million (approximately $7 million) in pesos.
YES
Covered entities: Banks and other financial institutions, including mutual savings companies,
insurance companies, securities brokers, retirement and investment funds, financial leasing
and factoring funds, casas de cambio, and centros cambiarios (unlicensed foreign exchange
centers)
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Covered entities: Banks and other financial institutions, including mutual savings
companies, insurance companies, securities brokers, retirement and investment funds,
financial leasing and factoring funds, casas de cambio, and centros cambiarios.
Number of STRs received and time frame: 34,511 January through September 2010
Number of CTRs received and time frame: 3.2 million January through September 2010
Prosecutions: 162 from September 2009 to July 2010
Convictions: 17 (37 individuals) from September 2009 to July 2010
With U.S.: YES
Mexico is a member of the Financial Action Task Force (FATF), of which Mexico currently
holds the presidency (until July 2011), and the Financial Action Task Force for South America
(GAFISUD), a FATF-style regional body. Its most recent mutual evaluation can be found here:
http://www.fatf-
The number of casas de cambio has declined due to actions the Mexican authorities have taken
against those with serious AML/CFT violations and the closure of correspondent accounts in the
United States. Unlike regulated casas de cambio of which there are only nine there are over
4000 centros cambiarios, which are largely unregulated, and approximately 1200 registered
money transmitters. Commercial banks, foreign exchange companies, and general commercial
establishments also may offer money exchange services. The Government Secretariat issues
temporary licenses for national lotteries, casinos, horse races, and sport pools, but these
operations as well as lawyers, accountants, real estate agents, dealers of precious metals and
stones, and couriers are currently not subject to AML reporting requirements. Legislation to
regulate these non-financial entities has been proposed and remains pending in Congress.
The Government of Mexico (GOM) has made fighting money laundering and drug trafficking
one of its top priorities, and has made progress in combating these crimes over the course of
2010. Mexico has adopted a national anti-money laundering strategy, increased the capacity of
law enforcement and supervisors, and established a vetted police unit. The Mexican government
works very closely with U.S. law enforcement on transnational cases. From September 2009 to
July 2010, Mexican judges convicted 37 individuals on money laundering charges. Given that
from 2004 to 2007, only 17 criminals were convicted of money laundering, this is a notable
improvement.
However, Mexico continues to face challenges with respect to its AML/CFT regime, particularly
with its ability to prosecute and convict money launderers. The GOM should amend its
legislation to ensure that legal persons can be held criminally liable for money laundering and
terrorist financing. Mexico should also amend its terrorist financing legislation to fully comport
with the UN Convention for the Suppression of the Financing of Terrorism; and enact legislation
and procedures to freeze without delay terrorist assets of those designated by the UN
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1267Sanctions Committee. To create a more effective AML/CFT regime, Mexico should fully
implement and improve its mechanisms for asset forfeiture, control the bulk smuggling of
currency across its borders, monitor remittance systems for possible exploitation, improve the
regulation and supervision of money transmitters, unlicensed currency exchange centers, centros
cambiarios and gambling centers, and extend AML/CFT requirements to designated non-
financial businesses and professions. While some of these issues are addressed in pending AML
legislation, the fate of some of the proposals is uncertain as they must pass an opposition-
dominated Congress.
On June 15, 2010 the Finance Ministry announced new regulations imposing limits on U.S.
dollar (USD) transactions in Mexico. The caps, which were eased on December 3 for border
areas, are applicable to cash transactions from dollars to pesos, including deposits, credit
payments, and service fees. In addition to limiting transaction amounts for individuals, all USD
transactions are prohibited by the regulation for corporate entities and trusts (including account
and non-account holding entities), except for those which are account-holders located in border
or tourist areas, for which transactions are limited.
On August 26, 2010 the GOM stepped up its AML efforts and announced the National Strategy
for the Prevention and Elimination of Money Laundering and Financing for Terrorism along
with a package of bills currently pending in Congress. The package includes nine reforms and
three modifications to federal codes, as well as the creation of the Law to Prevent and Identify
Operations with Illegal Origins and Terrorism Financing.
Netherlands
The Netherlands is a major financial center and consequently an attractive venue for laundering
funds generated from illicit activities. These activities are often related to the sale of cocaine,
cannabis, or synthetic and designer drugs (such as ecstasy). Financial fraud, especially tax-
evasion, is believed to generate a considerable portion of domestic money laundering, and there
is increasingly less evidence of trade-based money laundering. There are no indications of
syndicate-type structures in organized crime or money laundering, and there is virtually no black
market for smuggled goods in the Netherlands. In 2009, the number of suspicious transfers was
at the lowest level in seven years. Although under the Schengen Accord there are no formal
controls on national borders within the European Union (EU), the Dutch authorities run special
operations in the border areas with Germany and Belgium to keep smuggling to a minimum.
Six islands in the Caribbean fall under the jurisdiction of the Netherlands. Bonaire, St.
Eustasius, and Saba are special municipalities of the country the Netherlands. Aruba, Curacao,
and St. Maarten are countries within the Kingdom of the Netherlands.
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Covered entities: Banks, exchange offices, casinos, money service businesses, lawyers,
notaries, tax specialists, accountants, life insurers, trust and company service providers, credit
card companies
Covered entities: Banks, credit institutions, securities institutions, investment institutions,
money transaction offices, providers of money transaction services, life insurers and
insurance brokers, credit card companies, casinos, traders in high-value goods, other
traders, accountants, lawyers, business economic consultants, tax consultants, real estate
brokers, estate agents, civil-law notaries, independent legal consultants, trust and asset
administrative companies
Prosecutions: 770 January through June 2009
Convictions: 328 January through June 2009
Assets forfeited: criminally: 50 million euro (approximately $64.9 million) in 2009
civilly: Not applicable
With U.S.: YES
The Netherlands is a member of the Financial Action Task Force (FATF). In lieu of an
evaluation by the FATF, the International Monetary Fund (IMF) prepared a Report on the
Observance of Standards and Codes (ROSC). The ROSC can be found here:
http://www.imf.org/external/pubs/ft/scr/2004/cr04312.pdf The Netherlands underwent a new
FATF evaluation in 2010; once finalized the evaluation report may be found here: http://www.fatf-
gafi.org/infobycountry/0,3380,en_32250379_32236963_1_1_1_1_1,00.html
In June 2008, the Netherlands Court of Audit published its investigation of the Government of
the Netherlands policy for combating money laundering and terrorist financing. The report
criticizes the Ministries of Interior, Finance, and Justice for: lack of information sharing among
them; too little use of asset seizure powers; limited financial crime expertise and capacity within
law enforcement; and light supervision of notaries, lawyers, and accountants. The ministries
agreed in large part with these conclusions and are taking steps to address them.
The Netherlands has established an unusual transaction reporting system. Designated entities
are required to file unusual transaction reports (UTRs) with the Netherlands financial
intelligence unit (FIU) on any transaction that appears unusual (applying a broader standard than
suspicious) or when there is reason to believe that a transaction is connected with money
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laundering or terrorist financing. The FIU investigates UTRs and forwards them to law
enforcement for criminal investigation; once the FIU forwards the report, the report is then
classified as a suspicious transaction report (STR).
The United States enjoys strong cooperation with the Netherlands in fighting international crime,
including money laundering. The Netherlands has ratified the bilateral implementing
instruments for the U.S.-EU mutual legal assistance agreement (MLAT) and extradition treaties.
The U.S.-EU MLAT came into force in February 2010. One provision included in the U.S.-EU
MLAT will facilitate the exchange of information on bank accounts. The Dutch Ministry of
Justice and the National Police work together with U.S. law enforcement authorities in the
Netherlands on operational money laundering initiatives.
While historically Dutch public prosecutors have moved to seize assets in only a small
proportion of money laundering cases, the recent assignment of two dedicated money laundering
prosecutors is slowly bringing change. The limited asset seizure is due to a shortage of trained
financial investigators and a compartmentalized approach where the financial analysts and
operational drug investigation teams often do not act in unison. In order to further increase the
confiscation of criminal assets, the Dutch Minister of Justice has introduced a new law, currently
before Parliament, that introduces confiscation as a standard procedure of any money driven
criminal case, increasing the capacity within law enforcement agencies to take such actions.
Financial institutions do not receive the UN list of designated terrorists directly from the Dutch
government, but the Dutch Central Bank holds them responsible for implementing the EU
Freeze list (the Combined Targeted Financial Sanctions List).
In 2009, the Public Prosecution Office served a summons to suspects of money laundering
offenses in 779 cases. The Netherlands Court of Audit reported in June 2009 that 87 percent of
money laundering cases referred to the Office of Public Prosecution resulted in a conviction.
In a notable conviction, a Rotterdam court sentenced seven men in April 2009 for cocaine
trafficking and laundering at least 22 million Euros (approximately $31,650,000). Authorities
confiscated twenty properties as well as $3.6 million and 900,000 Euros (approximately
$1,295,000) in cash. In August 2009, the Public Prosecutors office in Maastricht confiscated
134 properties and pieces of land from a real estate dealer suspected of money laundering,
cannabis cultivation and tax fraud. This is reportedly the largest judicial seizure of property ever
in the Netherlands.
Nigeria
Nigeria is a major drug trans-shipment point and a significant center for criminal financial
activity. Individuals and criminal organizations take advantage of the country's location, porous
borders, weak laws, corruption, lack of enforcement, and poor socio-economic conditions to
launder the proceeds of crime. The proceeds of illicit drugs in Nigeria derive largely from
foreign criminal activity rather than domestic activities. One of the schemes used by drug
traffickers to repatriate and launder their proceeds involves the importation of various
commodities, predominantly luxury cars and other items such as textiles, computers, and mobile
telephone units.
Proceeds from drug trafficking, oil theft or bunkering, bribery and embezzlement, contraband
smuggling, theft, corruption, and financial crimes, such as bank fraud, real estate fraud, and
identity theft, constitute major sources of illicit proceeds in Nigeria. Advance fee fraud, also
known as "419" fraud in reference to the fraud section in Nigeria's criminal code, remains a
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lucrative financial crime that generates hundreds of millions of illicit dollars annually. Money
laundering in Nigeria takes many forms, including investment in real estate; wire transfers to
offshore banks; political party financing; deposits in foreign bank accounts; use of professional
services, such as lawyers, accountants, and investment advisers; and cash smuggling. Nigerian
criminal enterprises use a variety of ways to subvert international and domestic law enforcement
efforts and evade detection.
CRIMINALIZATION OF TERRORIST FINANCING: NO
YES
Covered entities: Banks, community banks, mortgage institutions, development finance
banks, financial service companies, bureaux de change; the insurance, and securities and
investment industries; discount houses; finance companies; money brokerages; factoring,
project and export financing, and equipment leasing; debt and pension fund administration;
fund and investment management; private ledger services; project consultancy; estate agents;
lawyers; accountants; and, casinos
Covered entities: Banks, community banks, mortgage institutions, development finance
banks, financial service companies, bureaux de change; the insurance, and securities and
investment industries; discount houses; finance companies; money brokerages; factoring,
project and export financing, and equipment leasing; debt and pension fund administration;
fund and investment management; private ledger services; project consultancy; estate agents;
lawyers; accountants; and, casinos
Number of CTRs received and time frame: 13,575,712 in 2010
Prosecutions: Ten in 2010
Convictions: 0
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With U.S.: YES

