UK: A Month in Money Laundering - May 2005

Last Updated: 19 July 2005
Article by John Hammersley

Most Read Contributor in UK, August 2017

Welcome to the May 2005 edition of A Month in Money Laundering

This edition includes news on the Parliamentary approval of a new anti-money laundering Bill in India (7 May) and the launch of an association for anti-money laundering professionals in Dubai (23 May).

Also included in this month, are details of the approval by the European Parliament of the third EU money laundering Directive (26 May).

These issues and others are summarised in this edition of A Month in Money Laundering.


Michael Corrigan
Partner, Financial Services Advisory
Deloitte & Touche LLP

1 May

Syrian President unveils anti-money laundering measures. Syrian President, Bashar Assad, has issued a decree to combat money laundering and terror financing, including stiffer penalties for such acts. The new rules create a financial intelligence unit to monitor money laundering and terror financing which will be given the power to investigate suspicious transactions. The unit will focus on assets obtained from drug crimes, illegal weapons dealings, international organised crime and people smuggling.

5 May

Canadian agencies sign memorandum of understanding. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and the Investment Dealers Association of Canada (IDA) have signed a memorandum of understanding to exchange information related to money laundering compliance. This agreement will minimise potential overlap between FINTRAC and IDA anti-money laundering efforts and reduce the administrative and regulatory burden on investment dealers in the country. FINTRAC will provide information to the IDA to facilitate its risk assessment of investment dealers subject to the Proceeds of Crime Money Laundering and Terrorist Financing Act (PCMLTFA). The IDA will provide FINTRAC with information regarding Member firms' adherence to and compliance with the Act and regulations.

6 May

Indonesian President creates anti-corruption task force. The Indonesian President today announced the creation of a new taskforce of prosecutors, police officials and state auditors, the Coordinating Team for Corruption Eradication. Its duties will include tracing assets and preventing money laundering. The President has also arranged monthly meetings with the Attorney General, the National Police, the Corruption Eradication Commission and the Centre for Analysis and Transaction Reporting (PPATK)

7 May

Indian Government approves amended anti-money laundering Bill. With most of the House boycotting the vote, "The Prevention of Money Laundering Bill" was passed by the Indian Parliament today. Only 41 of the total 545 members were present at the vote. The Finance Minister has stated that the Prevention of Money Laundering Bill could come into force as early as June. One of the key changes of the new Act is the introduction of a threshold limit for government investigation into money laundering. This is set to increase the efficiency of government investigation, with smaller incidences being handled by the police.

8 May

Latvia increases scope of money laundering measures. Viesturs Burkans, head of the anti-money laundering service, has stated that Latvia should include the real estate market within the remit of its anti-money laundering framework. Mr Burkans acknowledged that illegal agents may well be fronting money laundering campaigns. This action comes in response to the Latvian Prime Minister’s denouncement that several foreign countries believe Latvia to be an easy target for those wishing to launder money.

Senior banker calls for stricter money laundering approach in Uganda. Speaking at a fraud seminar today, Ms Justine Bagyenda, the Director of Commercial Banking at the Bank of Uganda (BoU), said Uganda was among the leading countries involved with money laundering and fraud in the sub Saharan region. Ms Bagyenda, said however that BoU has put in place committees that would analyse the causes and prevention of fraud cases. The seminar heard that the level of money laundering in the local financial markets has increased in terms of sophistication and frequency. She added that an anti-money laundering bill is currently with Parliament.

9 May

Financial Action Task Force (FATF) acknowledges Nigeria’s progress in fight against money laundering. In a recent visit to the Nigeria, the President of the FATF, accompanied by the Chairman of the Economic and Financial Crimes Commission (EFCC), stated that they were impressed with the action taken by the Nigerian Government in the fight against money laundering. This bodes well for the FATF plenary meeting in June, when Nigeria hopes to be removed from the organisation’s list of non-cooperative countries and territories.

11 May

US companies urge SEC to reduce number of "suspicious activity" alerts. US financial services companies are urging the Federal Government to adopt new rules on the filing of "suspicious activity reports" (SARs), claiming that a current spate of such reports is costing billions of dollars and is hampering efforts to clamp down on money laundering. The Financial Services Roundtable, representing many of the largest US banks, insurance and securities firms, has asked the Treasury, the Federal Reserve and other regulatory agencies to launch a formal process to reduce the number of filings. The number of SARs has increased dramatically since the September 11 attacks, and at the current rate is set to be double that of 2004. The Financial Services Roundtable has estimated that industry will spend $11 billion on money laundering compliance this year, up 50% from 2002.

14 May

Nevada gaming regulators to decide on United States Patriot Act. Nevada gaming regulators will soon decide whether to amend the state’s financial reporting and record keeping provisions to fit in with America’s Patriot Act or abandon the current state regulation completely and let the federal Internal Revenue Service and the Financial Crimes Enforcement Network take over all cash transaction oversight of the state's casinos. Whichever route is taken by the regulator, holders of Nevada gaming licenses will be required to file suspicious transaction reports. State. The Patriot Act has a timetable for compliance with federal reporting standards and an important deadline for Nevada is July 1.

17 May

Indonesia wants closer cooperation among ASEAN countries’ police forces. Indonesian President, Susilo Bambang Yudhoyono, called for closer cooperation among Association of South East Asian Nations (ASEAN) countries to prevent money laundering and transnational crime. He said closer cooperation was needed as the nature of crimes committed is different from that in the past. Closer cooperation among the 10 Asean countries would improve their professionalism and at the same time upgrade the already established cooperation among Asean members.

