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FINANCIAL INTELLIGENCE CENTRE. Briefing to the Portfolio and Select Committees on Finance MEMORANDUM OF UNDERSTANDING OF THE EASTERN AND SOUTHERN AFRICAN ANTI-MONEY LAUNDERING (ESAAMLG) 25 JUNE 2002. FINANCIAL INTELLIGENCE CENTRE. Objectives of the Briefing:

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Financial intelligence centre

FINANCIAL INTELLIGENCE CENTRE

Briefing to the Portfolio and Select Committees on Finance

MEMORANDUM OF UNDERSTANDING

OF THE

EASTERN AND SOUTHERN AFRICAN ANTI-MONEY LAUNDERING (ESAAMLG)

25 JUNE 2002


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FINANCIAL INTELLIGENCE CENTRE

Objectives of the Briefing:

To brief the Committees on the Approval by Cabinet for the signing of the Eastern and Southern African Anti-Money Laundering Group ESAAMLG Memorandum of Understanding within the context of:

  • The establishment of the FIC within an regional institutional context

  • The Eastern and Southern African Anti-Money Laundering Group (ESAAMLG)

  • The ESAAMLG Memorandum of Understanding

  • Relationship to the Financial Action Task Force (FATF)


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FINANCIAL INTELLIGENCE CENTRE

Background –

  • Proposal to establish a regional anti-money laundering group in Africa first recommended at workshop held in South Africa in October 1995.

  • Eastern and Southern African Anti-Money Laundering Group (ESAAMLG) launched at meeting of Ministers in Tanzania, 1999.

  • Memorandum of Understanding (MOU) acts as the base document for active membership – but SA still to sign.


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FINANCIAL INTELLIGENCE CENTRE

ESAAMLG Memorandum Of Understanding (MOU) –Key elements

ESAAMLG objectives:

  • Adopt and implement the 40(+8) Recommendations of the FATF;

  • Apply anti-money laundering measures to all serious crimes;

  • Implement measures contained in multi-lateral agreements and initiatives to which they subscribe for the prevention and control of the laundering of proceeds of all serious crime.


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FINANCIAL INTELLIGENCE CENTRE

MOU (cont)

  • Members of the ESAAMLG/ Signatories to the MOU

    • Kenya

    • Malawi

    • Mauritius

    • Mozambique

    • Namibia

    • Swaziland

    • Seychelles

    • Tanzania

    • Uganda

  • ESAAMLG Countries which have not yet signed the MOU

    • Botswana

    • Lesotho

    • South Africa

    • Zambia


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FINANCIAL INTELLIGENCE CENTRE

MOU (cont)

  • Provision made for Co-operating and Supporting Nations

    • Countries which express support for ESAAMLG objectives & have undergone positive FATF mutual evaluation process;

    • US, UK.

  • Provision is made for observer countries & organisations

    • Commonwealth Secretariat

    • UN Global Programme Against Money Laundering

    • Financial Action Task Force (FATF) Secretariat

    • World Bank & International Monetary Fund

    • Interpol

    • World Customs Organisation

    • African Development Bank

    • Southern African Development Community Secretariat

    • Common Market for East and Southern Africa Secretariat

    • East African Community Secretariat; and the

    • East African Development Bank.


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FINANCIAL INTELLIGENCE CENTRE

MOU (cont)

  • Funding

    • Annual membership subscription of US $ 20, 000

  • Structure

    • Ministerial Council – annual meeting

    • Task Force of Senior Officials – twice-annual meeting

    • Secretariat – based in Dar Es Salaam

  • Ministerial Council

    • Key decision making body

    • Consists of Ministerial representative

    • Annual meeting

    • Elect office-bearers (President and vice-president)

    • Approve: financial report; work programme; secretariat; audit; adopt policy; approve new members; etc


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FINANCIAL INTELLIGENCE CENTRE

MOU (cont)

  • Task Force of officials

    • Members represented by senior official

    • Meet twice annually

    • Prepare for Council meetings

    • Monitor work of Secretariat

  • Secretariat

    • Perform technical duties

    • Implement work programme, including -

      • assessment processes, training, facilitate and liaise with third parties, monitor AML developments;

    • Submit to the Task Force -

      • annual report; financial reports; work programme; budget


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FINANCIAL INTELLIGENCE CENTRE

MOU (cont)

  • National Committees/ FIUs

    • All member countries will establish FIU’s

  • Self-Assessment/ Mutual Evaluation

    • All member countries will agree to undergo self-assessments and mutual evaluations

  • Language

    • English


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FINANCIAL INTELLIGENCE CENTRE

ESAAMLG is regional-style body of the Financial Action Task Force (FATF)

  • FATF is de facto international coordinating body responsible for combating money laundering

    • Consists of twenty-nine member countries and two regional bodies.