Nigeria is a member of the Intergovernmental Action Group Against Money Laundering in West
Africa (GIABA), a Financial Action Task Force (FATF)-style regional body. Its most recent
mutual evaluation can be found here:
http://www.giaba.org/index.php?type=c&id=49&mod=2&men=2
Corruption continues to be a significant problem. Weak law enforcement and long delays within
the justice sector have hindered the progress of many prosecutions and investigations.
Additionally, Nigerian legislation does not provide safe harbor for financial institutions, or their
employees, who file STRs in good faith. The GON should amend its legislation to include safe
harbor provisions. In 2010, there were no money laundering convictions. The National
Assembly should adopt the proposed Special Courts Bill that will establish a special court with
specific jurisdiction and trained judges to handle financial crimes, and should consider passing
amendments to the Money Laundering Prohibition Act, 2004.
Nigeria does not have an asset forfeiture fund. Consequently, seized assets remain in the custody
of the seizing agency until they revert to the Government of Nigeria (GON). Due to lack of
proper accountability, forfeited assets are sometimes lost or stolen.
Nigerias failure to criminalize terrorist financing limits its ability to inhibit terrorism-related
activity. Additionally, Nigeria is not able to freeze terrorist assets in accordance with UNSCR
1267. The GON should enact appropriate laws, such as the Prevention of Terrorism Bill, to
correct these deficiencies.
Pakistan
Pakistan continues to suffer from financial crimes related to narcotics trafficking, terrorism,
smuggling, tax evasion, corruption, counterfeit goods and fraud. Pakistani criminal networks
play a central role in the transshipment of narcotics and smuggled goods from Afghanistan to
international markets. The abuse of the charitable sector, trade-based money laundering, use of
hawala/hundi, and physical cross-border cash transfers are common methods used to launder
money and finance terrorism in Pakistan and the region. Pakistans real estate sector is also a
popular destination for illicit funds, as many real estate transactions are poorly documented.
Pakistan does not have firm control of its borders with Afghanistan, Iran or China, which
facilitates the flow of smuggled goods to and from the Federally Administered Tribal Areas
(FATA) and Baluchistan. Some consumer goods transiting Pakistan duty-free under the Afghan
Transit Trade Agreement are funneled off to be sold illegally in Pakistan. As madrassas (Islamic
schools) lack oversight, they have been used as training grounds for terrorists and for terrorist
funding, which allows terrorist and militant organizations to receive financial support under the
guise of support of Islamic education.
Money laundering and terrorist financing often occur in Pakistan via an overlap of the
hundi/hawala alternative remittance system and the formal banking system. The State Bank of
Pakistan (SBP) requires all hawaladars to obtain licenses and meet minimum capital
requirements. Despite this requirement, few hawalas have been registered by the authorities, and
unlicensed hawaladars continue to operate illegally throughout Pakistan (particularly Peshawar
and Karachi). Fraudulent invoicing is typical in hawala/hundi counter-valuation schemes.
Legitimate remittances from Pakistani expatriates residing abroad now flow mostly through the
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formal banking sector and through licensed money transmitting businesses. According to
authorities, in calendar 2010, remittances through formal channels totaled $9.7 billion, out of an
estimated total of $14 billion.
YES
Covered entities: Banks (conventional and Islamic, micro-finance banks, development
finance institutions), exchange companies, securities markets, non-bank financial companies,
and insurance companies
Covered entities: Any institution accepting deposits; lending; financial leasing; issuing and
managing of means of payment, including credit and debit cards and electronic money;
transferring money or value; changing money or currency; participating in share issues and
providing services in relation to share issues; engaging in portfolio management; conducting
insurance transactions; or carrying out business as an intermediary
With U.S.: NO
Pakistan is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial
here: http://apgml.org/documents/docs/17/Pakistan%20MER%20-%20final%20version.pdf
146
Pervasive corruption and a lack of political will continue to be the two primary obstacles to an
effective anti-money laundering and counter-terrorist financing regime in Pakistan. Pakistan
ranks 143 out of 178 countries surveyed in Transparency Internationals 2010 International
Corruption Perception Index. Considering the extent of the financial crime and terrorist
financing challenges facing Pakistan, the absence of prosecutions and convictions is telling.
During 2010, the FATF identified Pakistan as a jurisdiction with significant AML/CFT
vulnerabilities. In response, the Pakistani government expressed high-level political
commitment to address deficiencies in its AML/CFT regime. Despite the passage of the Anti-
Money Laundering Act of 2010, legislative shortcomings are pervasive and should be addressed
accordingly. Additionally, Pakistans lack of police and judicial capacity contributes to its lack
of prosecutions and convictions. Pakistans financial intelligence unit (FIU) must be
strengthened and should be given operational autonomy. The FIU also needs a strong
information technology infrastructure to aid in the core functions of collection, analysis and
dissemination of financial intelligence. Suspicious and currency transaction reporting should be
fully implemented, comprehensive and actionable. Pakistani law enforcement should not,
however, become dependent on these reports to initiate investigations; rather, law enforcement
authorities should be proactive in pursuing money laundering and terrorist financing in their field
investigations. Restrictive information-sharing rules both within the interagency and with
foreign counterparts hinder international cooperation.
The Anti-Terrorist Act (ATA) allows the Pakistani government to ban a fund, entity or
individual on the grounds of involvement with terrorist activity and permits freezing of accounts.
Although legally allowed, there have been deficiencies concerning the timeliness and
thoroughness of the asset freezing regime and no formal system is in place to implement an asset
forfeiture regime. Section 11B of the ATA specifies that an organization is proscribed or listed
if and when the GOP has reason to believe it is involved with terrorism. In light of the role
private charities have played in terrorist financing, Pakistan must work quickly to conduct
outreach, supervise, and monitor charitable organizations and their activities. Meaningful action
should be taken to shut down internationally designated charities and prevent their reopening.
At present there is no requirement to declare inbound currency. Pakistans relatively strict
currency exportation requirements may lead hawaladars to export foreign currency out of the
country by other means, including smuggling it across the porous border with Afghanistan.
Pakistan should implement and enforce inbound and outbound cross-border currency reporting
requirements and focus greater efforts on identifying and targeting illicit cash couriers.
Panama
Panamas strategic geographic location and its economic openness make it a natural location for
laundering money derived from drug sales. However, location is only one reason for Panamas
attractiveness for money launderers. Panama is promoting itself as the new hub for Central
America because it is a leader in developing the physical and financial infrastructure that go with
that role. The Colon Free Trade Zone is the second largest free trade zone in the world and the
major airline, Copa, is expanding international and local flights. The financial sector is
increasing direct marketing efforts to attract regional financial institutions. This current and
future access to infrastructure and global connections attracts international clients who know
how to use financial and commercial accounts for money laundering.
During 2010, Panama made progress on the policy front in improving the transparency of its
financial system. The Government of Panama (GOP) is working diligently to ensure its removal
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from the OECDs grey list by signing a Tax Information Exchange Agreement (TIEA) with the
United States in November and signing Double Taxation Treaties (DTTs), which include similar
information exchange provisions, with 13 other OECD members. It is drafting new anti-money
laundering legislation and strengthening its financial intelligence units authority. Panama still
has unregulated parallel market exchanges like hawalas.
Unfortunately, the lack of enforcement of Panamanian banking and anti-money laundering laws
undercuts the policy progress the GOP has made. The very factors that contribute to Panamas
economic growth and financial sector sophistication the dollar-based economy, the large
number of offshore banks and shell companies, loosely regulated free trade zones, and sustained
growth in the ports and maritime industries are also mechanisms that are vulnerable to abuse
for money laundering and other illicit financial activities. Legislation that allows bearer share
corporations remains in effect and provides a near impenetrable corporate veil for shareholders.
In addition, corruption and weak regulatory bodies impede Panamas progress toward a more
transparent economy.
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.?: YES
YES
Covered entities: Banks, savings cooperatives, savings and mortgage banks, and money
exchanges; investment houses and brokerage firms; insurance and reinsurance companies;
fiduciaries; casinos; free trade zones; finance companies; and real estate brokers
Covered entities: Banks, cooperatives, and money exchanges, casinos, fiduciaries; insurance
companies, government entities focused on the lottery, and investment houses
MONEY LAUNDERINGCRIMINAL PROSECUTIONS/CONVICTIONS:
Convictions: 0
Assets forfeited (seized): criminally: $41 million in 2010 civilly: Not applicable
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With U.S.: YES
In July 2010 Panama became a member of the Financial Action Task Force on money laundering
in South America GAFISUD, a Financial Action Task Force (FATF)-style regional body. It
moved from the Caribbean Financial Action Task Force to the GAFISUD because the authorities
felt it shared more goals and problems with the GAFISUD members. Its most recent mutual
evaluation report can be found here:
http://www.cfatf-gafic.org/downloadables/mer/Panama_3rd_Round_MER_(Final)_English.pdf
Panama allows the use of bearer shares and shell company structures based on bearer shares to
provide privacy for share holders. These structures are very vulnerable to abuse by criminal
groups to launder funds. Panama took steps in 2010 to enhance the transparency of its financial
system. In addition to the signature of the TIEA with the U.S. and DTTs with other OECD
members, the GOP enacted legislation (Law 33 of July 2010) which requires banks and law
firms to share transaction and ownership information with the GOP and authorizes the sharing of
such information with foreign tax authorities pursuant to TIEA requests. Law 33 complements
existing know your customer requirements.
Panama allows the transfer of seized assets to other countries when the seizure occurs in the
course of an investigation conducted pursuant to a mutual legal assistance request. One asset
transfer example occurred in April 2010 in a New York investigation led by the United States
Department of Justice which led to the seizure of approximately $40 million worth of gold,
jewelry and assorted gemstones. The assets were seized by the GOP at the request of the U.S.
Government, and eventually repatriated to the U.S. Government in recognition of forfeiture
orders entered by the United States Attorneys Office for the Southern District of New York.
Panamas judicial system has not sentenced anyone under the current money laundering laws. In
October, 2010, a former municipal employee and accomplices were brought up on charges of
laundering approximately $2 million using a corporate entity. Other recent cases were either
dismissed or are still under investigation.
The Colon Free Trade Zone (CFZ) continues to be vulnerable to illicit financial activities in part
because of the following practices: the ease of third party payments made by an intermediary
apparently unrelated to the seller or purchaser; use of amended internal credit documents without
reasonable justification; customers not required to produce appropriate documentation (e.g.,
invoice) to support a requested transaction; significant discrepancies exist between transport
document information and the invoice; the long-awaited electronic transaction recording
information system is operational but not widely used a total of 5,000 keys to the electronic
system were provided to CFZ companies, but most continue to submit transaction information in
hard-copy format ; and, the ease with which bulk cash can be brought into Panama through the
main international airport by declaring it is for use in the CFZ.
The several anti-money laundering regulatory bodies do not communicate well. Panamas FIU
(the UAF), Superintendencia, Bankers Association, Customs, Consejo and the Judiciary
branches do not know each others roles and responsibilities.
The UAF is overworked and lacks adequate resources to process, let alone enforce the required
reporting. UAF is developing new software that will allow covered entities to submit their STRs
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electronically. Submissions currently must be made in hard copy with supporting electronic
documentation included in CD format.
Money laundering, in and of itself, is still not a priority with the Panamanian Customs Authority.
As long as money is properly declared, it flows easily across Panamas borders. U.S. law
enforcement agencies believe millions of dollars in cash and monetary instruments are declared
openly upon entry at Panamas airport without prompting further investigation by Panamas
Customs Authority. There were numerous press reports on corrupt customs/immigration
officials during 2010. In October, Panama passed Law 67 which, among other actions, now
requires the declaration of cash valued at $10,000 or over when leaving the country.
Panama cooperates with U.S. law enforcement agencies. There is increasing bilateral
cooperation such as maritime operations and the partnership of the Panamanian and US Trade
Transparency Units (TTU). Established in 2010 by U.S. Immigration and Customs Enforcement,
the Panamanian TTU is a vetted unit whose data mining efforts have provided investigative
assistance and insights for many GOP agencies, like the UAF and Panamas tax authority. Some
examples of the TTUs successes include: the discovery of a network of banks and exchange
houses that moved euros from Colombia, using Panamanian banks, to the U.S. and Europe; the
use of harmonized tariff codes for perfumes, video gaming and precious metals to identify
several companies in the CFZ involved in commercial fraud and possible trade-based money
laundering; and, information that reveals possible export tax incentive fraud.
Panamas regulated financial institutions are generally not believed to be willingly involved in
transactions related to the proceeds from serious crime. If the GOP continues its efforts to
improve its anti-money laundering legal framework, particularly eliminating bearer shares,
criminalizing tipping off, initiating efforts to increase prosecutions and convictions, and
creating a more transparent financial network, money laundering will become more difficult
within Panamas borders.
Paraguay
Paraguay is a major drug transit country and money laundering center. A multi-billion dollar
contraband trade, fed in part by endemic, institutional corruption, occurs in the border region
shared with Argentina and Brazil (the Tri-Border Area) and facilitates much of the money
laundering in Paraguay. While the Government of Paraguay (GOP) suspects proceeds from
narcotics trafficking are often laundered in the country, it is difficult to determine what
percentage of the total amount of laundered funds is generated from narcotics sales or is
controlled by drug trafficking organizations, organized crime, or terrorist groups operating
locally. Trade-based money laundering and the trafficking in counterfeit goods are widespread.
Weak controls in the financial sector, open borders, bearer shares, casinos, a surfeit of
unregulated exchange houses, lax or non-enforcement of cross-border transportation of currency
and negotiable instruments, ineffective and/or corrupt customs inspectors and police, and
minimal enforcement activity for financial crimes allows money launderers, transnational
criminal syndicates, and possible terrorist financiers to take advantage of Paraguays financial
system.
Ciudad del Este, on Paraguays border with Brazil and Argentina, represents the heart of
Paraguays underground or informal economy. The area is well known for arms and narcotics
trafficking and violations of intellectual property rights with the illicit proceeds from these
crimes a source of laundered funds. Some proceeds of these illicit activities have been supplied
to terrorist organizations. A wide variety of counterfeit goods, including household electronics,
150
cigarettes, software, computer equipment, video games, and DVDs are imported from Asia and
transported across the border into Brazil. A small amount remains in Paraguay for sale in the
local economy.
Many high-priced goods in Paraguay are paid for in U.S. dollars. In addition to bulk cash
smuggling, the non-bank financial sector, particularly exchange houses, is often used to move
illicit proceeds both from within and outside Paraguay into the U.S. banking system. Large sums
of dollars generated from normal commercial activity and suspected illicit commercial activity
are also transported physically from Paraguay through Uruguay and Brazil to banking centers in
the United States. The Government of Paraguay (GOP) is in the early stages of recognizing and
addressing the problem of the international transportation of currency and monetary instruments
derived from illegal sources, so determining what portion of U.S. dollars are related to
narcotrafficking is problematic.
As a land-locked nation, Paraguay does not have an offshore sector. However, Paraguays port
authority manages free trade ports and warehouses in neighboring countries' seaports, which are
used for the reception, storage, handling, and transshipment of merchandise transported to and
from Paraguay. Such free trade ports are located in Argentina (Buenos Aires and Rosario);
Brazil (Paranagua, Santos, and Rio Grande do Sul); Chile (Antofagasta and Mejillones); and
Uruguay (Montevideo and Nueva Palmira). About three-fourths of all goods entering and
exiting Paraguay are transported by barge on the large river system that connects Paraguay with
Buenos Aires (Argentina) and Montevideo (Uruguay).
YES
Covered entities: Banks, finance companies, insurance companies, exchange houses, stock
exchanges and securities dealers, investment companies, trust companies, mutual and pension
fund administrators, credit and consumer cooperatives, gaming entities, real estate brokers,
nongovernmental organizations, pawn shops, and dealers in precious stones, metals, art, and
antiques.
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Covered entities: Banks, finance companies, insurance companies, exchange houses, stock
exchanges and securities dealers, investment companies, trust companies, mutual and pension
fund administrators, credit and consumer cooperatives, gaming entities, real estate brokers,
nongovernmental organizations, pawn shops, and dealers in precious stones, metals, art, and
antiques
Convictions: 0
With U.S.: NO
Paraguay is a member of the Financial Action Task Force against Money Laundering in South
America (GAFISUD), a Financial Action Task Force-style regional body, of which Paraguay
assumed the pro tempore Presidency in December 2010. Its most recent mutual evaluation can
be found here: http://www.imf.org/external/pubs/ft/scr/2009/cr09235.pdf
The GOP took a huge step forward in regard to money laundering in June 2010 when it passed
an anti-terrorism law making terrorism financing an illegal act punishable by five to fifteen years
in prison.
Paraguay has shown a great deal of cooperation with U.S. law enforcement agencies. In March
2007, U.S. Immigration and Customs Enforcement created a Paraguay-based Trade
Transparency Unit (TTU) to aggressively analyze, identify and investigate companies and
individuals involved in trade-based money laundering activities between Paraguay and the
United States. As a result of the TTU, Paraguay has identified millions of dollars of lost revenue
and has helped target a criminal organization accused of supporting a terrorist entity.
Paraguay is a member of the 3 + 1 Security Group with the United States and the Tri-Border
Area countries. Paraguayan and U.S. law enforcement agencies cooperate on a case-by-case
basis. To date, the Paraguayan financial intelligence unit (FIU) has signed 29 MOUs with other
FIUs and is in the process of signing eight more.
Prosecutors handling financial crimes have limited resources to investigate and prosecute. In
addition, the selection of judges, prosecutors and public defenders is largely based on politics,
nepotism, and influence peddling. The lack of interagency cooperation throughout Paraguay,
and particularly within law enforcement, is an impediment to effective enforcement, prosecution,
and reporting efforts.
Asset forfeiture legislation is desperately needed in Paraguay. Paraguayan law does not provide
for freezing or seizure of many criminally derived assets. Law enforcement can only freeze
assets of persons under investigation for a crime in which the state risks loss of revenue from
furtherance of a criminal act, such as tax evasion. Enforcement agencies have limited authority
to seize or forfeit assets of suspected money launderers. Assets seized or forfeited are limited to
transport vehicles, such as planes and cars, and normally do not include bank accounts. When a
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seizure does occur, law enforcement authorities cannot dispose of these assets until a defendant
is convicted. A draft bill requesting power be granted to the Secretariat for the Prevention of
Money or Property Laundering (SEPRELAD) to administratively freeze assets without judicial
approval is currently being reviewed by the Paraguayan Presidency. However, the
administrative freeze would only be temporary unless either extended by a court order, or
finalized through a conviction.
The non-bank financial sector operates in a weak regulatory environment with limited
supervision. The organization responsible for regulating and supervising credit unions, the
National Institute of Cooperatives, lacks the capacity to enforce compliance. Exchange houses
are another non-bank sector where enforcement of compliance requirements remains limited.
There are no laws that regulate the amount of currency that can be brought into or out of
Paraguay. Required customs declaration reports are seldom checked. Customs operations at the
airports or overland entry points provide no control of cross-border cash movements.