18 May

United States Treasury defends suspicious activity reports as vital. Treasury Under Secretary for Terrorism and Financial Crimes, Stuart Levey, told bankers at a conference that the 350,000 suspicious activity reports filed by the US banking industry are important and rejected critics’ claims that they are useless and ignored due to resource requirements. "To the contrary, the importance of these reports cannot be overstated," he said.

Indonesia’s PPATK wants money laundering law amended to include international standards. The Centre for Analysis and Financial Transaction Reporting (PPATK) urged the House of Representatives to include the anti-money laundering law in the list of laws to be amended by the legislative body. They say that the law has shortcomings in its implementation and should be updated to include new international standards. The proposed amendments include increasing the number of industries required to submit reports, expansion of PPATK's authority to investigate suspected cases of money laundering and the obligation to report international money transfers.

20 May

China launches first anti-money laundering system for foreign exchange. The State Administration of Foreign Exchange declared has unveiled China's first anti-money laundering information system to monitor foreign exchanges. The system has been developed by the administration to facilitate data analysis to combat money laundering and detect irregularities or breaches promptly.

23 May

Anti-money laundering association opens in Dubai. The Association of Certified Anti- Money Laundering Specialists (ACAMS), the membership association for specialists in antimoney laundering, has launched its first Middle Eastern chapter in Dubai, United Arab Emirates. Over 100 anti-money laundering professionals attended the opening, along with H.E. Sultan Bin Nasser Al Suwaidi, Governor of the UAE Central Bank and Chairman of the nation's National Anti-Money Laundering Committee. At a local level, the chapter will further ACAMS' main mission of providing education and professional development to industry specialists through special training events, workshops and meetings.

24 May

Middle East financial institutions told to improve on anti-money laundering. Sultan bin Nasser al-Suweidi, Governor of the Central Bank of the United Arab Emirates, told a conference of Islamic financial institutions in Doha today that they must improve methods to prevent money laundering and communicate better with the West if they are to change their poor image. Suweidi specifically suggested that Islamic financial institutions could improve procedures related to knowing their customers and improve corporate governance standards.

25 May

Russian Central Bank seeks amendments to anti-money laundering legislation. The Russian Central Bank has proposed amendments to the current legislation to prosecute banks that intentionally offer money laundering schemes, said Andrei Kozlov, the First Deputy Chairman of the bank. Mr Kozlov said that while banks in the member states of the Financial Action Task Force mostly become involved in money laundering unintentionally, in Russia some banks knowingly offer ‘grey’ and ‘dirty’ schemes. He added that the Central Bank is actively cooperating with the Federal Financial Monitoring Service and law enforcement agencies.

26 May

Third EU Directive approved by the European Parliament. The European Parliament has approved the third EU money laundering Directive, putting onus on an array of professionals to identify and report money laundering. Lawyers, accountants and estate agents must increase their customer identification checks on new clients, banks and credit card firms must check customers' identities when they open an account or make a transaction worth more than €15,000 ($19,000), persons holding over 25% of the shares or voting rights of a corporate body will be subjected to compulsory identity checks, casino operators will have to identify customers gambling more than €2,000 and providers of goods, such as jewellers or car dealers, must identify anybody making a cash payment of more than €15,000. The third directive will supersede directive 91/308/EC if fully supported by the Council for Economic and Financial Affairs on 7 June.

27 May

Details of South Korean anti-money laundering strategy unveiled. The Ministry of Finance and Economy for South Korea today announced their strategy to reduce the number of cases of suspected money laundering. Financial companies reported 1,646 cases of suspected money laundering in the January to March period this year, up from 791 during the same period in 2004. From 18 January 2006, under the proposed legislation, financial firms will have one day to report cash transactions of more than one million Korean Won to the Korean Financial Intelligence Unit.

30 May

Russian anti-money laundering chief reports progress. The Russian Federal Financial Monitoring Service has sent 680 reports on suspected or proven money laundering to law enforcement agencies, the Russian Federal Financial Monitoring Service Chief, Viktor Zubkov, announced today at a conference on "Current World Tendencies of the Development of Money Laundering Control and Russian Legislation". The Federal Financial Monitoring Service also proposed introducing monitoring of certain individuals’ bank accounts and toughening monitoring of bank accounts belonging to public figures or members of their families.

Looking Forward

United States
The Financial Crimes Enforcement Network has criticised the compliance guidelines, recently issued by the federal authorities for Money Service Businesses, as overly-complex, in particular the guidelines for filing SARs. The organisation is hosting a meeting on 26 September to discuss the issue. 

The Council of Europe Moneyval Committee’s Plenary Meeting will take place between 30 May and 3 June in Strasbourg, France. 

The third Plenary Meeting of the Financial Action Task Force (FATF XVI) on Money Laundering will take place in Singapore between 8 and 10 June. 

Costa Rica
The Caribbean Financial Action Task Force (CFATF) will be hosting a joint seminar with the International Monetary Fund and the World Bank in San Jose, Costa Rica between 27 June and 1 July. 

Cayman Islands
The islands will be host to the Offshore Group of Banking Supervisors (OGBS) Annual Meeting between 30 June and 1 July. 

Head of the Financial Action Task Force (FATF), Jean-Louis Fort, will take part in a seminar on combating money laundering and terrorist financing, to be conducted by the Russian Central Bank in June. The seminar will be held under stage three of the EU's TACIS program, which provides financial and technical assistance to Eastern Europe and Central Asia, to train Central Bank staff. Philip Robinson, head of the UK’s Financial Services Authority's financial crime sector, is also planning to attend the conference. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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