Anti-Money Laundering

1
Anti-Money Laundering Countering Terrorist
Financing in Bank Projects

• The World Bank
• Finance Forum 2004
• September 23, 2004

2
AML/CFT work in the Bank

• Definitions
• Money laundering (ML)is the process by which the
  proceeds derived from a criminal activity are
  disguised in an effort to conceal their illicit
  origins and to legitimize their future use.
• Terrorist financing (TF) is the financial
  support, in any form, of terrorism or those who
  encourage, plan or engage in terrorism.

3
AML/CFT work in the Bank

• James D. Wolfensohn the global community should
  act where it really matters
• Economically, money laundering and financing of
  terrorism really matter
• Post-9/11 development

4
AML/CFT work in the Bank

• Adverse implications for developing countries
  include
• 1.    Potential increase in crime and corruption
• 2.    Potential Damage to reputation of financial
  institutions and market
• 3.    Less foreign private investment
• 4.    Possible destabilization of financial
  markets

5
AML/CFT work in the Bank

• Because ML and TF can have particularly damaging
  economic and social consequences for vulnerable
  clients countries, the Bank board decided in
  January 2002 to set a special AML/CFT working
  program
• The Banks AML/CFT program is a multi-pronged
  approach that complements the Banks other work.

6
The Board Mandate

• AML/CFT Assessments in FSAPs
• Technical assistance
• Cooperation with existing AML/CFT groups
• Cooperation with others TA providers to avoid
  duplication of efforts

7
TA Program and Policy

• TA provided by the Bank has focused on 
• -  drafting of laws and regulations
• -  implementation of preventive measures in the
  financial system
• - training bank supervisors
• -  setting up FIUs
• - training of evaluators (FSRBs)

8
TA Program and Policy

• TA is delivered in an effective and efficient
  manner. Examples of TA delivered include
• o       Individual country TA
• o       Multi-country / Regional training
  seminars
• o       GDLN (Global Distance Learning Network)
  training programs
• o       Global Dialogue series
• o  E-learning programs (currently
  underway)

9
Challenges Advantages

• High demand for AML/CFT experts or consultants
• Increasing requests for Technical assistance
• Funding

• Clear International AML/CFT Standards
• Existing Evaluation Systems (FATF, FSRB FSAP)
• Orgs, networks donors (UNODC, Egmont Group,
  ADB, IADB, etc. )

10
Organizations

• FATF Financial Action Task Force
  www.fatf-gafi.org
• Recently Revised 40 AML 8 CFT Recommendations
• FSRBs FATF-Style Regional Bodies
• Asia Pacific Group on AM (APG)
• Caribbean Financial Action Task Force (CFATF)
• Council of Europe AML/CFT Committee (MONEYVAL)
• Eastern Southern Africa AML/CFT Group (ESAAMLG)
• Financial Action Task Force on ML So. America
  (GAFISUD)
• New FSRBs (not yet officially recognized)
• Middle Eastern North Africa
• Eur-Asian FSRB
• Sub-saharan Africa (GIABA)
• Central Africa (GIABAC)
• Egmont Group Assn. of Financial Intelligence
  Units

11
FSRB Members

• FATF Argentina, Australia, Belgium, Brazil,
  Canada, Denmark, EC, Finland, France, Germany,
  Greece, Gulf Coop council, Hong Kong, Iceland,
  Ireland, Italy, Japan, Luxembourg, Mexico,
  Netherlands, New Zealand, Norway, Portugal,
  Russia, Singapore, South Africa, Spain, Sweden,
  Switzerland, Turkey, UK, USA.
• APG Australia, Bangladesh, Brunei, Taipei, Cook
  Is., Fiji, Hong Kong, India, Indonesia, Japan,
  Macau, Malaysia, Marshall Is., Nepal, New
  Zealand, Niue, Pakistan, Korea, Palau,
  Philippines, Samoa, Singapore, Sri Lanka,
  Thailand, USA, Vanuatu.
• CFATF Anguilla, Antigua/Barbuda, Aruba,
  Bahamas, Barbados, Belize, Bermuda, Br. Vir. Is.,
  Cayman Is., Costa Rica, Dominica, Dominican Rep.,
  Grenada, Haiti, Jamaica, Montserrat, Neth.
  Antilles, Nicaragua, Panama, St. Kitts/Nevis, St.
  Lucia, St. Vincent/Grenadines, Surinam,
  Trinidad/Tobago, Turks Caicos, Venezuela.
• MONEYVAL Albania, Andorra, Azerbaijan,
  Bosnia/Herzegovina, Bulgaria, Croatia, Cyprus,
  Czech Rep., Estonia, Georgia, Hungary, Latvia,
  Liechtenstein, Lithuania, Malta, Moldova, Poland,
  Romania, Russia, San Marino, Serbia/Montenegro,
  Slovakia, Slovenia, Macedonia, Ukraine.
• ESAAMLG Botswana, Kenya, Malawi, Mauritius,
  Mozambique, Namibia, Seychelles, So. Africa,
  Swaziland, Tanzania, Uganda.
• GAFISUD Argentina, Bolivia, Brazil, Chile,
  Columbia, Ecuador, Paraguay, Peru, Uruguay.
• MENAFATF Algeria, Bahrain, Egypt, Jordan,
  Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi
  Arabia, Syria, Tunisia, United Arab Emirates and
  Yemen.
• Eur-Asia Russia, Kazakhstan, Kyrgyz,
  Tajikistan, Turkmenistan, Uzbekistan, Belarus,
  China.

12
AML/CFT Technical Assistance

• TA loans
• Trust Funds
• Loan preparation TFs (adjustment loans)
• FIRST Initiative Trust Fund
• Donor coordination
• Effective efficient TA delivery
• Multi-country training seminars
• GDLN training programs (video conference)
• E-learning programs (under development)

13
ECA
14
Regional country TA programs

• 2002 Large (24 country) training conference,
  Moscow
• 2003 Sub-regional training seminars
• 2004 Training by GDLN (VC)
• Central Asian countries
• Bosnian officials