Philippines
The Republic of the Philippines is not a regional financial center. Despite its developed financial
system, the Philippines is still a heavily cash-based economy, with substantial remittances from
its large expatriate community. Nonetheless, money launderers generally use formal financial
institutions to conceal proceeds of crime, and the weak national ID system makes implementing
a robust know your customer system difficult.
The principle sources of criminal proceeds are human and drug trafficking, official corruption,
and investment scams. The Philippines geographic position makes it attractive to human and
narcotics traffickers; and relatively open sea borders complicate enforcement of currency
controls. The Philippines continues to experience an increase in foreign organized criminal
activity from China, Hong Kong, and Taiwan. Insurgency groups operating in the Philippines
partially fund their activities through local crime and the trafficking of narcotics and arms, and
engage in money laundering through ties to organized crime. Smuggling, including bulk cash
smuggling, continues to be a problem.
There are free trade zones and four offshore banking units (OBUs). The Central Bank exercises
regulatory supervision over OBUs and requires them to meet reporting provisions and other
banking rules and regulations.
YES
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Covered entities: Banks, quasi banks, trust entities, and all other institutions and their
subsidiaries/affiliates supervised/regulated by the Philippine Central Bank; insurance and pre-
need companies; securities dealers, brokers/sales representatives, investment houses, mutual
funds, and other entities managing securities as agents/consultants; foreign exchange dealers,
money changers, remittance/transfer agents; and, entities dealing in valuable objects,
currency, financial derivatives, cash substitutes, and similar monetary instruments.
Covered entities: Banks, quasi banks, trust entities, and all other institutions and their
subsidiaries/affiliates supervised/regulated by the Philippine Central Bank; insurance and pre-
need companies; securities dealers, brokers/sales representatives, investment houses, mutual
funds, and other entities managing securities as agents/consultants; foreign exchange dealers,
money changers, remittance/transfer agents; and, entities dealing in valuable objects,
currency, financial derivatives, cash substitutes, and similar monetary instruments.
Number of STRs received and time frame: 6,298 (January 1-November 30, 2010)
Number of CTRs received and time frame: 35,924,241 (January 1-November 30, 2010)
Prosecutions: 33 as of November 30, 2010
Convictions: One as of November 30, 2010
Assets forfeited: criminally: None civilly: approximately $20,592,909 as of November 30,
2010
With U.S.: YES
The Philippines is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial
Action Task Force (FATF)-style regional body. Its most recent evaluation can be found here:
http://www.apgml.org/documents/docs/17/The%20Philippines%20DAR%20-
%20Final%20%20210809.pdf
The Philippines financial intelligence unit (FIU) investigations are severely constrained by
limited authority to access bank information. Except in instances of serious offenses such as
kidnapping for ransom, drugs and terrorism-related activities, the FIU is required to secure a
court order to examine bank deposit accounts related to unlawful activities enumerated in the
Anti-Money Laundering Act. In addition, a Supreme Court ruling prevents ex parte inquiry into
bank accounts. The FIU can, however, seek an ex parte freeze order from the Court of Appeals
before seeking authorization to inquire into bank deposits. The FIU also must obtain a court
order to freeze assets, including those of terrorists and terrorist organizations placed on the UN
1267 Sanctions Committees consolidated list and the lists of foreign governments. This
requirement is inconsistent with the international standard, which calls for the preventative
freezing of terrorist assets without delay from the time of designation. The Government of the
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Philippines (GOP) should enhance the FIUs access to financial records, and ensure it can
rapidly freeze terrorist assets.
Terrorist financing is not a stand-alone offense under Philippine law and therefore not a predicate
crime under the Anti-Money Laundering Act. A person who finances the commission of
terrorism may be prosecuted as a terrorist either as a principal by inducement pursuant to Article
17 of the Revised Penal Code or as an accomplice pursuant to Section 5 of the Human Security
Act. However, this approach requires a terrorist act to have occurred and does not encompass
general financial support to terrorist entities for other purposes (recruiting, training, social
welfare projects, etc.). The GOP should criminalize terrorist financing as a stand-alone offense,
and enhance training on its connection to money laundering.
The GOP has cooperated with the USG to share assets. However, the GOP should formalize
asset sharing arrangements, and clearly designate which agencies have authority over this
process.
Russia
The current administration aspires to establish the capital, Moscow, as an international financial
center. However, money laundering (ML) and terrorist financing (TF) are prevalent in Russia,
where there is a high level of organized crime and corruption. Domestic sources of laundered
funds include organized crime, evasion of tax and customs duties, fraud, public corruption, and
smuggling operations. Criminal elements from Russia and neighboring countries continue to use
Russias financial system and foreign legal entities to launder money. Criminals invest and
launder their proceeds in real estate and security instruments, or use them to buy luxury
consumer goods. Russia has been a repeated victim of terrorism, and some TF schemes involve
the misuse of alternative remittance networks by foreign and North Caucasian terrorist groups.
Despite making progress in combating financial crimes, Russia remains vulnerable to such
activities. Russias risk factors, such as the many large-scale financial transactions associated
with its vast natural resources; the states major role in the economy; the countrys porous
borders and its role as a geographic gateway between Europe and Asia; and chronic under-
funding and lack of capacity of regulatory and law enforcement agencies, create an environment
in which corruption and financial crimes flourish.
YES
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Covered Entities: Banks and credit institutions; Russia Post; payment acceptance and money
transfer services; securities, insurance and leasing companies; investment and non-state
pension funds; casinos and gambling outlets, dealers in precious metals and stones, real
estate agents, and pawnshops
Covered entities: Banks and credit institutions, securities markets, investment and pension
funds, Russian Post, insurance sector, leasing companies, dealers in precious metals and
stones, casinos, real estate agents, lawyers, notaries, and persons providing legal or
accounting services
Number of STRs received and time frame: 3,147,937 - January 1 to October 1, 2010
Number of CTRs received and time frame: 5,030,727 - January 1 to October 1, 2010
Prosecutions: 50 - January 1, 2010 to October 1, 2010; 208 in 2009
Assets forfeited: criminally: $9.6 million - 2009 civilly: Not available
With U.S.: YES
Russia is a member of the Financial Action Task Force (FATF). It also is a member of two
FATF-style regional bodies: the Committee of Experts on the Evaluation of Anti-Money
Laundering Measures and the Financing of Terrorism (MONEYVAL) and the Eurasian Group
on Combating Money Laundering and the Financing of Terrorism (EAG). Its most recent
http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Russia_en.asp
Through aggressive enactment and implementation of comprehensive anti-money
laundering/combating the financing of terrorism (AML/CFT) legislation, Russia has established
much of the legal and enforcement framework to deal with money laundering and terrorist
financing. On July 23, 2010, Russia adopted amendments that improve legislation on
AML/CFT. These amendments focus on three main areas: expanding AML/CFT coverage,
clarifying legal definitions, and improving administrative oversight for enforcement of
AML/CFT legislation. AML/CFT coverage has been expanded to subsidiary branches,
representative offices, and affiliates of financial institutions located outside the Russian
Federation. Furthermore, microfinance and short-term loans, which have grown significantly in
Russia, are now subject to AML/CFT laws. In addition to expanding AML/CFT coverage, the
new amendments clarify definitions critical to enforcement, such as beneficiary, organization
of internal control, conduct of internal control, customer, identification, and data
recording.
Amendments to the Code of Administrative Infringements improve regulatory oversight for
violation of AML/CFT legislation. These amendments broaden the authority of the FIU
(Rosfinmonitoring) and the Central Bank of Russia to conduct investigations of ML violations.
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Order 203, issued August 3 by Rosfinmonitoring, replaces Order 256 regarding the obligation to
conduct staff training on AML issues. Directive 967-R sets forth requirements for all non-
banking organizations concerning the development of ML internal control rules. The Code of
Administrative Offenses now specifies five types of ML safety violations, instead of grouping
all violations under one general offense.
It is too early to assess the impact of the 2010 amendments to the AML/CFT Law.
Implementing regulations have not been issued for critical components of the new law, such as
monitoring of affiliates operations outside the Russian Federation. Furthermore, it will take
time for private sector entities to incorporate the clarified definitions into their AML/CFT
practices. Reforms to the Code of Administrative Infringements do not address the full array of
regulatory oversight challenges for enforcement of AML/CFT liability.
Russia takes an all crimes approach to money laundering predicate offenses, with the
exception of six financial crimes, such as insider trading and stock market manipulation. To
address these exceptions, Law 241-FZ was passed on October 30, 2009 to criminalize insider
trading, stock market manipulation, and other similar crimes, but it does not take effect until
2014. Under Russian law, corporations cannot be held criminally liable; only a natural person is
subject to criminal liability. Additionally, tipping off by bank directors and employees is not
explicitly prohibited; the relevant section of the legislation only criminalizes revealing measures
taken against money laundering and terrorist financing. Some new payment mechanisms, such
as certain internet-based payment systems, are not covered by Russias AML/CFT controls.
Although Russia continues to establish and develop anti-corruption measures, corruption
continues to be a problem. The Government of Russia should continue to aggressively pursue
corruption; similarly, it should continue to pursue increased transparency in the financial sector
and ensure that domestic PEPs are monitored with the same scrutiny as foreign PEPs.
Russia has successfully spread awareness of AML/CFT in its financial sector and has weeded out
noncompliant financial institutions; however, significant discrepancies still remain between the
standards of international and local domestic banks. Further attempts should be made to bring
the AML efforts of all Russian banks to a more sophisticated level, including continued
enhancement of the compliance training and certification process.
Russia hosts and funds the Secretariat of the EAG, and through this effort has contributed to
improving the regions AML/CFT capacity. Russia should continue to play a leadership role
through sustained involvement in the regional and international bodies focusing on AML/CFT
regime implementation.
Singapore
Singapore is a significant international financial and investment center as well as a major
offshore financial center. The structural gaps in Singapores financial regulations make it
vulnerable to money launderers, and its financial crimes enforcement should be strengthened.
Stringent bank secrecy laws and the lack of routine currency reporting requirements make
Singapore a potentially attractive destination for drug traffickers, transnational criminals, foreign
corrupt officials, terrorist organizations and their supporters seeking to launder money or fund
terrorist activities. Authorities have taken action against Jemaah Islamiyah and its members and
have identified and frozen terrorist assets held in Singapore. Terrorist financing in general
remains a risk.
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As of December 2009, there were 38 offshore banks in operation, all foreign-owned. Singapore
has increasingly become a center for offshore private banking and asset management. Total
assets under management in Singapore increased 40 percent in 2009 to S$1.2 trillion
(approximately $861 billion). Singapore does not permit shell banks.
Singapore has eight free trade zones (FTZs), six for seaborne cargo and two for airfreight,
regulated under the Free Trade Zone Act. The FTZs may be used for storage, repackaging of
import and export cargo, assembly and other manufacturing activities approved by the Director
General of Customs in conjunction with the Ministry of Finance.
DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS
RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE
SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM
ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT
THE U.S.: NO
YES
Covered entities: Banks, financial institutions, finance companies, merchant banks, life
insurers, brokers, securities dealers, investment advisors, futures brokers and advisors, trust
companies, approved trustees, and money changers and remitters
Covered entities: Banks, auditors, financial advisors, capital market service licensees and
exempt persons, finance companies, lawyers, notaries, merchant banks, life insurers, trust
companies, approved trustees, real estate agents and money changers and remitters
Number of CTRs received and time frame: Not available. Reporting began in 2010.
Assets forfeited: criminally: $10,962,377 civilly: Not applicable
With U.S.: YES
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Singapore is a member of the Financial Action Task Force (FATF) and the Asia/Pacific Group
on Money Laundering, a FATF-style regional body. Its most recent mutual evaluation can be
found here: http://www.fatf-gafi.org/dataoecd/36/42/40453164.pdf
Singapores rigid bank secrecy is sometimes an impediment to effective international
cooperation in financial crimes enforcement. Less rigid bank secrecy restrictions would enhance
Singapores law enforcement cooperation in areas such as information sharing and conformance
to international standards and best practices.
Singapores legal system generally provides for the investigation and prosecution of money
laundering offenses. However, the implementation of these laws is uneven, particularly in
prosecuting money laundering as a stand-alone offense, and investigating foreign-sourced cases.
Singaporean police are fairly successful at identifying domestic predicate offenses, and include
ancillary money laundering charges as appropriate. Singapore should more aggressively pursue
domestic stand-alone money laundering offenses as well.
Singapores large, stable, and sophisticated financial center may be attractive as a conduit for
laundering proceeds generated by foreign criminal activities, including official corruption. The
Suspicious Transaction Reporting Office (STRO) and criminal investigators are encouraged to
identify money laundering that originates from foreign predicate offenses, and use stand-alone
money laundering charges to prosecute third-party offenders in Singapore.
Somalia
There is no recognized central government of Somalia. The Transitional Federal Government
(TFG) controls only portions of the country's capital and remote pockets of some regions. The
TFG is besieged by an insurgency that is led by international terrorist organization al-Shabaab.
Many ministries exist in name only, or have non-functioning, mostly unpaid staff. There is no
court system to speak of, and policing is rudimentary. The laws that exist - anti-money
laundering (AML), counter-terror financing (CFT), or otherwise - are effectively unenforced
given the security threats in Somalia and lack of capacity. Corruption is rampant. The financial
system in Somalia operates almost completely outside of any system of oversight, either on the
black market or via international money transfer companies/hawalas.
Due to its lack of a public regulatory system and its inaccessibility to international diplomats and
law enforcement, little is known about money laundering in Somalia. No information is
available on drug-related currency transactions channeling through Somali financial institutions.
Because Somalia's narcotics trade is centered on khat, a controlled substance in much of the
world but legal in Somalia, the proceeds are not illegal. Thus, it is not likely that khat money is
laundered in Somalia. Most khat proceeds go back to khat transporters based outside Somalia in
cash or via money transfer companies.
Pirates mostly launder their ransoms in northern Somalia, as well as perhaps in neighboring
countries, the Middle East, or Europe. The ransoms are delivered through cash drops to pirates
holding ships off Somalia's coast and divided among the pirates and those in their support
networks. Officials in Somalia's northern region of Puntland reportedly benefit from pirate
ransoms. They may facilitate ransom laundering or the transfer of ransom money to neighboring
countries or globally. In this manner, public corruption significantly facilitates money
laundering. Much of the ransom reportedly remains in cash. Anecdotal reports indicate that
ransom money finances real estate, luxury goods and businesses.
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Smuggling is rampant. Somalia has one of the longest land borders and the longest coastline in
Africa. The TFG and local officials control almost none of its borders, and goods flow into and
out of Somalia with no TFG knowledge. There are occasional but unverified reports of U.S.
dollar counterfeiting in al-Shabaab-controlled areas.
Somalia is a center for terrorism financing. Al-Shabaab is headquartered here and financed by
contributions from terrorist financiers outside the region, including from the global Somali
diaspora and business community. Some of the funds enter Somalia as cash, but a significant
portion likely passes through hawalas. Al-Shabaab operations are also financed through
extortion of private citizens and local businesses, revenue from seaports under their control, and
to an unknown extent by diversion of humanitarian and development assistance.
All serious crimes approach or list approach to predicate crimes: Not applicable
Number of STRs received and time frame: Not Applicable
Number of CTRs received and time frame: Not Applicable
Prosecutions: 0
Convictions: 0
With U.S.: NO
Somalia is a not a member of any Financial Action Task Force (FATF)-style regional body.
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Somalia has been without a functioning central government since 1991. There are no AML/CFT
laws, and the financial regulations that do exist go unenforced given the lack of policing and
investigative capacity and Somalia's insecurity. International standards, to the extent they are
recognized, are self imposed in Somalia by hawalas and other financial entities that must meet
international rules and regulations to do business elsewhere in the world. The lack of laws,
regulatory bodies, and enforcement mechanisms to counter money laundering and financial
crimes is likely due to a lack of capacity, and not a lack of political will. Obstacles to enacting
AML/CFT laws include the TFG's lack of territorial control, threats to the government by the al-
Shabaab insurgency, and lack of capacity and resources at all levels of government.
There were no arrests for money laundering in 2010. There was one interdiction of a suspected
terrorist financier's couriering cash illegally into Somalia. However, interdictions such as this
often result in an arrest, followed by indefinite detentions or releases given Somalia's inadequate
judicial system. In one case, incoming counterfeit U.S. dollars were seized at Mogadishu
International Airport. It is not clear what happened to the perpetrator.
There are no government entities charged with, or capable of tracking, seizing, or freezing illegal
assets or terrorist funds. Somalia has no laws requiring forfeiture of laundered assets or of
terrorist finances, and laws that could lend themselves to AML/CFT are not enforced.
The TFG has called on regional governments to help stem the flow of terrorist financing,
including requesting that local governments trace, freeze, and seize funds and finances related to
and supporting al-Shabaab. Somalia has cooperated with USG law enforcement on numerous
occasions, most recently investigations concerning suspected terrorists and kidnapping, piracy
and acts of terror committed inside and outside Somalia, but there has been no known assistance
with regard to investigations involving financial crimes.
Spain
Spain is a major European center of money laundering activities as well as an important gateway
for illicit narcotics entering Europe. Drug proceeds from other regions enter Spain as well,
particularly proceeds from Afghan hashish from Morocco, cocaine entering Latin America, and,
in significantly lower volume, heroin from Turkey and the Netherlands. Tax evasion in internal
markets and the smuggling of goods along the coastline also continue to be sources of illicit
funds in Spain. The smuggling of electronics and tobacco from Gibraltar remains an ongoing
problem. Passengers traveling from Spain to Latin America reportedly smuggle sizeable sums of
bulk cash. Colombian cartels allegedly use proceeds from drug sales in Spain to purchase goods
in Asia that are subsequently sold legally in Colombia or at stores run by drug cartels in Europe.
Credit card balances are paid in Spanish banks for charges made in Latin America, and money
deposited in Spanish banks is withdrawn in Colombia through ATM networks.
An unknown percentage of drug trafficking proceeds are invested in Spanish real estate,
particularly in the once-booming coastal areas in the south and east of the country, though less so
since the speculative real estate bubble burst in 2008. Up to twenty percent of the 500 euro notes
in use in Europe were reported to be in circulation in Spain during 2009, directly linked to the
purchase of real estate to launder money. Efforts by Spains tax authority to deter fraudulent
activity involving these large bank notes have kept the number of 500 euro notes at October 2008
levels (around 110 million notes).
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YES
(Please refer to the Department of States Country Reports on terrorism, which can be found at
http://www.state.gov/s/ct/rls/crt/)
Covered entities: Banks; mutual savings associations; credit companies; insurance
companies; financial advisers; brokerage and securities firms; pension fund managers;
collective investment schemes; postal services; currency exchange outlets; individuals and
unofficial financial institutions exchanging or transmitting money; realty agents; dealers in