    • Has developed a set of Recommendations which set global standard for anti-money laundering (AML) and combating financing of terrorism (CFT)

    • Recommendations known as FATF 40+8

  • Minimum criteria FATF membership:

    • Full political commitment to FATF objectives,

    • Implementation of 40+8 Recommendations

      (legislative framework; ‘STR’s’; and ‘KYC’ obligations), and

    • Active participation relevant FATF-style regional body (ESSAMLG)

  • FIC Act means SA largely complies with FATF –

    • SA wishes to become member of the FATF

    • SA also required to become active member of the ESAAMLG.


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FINANCIAL INTELLIGENCE CENTRE

ESAAMLG (and FATF) membership important:

  • ESAAMLG membership required for FATF compliance

    • Obviates pressure to place SA on FATF list of NCCT/ blacklist;

  • Creates opportunity for use of expertise and experience in the region;

  • Money laundering cannot be dealt with in isolation by one country;  

  • Regional cooperation will further strengthen SA anti-money laundering regime;

  • Business (esp financial sector) increasingly faces AML questions from international counterparts re compliance, & membership of international bodies. Pressure growing post Sept 2001.


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FINANCIAL INTELLIGENCE CENTRE

Process and Interaction with FATF and ESAAMLG

  • FATF -

    • Delegation visited (May); SA political commitment given

    • Membership application process under way

    • Plenary meeting approval (June)

    • Invited as observer to Plenary – October 2002

    • Evaluation process in March 2003

    • Membership from June 2003?

  • ESAAMLG

    • Officials meeting in Dar-es-Salaam

    • Cabinet has approved that Min of Fin should sign MOU

    • Active membership from August

    • Ratification by Parliament required thereafter.


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FINANCIAL INTELLIGENCE CENTRE

ends

25 JUNE 2002


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Argentina;

Australia;

Austria;

Belgium;

Brazil;

Canada;

Denmark;

Finland;

France;

Germany;

Greece;

Hong Kong, China;

Iceland;

Ireland;

Italy;

Japan;

Luxembourg;

Mexico;

Kingdom of the Netherlands;

New Zealand;

Norway;

Portugal;

Singapore;

Spain;

Sweden;

Switzerland;

Turkey;

United Kingdom; and

United States.

European Commission; and the

Gulf Co-operation Council.

FINANCIAL INTELLIGENCE CENTRE

Annexure

Financial Action Task Force Members


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FINANCIAL INTELLIGENCE CENTRE

Annexure

FATF LIST OF NON-COOPERATING COUNTRIES AND TERRITORIES (NCCT) – June 2002

Cook IslandsNauru

DominicaNigeria

EgyptNiue

Grenada The Philippines

GuatemalaRussia

Indonesia St Vincent & The Grenadines

Marshall IslandsUkraine

Myanmar (Burma)

  • Hungary, Israel, Lebanon and St Kitts & Nevisremoved, 21 June 2002


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FINANCIAL INTELLIGENCE CENTRE

Annexure

FATF RELATIONSHIPS

FATF

  • 29 countries represented

  • Membership by invitation

  • Country members

  • Policy matters

FATF-style Regional Bodies

South American

Financial Action Task Force

(SAFATF)

Caribbean

Financial Action Task Force

(CFATF)

  • FATF-style Regional Body - ESAAMLG

  • (9 countries represented)

  • Country members

  • Regional policy matters

Asia/ Pacific

Group on Money Laundering

(APGML)


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FINANCIAL INTELLIGENCE CENTRE

Annexure

FIC Overall Architecture

Internat.

Links

Investigative

Authorities eg.

Accountable Institutions

sharing

Supervisory

Bodies (FSB)

sharing

SAPS

FIC

Bank

Coordination

Compliance

Data storage

Analysis

Reports

NDPP

Insur-

ance

Reports

Reports

SARS

Casino

Awareness & training

Investigations

ML Advisory Council


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