precious metals, stones, antiques and art; legal advisors and lawyers; accountants; auditors;
notaries; and casinos
Covered entities: Banks; mutual savings associations; credit companies; insurance
companies; financial advisers; brokerage and securities firms; pension fund managers;
collective investment schemes; postal services; currency exchange outlets; individuals and
unofficial financial institutions exchanging or transmitting money; realty agents; dealers in
precious metals, stones, antiques and art; legal advisors and lawyers; accountants; auditors;
notaries; and casinos
Number of STRs received and time frame: 2,904 in 2008 (most recent available figures)
With U.S.: YES
Spain is a member of the Financial Action Task Force (FATF) and a cooperating and supporting
nation to the Caribbean Financial Action Task Force, a FATF-style regional body. Its most
recent mutual evaluation can be found here: http://www.fatf-
gafi.org/dataoecd/52/3/37172019.pdf
Spain has long been dedicated to fighting terrorist organizations, including ETA, GRAPO, and
more recently, al-Qaida. Spanish law enforcement entities have identified several methods of
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terrorist financing: donations to finance nonprofit organizations (including ETA and Islamic
groups); establishment of publishing companies that print and distribute books or periodicals for
the purposes of propaganda, which then serve as a means for depositing funds obtained through
kidnapping or extortion; fraudulent tax and financial assistance collections; the establishment of
cultural associations used to facilitate the opening of accounts and provide a cover for terrorist
financing activity; and alternative remittance system transfers.
Spanish authorities recognize the presence of alternative remittance systems. Informal non-bank
outlets such as locutorios (communication centers that often offer wire transfer services) are
used to move money in and out of Spain by making small international transfers for members of
the immigrant community. Spanish regulators also note the presence of hawala networks in the
Islamic community.
On April 29, 2010, Spain enacted Law 10/2010, on preventing money laundering and terrorist
financing. The new law incorporates and enhances Law 19/1993 on preventing money
laundering, and supersedes Law 12/2003, on preventing terrorist financing, which was never
fully implemented. Law 10/2010 introduces a risk-based approach to preventing money
laundering and terrorist financing and imposes stringent requirements on financial institutions as
well as designated non-financial businesses and professionals (DNFBP). Additionally,
implementation of Law 10/2010 will greatly enhance authorities capacity to combat terrorist
financing by placing greater requirements, with stiffer penalties for non-compliance, on financial
institutions and other businesses, and by strengthening monitoring and oversight. The new law
entered into force immediately; however, implementing regulations will not be approved until
2011; until then, many of its provisions are not being implemented.
The Government of Spain should clarify whether its laws allow civil forfeiture. Spain should
maintain and disseminate statistics on investigations, prosecutions, and civil asset forfeiture.
More generally, the government needs to review the resources available for industry supervision
and ensure that the FIU has the independence and resources it needs to effectively discharge its
responsibilities.
Switzerland
Switzerland is a major international financial center. Reporting indicates that criminals attempt
to launder illegal proceeds in Switzerland from a wide range of criminal activities conducted
worldwide. These illegal activities include, but are not limited to, financial crimes, narcotics
trafficking, arms trafficking, organized crime, terrorist financing and corruption. Although both
Swiss and foreign individuals or entities launder money in Switzerland, foreign narcotics
trafficking organizations, often based in Russia, the Balkans, Eastern Europe, South America and
West Africa, dominate the narcotics-related money laundering operations in Switzerland. The
countrys central geographic location, relative political, social, and monetary stability, the range
and sophistication of financial services it provides, and its long tradition of bank secrecy not only
contribute to Switzerlands success as a major international financial center, but also expose
Switzerland to potential money laundering abuse.
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YES
financial management firms, investment companies, insurance companies, casinos, or
individuals acting as intermediaries in bank lending, money transactions, trading of
currencies or dealing in matters of wealth management and investment advice
financial management firms, casinos, or individuals acting as intermediaries in bank lending,
money transactions, trading of currencies or dealing in matters of wealth management and
investment advice
Prosecutions: 269 individuals in 2009
Convictions: 172 individuals in 2009
With U.S.: YES
Switzerland is a member of the Financial Action Task Force (FATF). Its most recent mutual
evaluation can be found here: (http://www.fatf-gafi.org/dataoecd/53/52/43959966.pdf)
The Swiss money laundering regime is generally perceived to conform to international standards
and Swiss authorities are regularly updating their legislation. For instance, on October 1, 2010, a
new law on PEPs was issued and will reportedly be put into force on January 20, 2011.
Additionally, on January 1, 2011, the 26 cantonal codes of criminal procedure were replaced
with regulations in the Swiss Penal Code (Strafgesetzbuch), designed to unify procedural rules
and facilitate international cooperation.
The anti-money laundering (AML) law does not explicitly cover real estate brokers and dealers
of arts, antiquities and other high-value goods. Also, for terrorist financing reporting, Swiss
164
authorities distinguish the obligation to communicate (reasonable suspicion) and the right to
communicate (simple suspicion) given the degree of suspicion that prevails.
Under the law, measures for insurance companies and other financial intermediaries (excluding
banks) are not sufficiently elaborated. Additionally, several measures have been implemented
for anonymous companies, but some deficiencies remain as the competent authorities do not
have access to the register of the shareholders. Furthermore, a lack of transparency exists in
relation to foundations run by non professionals. The Swiss Financial Market Supervisory
Authority (FINMA) is not authorized to impose pecuniary sanctions; it can only issue
administrative ones. Furthermore, the breadth of the sanctions may not always take into account
the gravity of the crime.
In 2009, approximately 65% of filed suspicious activity reports (SARs) came from the banking
sector and seven SARs were linked to suspected terrorist financing. The number of SARs hit an
all-time high in 2009. Fraud (37%), embezzlement (10%), organized crime (9%), and money
laundering (9%) were the most common predicate/suspected criminal offenses, and nearly two-
thirds of all SARs were generated by media reports, third-party information and information
from prosecuting authorities. No particular money laundering issues about non-profit
organizations, alternative remittance systems, offshore sectors, free trade zones or bearer shares
have occurred.
Switzerland has returned more money to the countries of origin than any other financial centre,
amounting to a total of $1.8 billion. Furthermore, Switzerland is involved in many multilateral
fora related to asset recovery, corruption and development.
Taiwan
Taiwans modern financial sector, strategic location on international shipping lanes, and role as
an international trade hub make it vulnerable to transnational crimes, including money
laundering, drug trafficking, trade fraud, and smuggling. Though illegal in Taiwan, a significant
volume of informal financial activity takes place through unregulated non-bank channels. In
recent years Taiwan has taken steps to shift much of this activity into official, regulated financial
channels. Taiwan has five free trade zones and a growing offshore banking sector. There is no
significant black market for smuggled goods in Taiwan.
Domestic money laundering is generally related to tax evasion, drug trafficking, public
corruption, and a range of economic crimes. An emerging trend in money laundering is the use
of jewelry stores as a type of underground remittance system. Jewelers convert illicit proceeds
into precious metals, stones, and foreign currency, and generally move them using cross-border
couriers. The tradition of secrecy in the precious metals and stones trade make it difficult for law
enforcement to detect and deter money laundering in this sector.
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YES
Covered entities: Banks, credit co-operative associations, credit departments of Farmers
Associations and Fishermens Associations, Department of Savings & Remittances of
Chunghwa Post Co., securities firms, life insurance companies, and dealers in precious metals
and stones
Covered entities: Banks, credit co-operative associations, credit departments of Farmers
Associations and Fishermens Associations, Department of Savings & Remittances of
Chunghwa Post Co., securities firms, life insurance companies, jewelry stores, and members
of the National Real Estate Broking Agencies Association
Number of STRs received and time frame: 1,845 (January - December 2009)
Number of CTRs received and time frame: 2,963, 282 (January - December 2009)
Prosecutions: 39 persons (January - December 2010)
Convictions: 11 persons (January - December 2010)
Assets forfeited: criminally: NT$593.8 million (approximately $20.1 million) (January -
December 2010) civilly: Not applicable
With U.S.: YES
Taiwan is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial Action
Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here:
http://www.apgml.org/documents/docs/17/Chinese%20Taipei%20MER2_FINAL.pdf
Taiwan continues to strengthen its AML/CFT regime. However, the government has not passed
legislation that would address weaknesses in terrorist financing prevention measures, despite
numerous draft laws over the past several years. While the financing of terrorist activities in
Taiwan is a criminal offense, it is not an autonomous offense, and does not specifically cover the
financing and support of terrorist activities overseas. Taiwan should pass legislation to
criminalize terrorism and terrorist financing as an autonomous crime, and clarify that the law
covers such activities overseas.
Many types of designated non-financial businesses and professions are not subject to AML/CFT
requirements. The lack of reporting, customer due diligence and recordkeeping requirements
makes these entities particularly vulnerable to money laundering/terrorist financing activity.
166
Taiwan should take steps to amend its legislation and regulations, as necessary, to bring all
DNFBPs, as listed in the international standards, within the scope of its AML/CFT coverage.
Foreign politically exposed persons (PEPs) are not subject to enhanced due diligence. Taiwan's
Financial Supervisory Commission, the top financial regulator in Taiwan, is establishing a
databank for "high profile politicians" in an effort to prevent money laundering. Once
established, financial institutions will be required to identify, record, and report the identities of
high-profile customers engaging in significant or suspicious transactions.
Taiwan is unable to ratify UN conventions because of long-standing political issues. However, it
has enacted domestic legislation to implement the standards in the key AML/CFT UN
Conventions. Amendment of the money laundering legislation incorporated related laws to fully
implement the provisions of the Vienna, Palermo and terrorist financing conventions and
resolutions.
Taiwan should raise awareness of the vulnerabilities of non-profit organizations to terrorist
financing, and should exert more authority over this sector. The government should abolish all
shell companies and prohibit the establishment of new shell companies of any type. Given the
increasing threat of alternative remittance centers such as the precious metals and stones sector,
Taiwan's law enforcement should enhance investigations of underground financial systems.
Taiwan began to draft new legislation of the Mutual Assistance Act for Criminal Justice in
January of 2010. In the draft legislation, mutual legal assistance request doesnt need to initiate
judicial proceedings as precondition in requesting jurisdiction.
Thailand
Thailand is a centrally located, middle-income Southeast Asian country surrounded by
economically less vibrant neighbors along an extremely porous border. Thailand is vulnerable to
money laundering from its own underground economy as well as many categories of cross-
border crime, including illicit narcotics and other contraband smuggling. The Thai black market
includes a wide range of pirated and smuggled goods, from counterfeit medicines to luxury
automobiles. Money launderers and traffickers use banks, as well as non-bank financial
institutions and businesses to move the profits of narcotics trafficking and other criminal
enterprises. In the informal money changing sector there is an increasing hawala-type money
shop presence servicing Middle Eastern travelers in Thailand, most of them arriving to avail
themselves of the countrys comparatively inexpensive medical services. The Thai banking
regulations cover these institutions adequately, but effective oversight of the least formal
operations is difficult to achieve.
Thailand is a source, transit, and destination country for international migrant smuggling and
trafficking in persons, a production and distribution center for counterfeit consumer goods and,
increasingly, a center for the production and sale of fraudulent travel documents. Illegal gaming,
corruption, underground lotteries, and prostitution are all problems. Thailands criminal justice
system has low capacity to deal with these challenges but is improving.
THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.?: NO
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YES
Covered entities: Banks (including state banks), finance companies, securities dealers,
insurance companies, money exchanges and remitters, asset management companies, jewelry
and gold shops, automotive hire-purchase businesses or car dealers, real-estate
agents/brokers, antique shops, personal loan businesses, electronic card and credit-card
businesses, electronic payment businesses, and deposit/lending cooperatives
Covered entities: Banks (including state banks); finance and factoring companies; securities
dealers; insurance companies; money exchanges and remitters; asset management companies;
financial management firms; jewelry and gold shops; automotive hire-purchase businesses or
car dealers; real-estate agents/brokers; antique shops; personal loan businesses; electronic
payment, card and credit-card businesses; deposit/lending cooperatives; and the Ministry of
Interiors Department of Lands
Number of STRs received and time frame: 616,148 from January 1 October 31, 2010
Number of CTRs received and time frame: 522,318 from January 1 October 31, 2010
Prosecutions: 15 from October 2007 March 2008
Assets forfeited: criminal: None civil: $529,000 from October 2007 March 2008
With U.S.: YES
Thailand is a member of Asia/Pacific Group against Money Laundering (APG), a Financial
here: www.apgml.org/documents/docs/17/thailand
Thai law does not provide for enhanced due diligence for politically exposed persons nor does it
adequately prohibit tipping off, leaving financial institutions and their employees subject to
potential liability for filing STRs. Furthermore, there is no comprehensive cross-border currency
reporting or seizure system. The Government of Thailand should amend its legislation as
necessary to ensure these deficiencies are corrected.
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There have been no prosecutions since 2008. Both the AML Board and Transaction Committee
were dissolved several years ago. The Transaction Committee approves seizures for civil
forfeiture. Thailand has had no seizures for forfeiture since the Transaction Committee was
disbanded. A new AML Board was appointed in November, 2010.
Thailand should become a party to the UN Convention against Corruption and the UN
Convention against Transnational Organized Crime.
During 2010, the FATF identified Thailand as a jurisdiction with significant AML/CFT
vulnerabilities. In response, the Thai government expressed high-level political commitment to
address deficiencies in its AML/CFT regime, and reported taking steps to address these
deficiencies. For example, the Thai government drafted a proposed Counter-Terrorism
Financing Act which, in part, would criminalize the collection or provision of funds for the
purpose of supporting terrorist acts or organizations. However, important actions are still
pending, including passage of key amendments and regulations which will augment the current
AML/CFT regime. The Thai FIU lacks clear leadership, with a new Secretary General yet to be
appointed. For AMLO to become a sophisticated agency able to take substantial casework, it
will need to build extensive institutional capacity and political will.
Turkey
Turkey is an important regional financial center, particularly for Central Asia and the Caucasus,
as well as for the Middle East and Eastern Europe. While the vast majority of Turkeys economy
is legitimate, money laundering is a problem. Turkey continues to be a major transit route for
Southwest Asian opiates moving to Europe. However, narcotics trafficking is only one source of
the funds laundered in Turkey. Other significant sources of laundered funds include invoice
fraud and tax evasion, and to a lesser extent, smuggling, counterfeit goods, and forgery.
Terrorist financing and terrorist organizations with suspected involvement in narcotics
trafficking and other illicit activities are also present in Turkey. Money laundering takes place in
banks, non-bank financial institutions, and the underground economy. The World Bank
estimates as much as 30 percent of the economic activity is derived from unregistered
businesses. Money laundering methods in Turkey include: the large-scale cross-border
smuggling of currency; bank transfers into and out of the country; trade fraud; and the purchase
of high-value items such as real estate, gold, and luxury automobiles. Turkish-based traffickers
transfer money and sometimes gold via couriers, the underground banking system, and bank
transfers to pay narcotics suppliers in Pakistan or Afghanistan. Funds are transferred to accounts
in the United Arab Emirates, Pakistan, and other Middle Eastern countries.
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YES
Covered entities: Banks and regulated financial institutions, including the Central Bank;
securities companies; post office banks; Islamic financial houses; and exchange offices
Covered entities: Banks; card issuers; consumer finance, financial leasing and factoring
companies; insurance companies, lotteries, vehicle sales outlets, antique dealers, pension and
mutual funds, exchange houses, dealers in art, high-value goods, precious stones and precious
metals, and precious metals exchange intermediaries, notaries, sports clubs, real estate
companies, capital and portfolio management companies, postal service and cargo companies
Number of STRs received and time frame: 9,823 in 2009; 6,718 through August 24, 2010
Prosecutions: 279 from 1997-2009; 15 in 2009
Convictions: 22 from 1997-2009; three in 2009
With U.S.: YES
Turkey is a member of the Financial Action Task Force (FATF). Its most recent mutual
evaluation can be found here: http://www.fatf-gafi.org/dataoecd/14/7/38341173.pdf
Turkish Criminal Court records are closed to the public. According to statistics from Turkeys
financial intelligence unit, Financial Crimes Investigation Board (MASAK), between 2005 and
2009, 342 money laundering cases were referred for further investigation, but only 22 cases
resulted in convictions. In 2009, the 15 prosecutions resulted in three convictions. There are
still 188 cases pending in the courts. Moreover, all of the convictions are reportedly under
appeal. There is a lack of specialization and understanding of anti-money laundering/counter-
terrorist financing (AML/CFT) provisions among relevant authorities, which has contributed to
the high number of acquittals in money laundering cases.
Turkey and the United States cooperate closely on narcotics and money laundering
investigations.
Although legal persons are subject to criminal liability, the sanctions against such entities are
limited. There is no mandated enhanced due diligence for PEPs; banks are simply encouraged to
give closer scrutiny to such customers.
The Government of Turkeys (GOT) non-profit sector is likely vulnerable to abuse by terrorist
financing. The Turkish government is still developing the investigative skills, law enforcement
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expertise, financial oversight and outreach necessary to effectively counter this threat. The
nonprofit sector is not audited on a regular basis for counter-terrorist finance vulnerabilities and
does not receive adequate AML/CFT outreach or guidance from the GOT. The General Director
of Foundations issues licenses for charitable foundations and oversees them. However, there are
a limited number of auditors to cover more than 70,000 institutions.
Laws related to terrorist financing are limited to acts committed by members of organizations
operating against the Turkish Republic, so the collection, donation and movement of funds by
terrorist organizations would not be prohibited if the funds could not be linked to a specific
domestic terrorist threat. While the GOT has implemented UNSCR 1267, it has not yet
established punishment or sanctions for institutions that fail to observe a freezing order, and it
has not yet established procedures for delisting entities or unfreezing funds. Additionally, the
GOT has not taken steps that would allow it to freeze the assets of entities designated by other
jurisdictions, as required under UNSCR 1373.
In February 2010, the FATF identified Turkey as a jurisdiction with significant AML/CFT
vulnerabilities, chief among them Turkeys lack of adequate criminalization of terrorist financing
and national asset freezing mechanisms. The GOT adopted an action plan designed to commit to
a timeline for implementing new legislation. A draft law on the Prevention of Terrorism
Financing intended to address the CFT deficiencies is currently within the Prime Ministry
where it is being reviewed by experts.
Ukraine
In Ukraine, high risks of money laundering have been identified in foreign economic activities,
credit and finance, the fuel and energy industry, and the metal and mineral resources market.
Illicit proceeds are primarily generated through corruption; fictitious entrepreneurship; fraud;
trafficking in drugs, arms, and persons; organized crime; prostitution; and tax evasion. Various
laundering methodologies are used, including real estate, insurance, bulk cash smuggling, and
through financial institutions. There is a significant market for smuggled goods and a large
informal financial sector. These activities are linked to the evasion of taxes and customs duties.
YES
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Covered entities: Banks, non-bank financial institutions, insurance companies, gambling

institutions, credit unions, depositories, securities traders, registers, pawnshops, mail service
operators and other money transfer services, real estate traders, certain traders of precious
metals and stones, notaries, auditors, lawyers and leasing providers
Covered entities: Banks, non-bank financial institutions, insurance companies, gambling
institutions, credit unions, depositories, securities traders, registers, pawnshops, mail service
operators and other money transfer services, real estate traders, certain traders of precious
metals and stones, notaries, auditors, lawyers , and leasing providers.
Number of STRs received and time frame: See below
Convictions: 48 from January 1 to April 1, 2010
Assets forfeited: criminally: $94 million in 2009 civilly: Not applicable
With U.S.: YES
Ukraine is member of MONEYVAL, a Financial Action Task Force (FATF)-style regional body.
Its most recent mutual evaluation can be found here:
http://www.coe.int/t/dghl/monitoring/moneyval/Evaluations/Evaluation_reports_en.asp
On May 18, 2010, Ukraine's Parliament passed amendments to Ukraines anti-money laundering/
counter-terrorist financing (AML/CFT) legislation. The amendments are a significant step
forward. The new legislation replaces and significantly improves Ukraines basic AML/CFT
Law, and amends relevant portions of the criminal code to bring them into greater compliance
with international standards. Among other improvements, the May 18, 2010 amendments
require enhanced due diligence procedures for PEPs. However, the procedure of informing
primary financial monitoring agencies about the list of foreign PEPs is yet to be developed.
While it does not appear that significant narcotic proceeds are laundered through Ukraines
financial institutions, the rise of cybercrime and related transnational organized crime would
suggest that significant amounts of U.S. currency are diverted to this region.
Through their regulatory agencies, banks and non-bank financial services receive the U.S.
designations of suspected terrorists and terrorist organizations under Executive Order 13224 and
other U.S. authorities and are instructed to report any transactions involving designated
individuals or entities. According to the new anti-money laundering law, the financial institution
or FIU has the power to suspend suspicious transactions for a limited amount of time (up to 14
days). Afterwards, assets may only continue to be held if law enforcement bodies initiate a
criminal case or if it can be established that the assets are related to terrorist activity, in which
case they can be held indefinitely. The need to initiate criminal cases might provoke serious
delays that would allow the assets to be transferred before action could be taken to freeze the
accounts. Draft legislation will address additional details of terrorist assets freezing, such as an
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enhanced definition of terrorist assets, procedures for seizing assets of individuals designated on
international terrorist lists; and the procedural prerequisites to seizing terrorist assets.
While Ukraine has signed and ratified the necessary treaties, in many instances they are not
applied or are applied poorly. Furthermore, while Ukraine is a party to UNCAC and UNTOC,
the provisions of these conventions are not implemented or are not working properly in Ukraine.
Ukraine has remained on the FATF list of countries with strategic deficiencies since February
2010. The remaining deficiencies include poor terrorist asset freezing provisions, inadequate
criminalization of market manipulation and insider trading, and the absence of corporate criminal
liability for terrorist financing. Ukraine also lacks any functional regime for locating or seizing
forfeitable assets.
Although, the current legislation does not provide for autonomous prosecution of money
laundering, Ukraine continues to take measures to improve it. There were two cases of
autonomous investigations and prosecutions of money laundering. Ukraine should place
additional emphasis on developing these capabilities.
Most importantly, while Ukraine's legislation has been significantly modernized, Ukraine lacks
examples of successful prosecutions of money laundering. This is due to the lack of specialized
expertise among prosecutors in handling complex financial cases, corruption within law
enforcement and the courts, and poor coordination among prosecutors, investigators, and the
FIU. Ukraine has taken steps to improve the technical expertise of the Prosecutor Generals
Office through training of its law enforcement and prosecutors. This training should be
continually developed, placing an emphasis on the systematic use of financial investigations, the
use of existing tools and investigative techniques, analysis and use of computer techniques, and
by providing relevant guidance.
United Arab Emirates

The United Arab Emirates (UAE) is an important financial center in the Middle East region.
Dubai, in particular, is a major international banking and trading center. The country also has a
growing offshore financial center and 38 free trade zones. The UAEs robust economic
development, political stability, and liberal business environment have attracted a massive influx
of people, goods, and capital, which may leave the country susceptible to money laundering
activities. The UAE also is vulnerable to money laundering due to its geographic location as the
primary transportation and trading hub for the Persian Gulf States, East Africa, and South Asia;
longstanding trade relations with Iran; its expanding trade ties with the countries of the former
Soviet Union; and lagging relative transparency in its corporate environment.
The potential for money laundering is exacerbated by the large number of resident expatriates
(roughly 80 - 85 percent of total population) who send remittances to their homelands. Given the
countrys proximity to Afghanistan, where most of the worlds opium is produced, narcotics
traffickers are increasingly reported to be attracted to the UAEs financial and trade centers.
Other money laundering vulnerabilities in the UAE include cash couriers, hawala, trade based
money laundering, smuggling, the real estate sector, and the misuse of the international gold and
diamond trade.
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YES
Covered entities: Banks, money exchange houses, finance companies, and any other financial
institutions operating in the UAE
Covered entities: Banks, money exchange houses, finance companies, and any other financial
institutions operating in the UAE
With U.S.: NO
The United Arab Emirates is a member of the Middle East and North Africa Financial Action
Task Force (MENAFATF), a Financial Action Task Force (FATF)-style regional body. Its most
recent mutual evaluation can be found here:
http://www.menafatf.org/images/UploadFiles/UAEoptimized.pdf
The Government of the UAE has shown some progress in enhancing its AML/CFT program. In
August 2009, the Central Bank issued a circular instructing local banks not to handle accounts
belonging to politically exposed persons (PEPs). Information sharing between the UAEs
financial intelligence unit (FIU), the Anti-Money Laundering and Suspicious Cases Unit
(AMLSCU), and some foreign FIUs has substantially improved.
Several areas requiring further action by the UAE Government (UAEG) remain. The UAE
should increase the capacity and resources it devotes to investigation of AML/CFT both
federally at the AMLSCU and at emirate-level law enforcement. AMLSCU needs to improve its
timely financial information sharing capability to conform to international standards. Law
enforcement and customs officials should proactively develop cases based on investigations,
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rather than wait for STR-based case referrals from the AMLSCU. Law enforcement and
customs officials should conduct more thorough inquiries into large declared and undeclared
cash imports into the country, as well as require - and enforce - outbound declarations of cash
and gold utilizing existing smuggling laws. Currently the law only requires the disclosure of
inbound cash above the delineated threshold.
Although UAE legislation includes a provision prohibiting tipping off, the provision is very
narrow and does not appear to address the disclosure of STR filings to third parties.
Additionally, the Central Bank regulations appear to require institutions to notify customers of
suspicions regarding their accounts. This would appear to contradict any tipping off
prohibitions.
All facets of trade-based money laundering should be given greater scrutiny by UAE customs
and law enforcement officials, including customs fraud, the trade in gold and precious gems,
commodities used as counter-valuation in hawala transactions, and the misuse of trade to launder
narcotics proceeds. The UAEG should expand follow-up with financial institutions and the
Ministry of Social Affairs regarding regulations on charities to ensure their registration at the
federal level. The UAE should also continue its regional efforts to promote sound charitable
oversight. The cooperation between the Central Bank and the offshore Dubai Financial Services
Authority (DFSA) needs improvement, with lines of authority clarified. Moreover, the absence
of meaningful statistics across all sectors is a significant hindrance to the assessment of the
effectiveness of the AML/CFT program.
United Kingdom
The United Kingdom (UK) plays a leading role in European and world finance and remains
attractive to money launderers because of the size, sophistication, and reputation of its financial
markets. Although narcotics are still a major source of illegal proceeds for money laundering,
the proceeds of other offenses, such as financial fraud and the smuggling of people and goods,
have become increasingly important. The past few years have seen an increase in the movement
of cash via the non-bank financial system, as banks and mainstream financial institutions have
tightened their controls and increased their vigilance. The use of bureau de change, cash
smugglers (into and out of the UK), and traditional gatekeepers (including solicitors and
accountants) to move and launder criminal proceeds has been increasing. Also on the rise are
credit/debit card fraud, use of the internet for fraud, and the purchasing of high-value assets to
disguise illegally obtained money. A July 2009 Home Office report estimates that the total cost
of the economic and social harm caused to the UK by serious organized crime is around GPB
68.4 billion (approximately $107.75 billion) per year.
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YES
Covered entities: Financial and credit institutions, independent legal professionals, auditors,
accountants, tax advisors, auditors, insolvency practitioners, estate agents, casinos, high value
goods dealers, and trust or company service providers
Covered entities: Financial and credit institutions, independent legal professionals, auditors,
accountants, tax advisors, auditors, insolvency practitioners, estate agents, casinos, high value
goods dealers, and trust or company service providers
Number of STRs received and time frame: 240,582 (October 1, 2009 September 30, 2010)
With U.S.: YES
The United Kingdom is a member of the Financial Action Task Force (FATF). Its most recent
mutual evaluation can be found here: www.fatf-gafi.org/dataoecd/44/8/44048060.pdf
The United Kingdom has a comprehensive range of anti-money laundering/countering the
financing of terrorism (AML/CFT) laws. It is an active participant in multilateral efforts to meet
AML/CFT threats. The UK engages in efforts to freeze the assets of persons who commit
terrorist acts, as required by the United Nations. In January 2010, the United Kingdom Supreme
Court held that the government had earlier exceeded its authority by imposing asset freezing
orders that went beyond the requirements of Security Council Resolution 1373. The Supreme
Court reinstated temporary asset freezing regulations as an interim measure following the
judgment. In December 2010, the United Kingdom replaced the temporary provisions with a
new legislative framework that raises the burden of proof for freezing assets from reasonable
suspicion to reasonable belief.
Uruguay
Uruguay remains vulnerable to the threats of money laundering (ML) and terrorist financing
(TF). Uruguay has a highly dollarized economy with about 80 percent of deposits and 70
percent of credits denominated in U.S. dollars. The U.S. dollar is often used as a business
currency and many goods and services, including real estate and vehicles, are quoted and sold in
176
dollars. Officials from the Uruguayan police and judiciary assess that there is a growing
presence of Mexican and Colombian criminal organizations in the Southern Cone and are
concerned they could begin operating in Uruguay. Drug dealers are slowly starting to participate
in other illicit activities like car theft and trafficking in persons. The Government of Uruguay
(GOU) acknowledges there is a growing risk of money laundering in the real estate sector, in
free zones and in bureaus that administer corporations, and in late 2010, passed a decree to
improve controls in those areas.
The vast majority of money laundering cases that have become public have been related to drugs.
Uruguay has porous borders with Argentina and Brazil, and there is a market for smuggled goods
that is greatly determined by price differentials between Uruguay and its neighbors. Trade-based
money laundering is likely to occur but specialists do not identify it as a major source of risk.
The six offshore banks operating in Uruguay are subject to the same laws, regulations, and
controls as local banks, with the GOU requiring they be licensed through a formal process that
includes a background investigation of the principals. Offshore trusts are not allowed. Bearer
shares may not be used in banks and institutions under the authority of the Central Bank, and any
share transactions must be authorized by the Central Bank.
There are 13 free trade zones (FTZs) located throughout the country. While most are dedicated
solely to warehousing, two were created exclusively for the development of the paper and pulp
industry, and three accommodate a wide variety of tenants offering a wide range of services,
including financial services. Some of the warehouse-style FTZs have been used as transit points
for containers of counterfeit goods bound for Brazil and Paraguay. A decree passed in
November 2010 discourages shell companies from establishing a presence in FTZs.
NO
Covered entities: Banks, currency exchange houses, stockbrokers, pension funds, insurance
companies, casinos, art dealers, real estate and fiduciary companies, lawyers, accountants,
and other non-banking professionals that carry out financial transactions or manage
commercial companies on behalf of third parties
177
Covered entities: Banks; currency exchange houses; stockbrokers and pension funds;
insurance companies; businesses that perform safekeeping, courier or asset transfer services;
professional trust managers; investment advisory services; casinos; real estate brokers a nd
intermediaries; notaries; auctioneers; dealers in antiques, fine art and precious metals or
stones; FTZ operators; and natural or judicial persons who carry out transactions or
administer corporations on behalf of third parties
Number of STRs received and time frame: 195 - January 1December 16, 2010
Number of CTRs received and time frame: One - January 1December 16, 2010
Prosecutions: Four in 2009
With U.S.: YES
The GOU is a member of the Organization of American States Inter-American Drug Abuse
Control Commission (CICAD) Experts Group to Control Money Laundering. Uruguay is a
member of the Financial Action Task Force on Money Laundering in South America
(GAFISUD), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual
evaluation can be found here: http://www.gafisud.info/pdf/InformeEMUruguay09.pdf
Uruguay has significantly upgraded its anti-money laundering legislation in recent years and
improved its enforcement actions. Law 18.494, passed in 2009, gives national authorities more
flexibility to fight money laundering and terrorist financing, and Decree 226/10, passed in
December 2010, includes detailed provisions for non-financial sector entities obliged to report
suspicious transactions. Decree 226/10 stipulates risk-based customer due diligence (CDD)
procedures, sets de minimis procedures, and establishes CDD thresholds in specific activities:
casinos (over $3,000), and art dealers and auctioneers (over $15,000). The decree also provides
for enhanced due diligence (EDD) for high risk customers, such as those involving non-residents
from countries that fail to apply international standards. Real estate brokers must apply EDD
procedures in transactions over $15,000 and notaries and auctioneers must apply them in
transactions over $200,000 (or over $100,000 in cash). While Decree 226/10 does not
distinguish between local and foreign PEPs, it appears to be focused on locals. A list of about
5,000 local PEPs is available on the Central Banks website.
Decree 226/010 mandates obligated entities to establish internal procedures that would enable
them to detect goods or transactions related to individuals or terrorist organizations included in
the UN list. The financial intelligence unit publishes the UN 1267 Sanctions Committee list on
its website but does not distribute it to financial institutions. It does not send the USG lists of
terrorists to financial institutions but includes them in its database and runs name checks against
it. There have been no reported cases or investigations related to terrorist financing.
In 2010 Uruguay joined the Egmont Group of Financial Intelligence Units. Tax evasion is not an
offense in Uruguay, which limits cooperation possibilities because the financial intelligence unit
cannot share tax-related information with its regional counterparts.
178
In an ongoing high-profile case, 14 people were indicted in September 2006 for a money
laundering charge tied to the largest cocaine seizure in Uruguay at that time; in June 2008 the
kingpin was convicted and in November 2009 five individuals, including a well known attorney,
were prosecuted. Through 2009 the GOU had frozen assets totaling $20 million, of which $17
million were frozen in 2009 alone. The Anti-Money Laundering Secretariat seeks to create
awareness about the importance of seizing assets as well as imprisoning criminals.
The GOU should enhance its regulation and monitoring of the real estate sector and sports
industries.
Venezuela
Venezuela is one of the principal drug-transit countries in the Western Hemisphere. Cocaine
produced in Colombia is trafficked through Venezuela to the Eastern Caribbean, Central
America, the United States, Europe, and western Africa. In 2010, Mexican drug trafficking
organizations gained an increased presence in Venezuela. Venezuelas proximity to drug
producing countries, weaknesses in its anti-money laundering regime, limited bilateral
cooperation, and alleged substantial corruption in law enforcement and other relevant sectors
continue to make Venezuela vulnerable to money laundering. The main sources of money
laundering are proceeds generated by drug trafficking organizations and illegal transactions that
exploit Venezuelas currency controls and its various exchange rates
Money laundering occurs through commercial banks, exchange houses, gambling sites,
fraudulently invoiced foreign trade transactions, smuggling, real estate (in the tourist industry),
agriculture and livestock businesses, securities transactions, and trade in precious metals.
Venezuela is not a regional financial center and does not have an offshore financial sector,
although many local banks have offshore affiliates in the Caribbean. Trade-based money
laundering, such as the black market peso exchange, through which money launderers furnish
narcotics-generated dollars in the United States to commercial smugglers, travel agents,
investors, and others in exchange for Colombian pesos, remains a prominent method for
laundering regional narcotics proceeds. It is reported that many black market traders ship their
goods through Margarita Islands free port.
YES
179
Covered entities: The Fund of Deposit Guaranty and Bank Protection; universal,
commercial, mortgage, investment, and development banks; representative offices of foreign
banks; leasing financers; money market funds; savings and loan entities; exchange houses;
foreign exchange operators; credit card issuers; societies and funds of reciprocal guaranties;
municipal institutes or credit businesses; insurance companies; casinos; real estate agents;
construction companies; car dealerships; hotels, travel agents, and the tourism industry; and
dealers in precious metals and stones
Covered entities: The Fund of Deposit Guaranty and Bank Protection, banks, leasing
financers, money market funds, savings and loan entities, exchange houses, financial groups,
frontier exchange operators, credit card issuers, societies and funds of reciprocal guaranties,
municipal institutes or businesses of credit, funds and societies of capital risk, representative
offices of foreign banks, insurance and reinsurance companies, casinos, real estate agents,
construction companies, car dealerships, hotels and the tourism industry, travel agents, and
dealers in precious metals and stones
Number of STRs received and time frame: 1,086 through October 31, 2010
Prosecutions: Ten 2006-2010
Convictions: Seven 2006-2010
With U.S.: NO
Venezuela is a member of the Caribbean Financial Action Task Force (CFATF), a Financial
here:
http://cfatfgafic.org/downloadables/mer/Venezuela_3rd_Round_MER_%28Final%29_English.p
df
There is little evidence the Government of Venezuela (GOV) has made enforcement of anti-
money laundering laws and regulations a priority. Reportedly, many, if not most, judicial and
law enforcement officials remain ignorant of anti-money laundering countermeasures.
Additionally, although the law includes many financial institutions and designated non-financial
businesses and professions as covered entities, no implementing regulations have been developed
and, in practice, the majority of entities are not subject to mandatory reporting and customer due
diligence requirements. The insurance and securities sectors and the Venezuelan Association of
Currency Exchange Houses, which counts all but one of the countrys money exchange
companies among its membership, voluntarily comply with the STR reporting requirements.
In 2010, the FATF identified Venezuela as a country with strategic anti-money laundering and
counter-terrorist financing (AML/CFT) deficiencies. The resulting action plan includes
180
adequately criminalizing terrorist financing; establishing and implementing adequate procedures

to identify and freeze terrorist assets; ensuring a fully operational and effectively functioning
financial intelligence unit; implementing adequate customer due diligence guidelines for all
sectors, including the securities sector; and establishing adequate STR reporting obligations for
money laundering and terrorist financing.
Corruption is a very serious problem in Venezuela and appears to be worsening. Transparency
Internationals Corruption Perception Index for 2010 ranks Venezuela at 164 of 178 countries on
the index. Venezuela has laws to prevent and prosecute corruption, and accepting a bribe is a
criminal act. However, the judicial system has been ineffective historically and is accused of
being overtly politicized. The current regime of price and foreign exchange controls also has
provided opportunities for corruption. Trade-based money laundering and value transfer is a
significant problem in Venezuela. In March 2010, 16 individuals were indicted in Miami on
charges of conspiracy to launder narcotics proceeds. The case involved trade-based money
laundering focused on Venezuela.
Venezuela and the United States signed a Mutual Legal Assistance Treaty (MLAT) in 1997. The
Financial Crimes Enforcement Network (FinCEN) suspended the exchange of information with
Venezuelas National Financial Intelligence Unit (UNIF) in January 2007 due to the
unauthorized disclosure of information provided by FinCEN, and the relationship has not
resumed to date. In 2009 and 2010, there was no money laundering information exchange
between Venezuela and the United States.
Zimbabwe
Zimbabwe is not a regional financial center, but it faces problems related to money laundering
and official corruption. Regulation and enforcement in the financial sector are weak, mainly due
to a lack of trained regulators and investigators and limited asset seizure authority. These
deficiencies expose the country to money laundering abuses, but there are no data on the extent
of money laundering in Zimbabwe. The exposure is greatest within the financial sector, which
includes both formal and informal institutions. Commercial banks, building societies,
moneylenders, insurance brokers, realtors, and lawyers in Zimbabwe are all vulnerable to
exploitation by money launderers. Financial crime may also be magnified by opportunities to
smuggle diamonds.
Anti-money laundering laws are sometimes abused for political purposes. More broadly,
corruption sometimes impedes application of Zimbabwe's anti-money laundering mechanisms.
Nearly all transactions in Zimbabwe are now carried out with either the U.S. dollar or the South
African rand. The Government of Zimbabwe's (GOZ) switch to this "multi-currency regime"
dramatically reduced opportunities for money laundering and financial crime, thereby
eliminating multiple exchange rates and opaque foreign-exchange controls. Of late, the
parliamentary committee on mining has held officials to account for GOZ actions in the Marange
diamond fields, and the minister of finance has implemented a new law to improve
accountability at the Reserve Bank of Zimbabwe (RBZ).
181
YES
Covered entities: Commercial banks, acceptance houses, discount houses, money transfer
agencies, bureaux de change, insurance companies, and finance houses
Covered entities: Banks, acceptance houses, discount houses, money transfer agencies,
bureaux de change and cash dealers, insurance companies, finance houses, lawyers,
accountants, pension funds, casinos, moneylenders, estate agents, import/export businesses,
and trust management and service providers
Prosecutions: None in 2010
Convictions: None in 2010
Assets forfeited: criminally: None in 2010 civilly: None in 2010
With U.S.: NO
Zimbabwe is a member of the Eastern and Southern Africa Anti-Money Laundering Group
(ESAAMLG), a Financial Action Task Force (FATF)-style regional body. Its most recent
http://www.esaamlg.org/userfiles/Zimbabwe_detailed_report.pdf
Zimbabwes law provides for freezing and forfeiture of assets, and the banking system can
quickly freeze deposits. Law enforcement and regulatory agencies lack the resources to combat
money laundering vigorously. For example, financial institutions typically receive information
related to designations from private sources, not from government agencies. The capacity for
broader freezing or forfeiture of terrorist assets is untested.
Zimbabwe does have broad legislation on mutual legal assistance in both civil and criminal
cases, and there are no legal or practical impediments to rendering assistance, provided both
Zimbabwe and the requesting country criminalize the activity.
182
The United States, Canada, Australia, and the European Union have imposed targeted financial
sanctions and travel restrictions on political leaders and others believed to have been complicit in
human rights abuses.
183

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United States Department of State

Bureau for International Narcotics and Law

ICRG International Cooperation Review Group

USAID Agency for International Development

Legislative Basis for the INCSR

to develop interactive computer-based programs for distribution, translated into several

International Law Enforcement Academies (ILEAs)

Board of Governors of the Federal Reserve System (FRB)

Federal Bureau of Investigation (FBI), Department of Justice

Federal Deposit Insurance Corporation (FDIC)

Financial Crimes Enforcement Network (FinCEN),

Training Working Group to design, implement, and instruct at Egmont-sponsored regional

Immigration and Customs Enforcement, Department of

Internal Revenue Service (IRS), Criminal Investigative

Other Training Initiatives

Office of the Comptroller of the Currency (OCC), Department

Office of Overseas Prosecutorial Development, Assistance and

organizations. The RLAs implement these programs by providing training, assistance in

Office of Technical Assistance (OTA), Treasury Department

Casinos and Gaming

Treaties and Agreements

Multi-Lateral Organizations & Programs

The Organization of American States Inter-American Drug

Pacific Anti-Money Laundering Program (PALP)

United Nations Global Programme against Money

Major Money Laundering Countries

Limited asset seizure or confiscation authority.

Changes in INCSR Priorities for 2011

Countries and Jurisdictions Table

Antigua and Barbuda Luxembourg Algeria Monaco Anguilla Malawi

Australia Macau Angola Montenegro Armenia Maldives

Austria Mexico Argentina Morocco Benin Mali

Bahamas Netherlands Aruba Nicaragua Bermuda Malta

Belize Nigeria Azerbaijan Palau Botswana Marshall Islands

Bolivia Pakistan Bahrain Peru Brunei Mauritania

Brazil Panama Bangladesh Poland Burkina Faso Mauritius

British Virgin Islands Paraguay Barbados Portugal Burundi Micronesia FS

Burma Philippines Belarus Qatar Cameroon Mongolia

Cambodia Russia Belgium Romania Cape Verde Montserrat

Cayman Islands Somalia Bulgaria Saudi Arabia Chad Namibia

Colombia Switzerland Comoros Serbia Congo, Rep of Nepal

Costa Rica Taiwan Cook Islands Seychelles Croatia New Zealand

Cyprus Thailand Cote dIvoire Sierra Leone Cuba Niger

Dominican Republic Turkey Curacao Slovakia Denmark Niue

France Ukraine Czech Rep South Africa Djibouti Norway

Guatemala United States El Salvador St. Maarten Equatorial Guinea Rwanda

Guernsey Uruguay Ghana St. Vincent Eritrea San Marino

Guinea-Bissau Venezuela Gibraltar Suriname Estonia Sao Tome & Principe

Haiti Zimbabwe Grenada Syria Ethiopia Slovenia

Hong Kong Guyana Tanzania Fiji Solomon Islands

India Honduras Trinidad and Tobago Finland Sri Lanka

Indonesia Hungary Turks and Caicos Gabon Sudan

Iran Ireland Vanuatu Gambia Swaziland

Iraq Jamaica Vietnam Georgia Sweden

Isle of Man Jordan Yemen Guinea Tajikistan

Israel Kazakhstan Iceland Togo

Italy Korea, North Kyrgyz Republic Tonga

Japan Korea, South Lesotho Tunisia

Jersey Kosovo Liberia Turkmenistan

Kenya Kuwait Libya Uganda