Bureaucrats given handbook against financial crimes

AMLoSPHERE- A handbook this weekend hit desks of top bureaucrats and politicians in Islamabad, warning them against complacency or lack of expertise against organised financial crime, money-laundering for financing terror and absence of closer cooperation with international forces against terror-capital.

This handbook, "The Prevention of Money-Laundering and Terrorist Financing," has been produced in collaboration with the International Chambers of Commerce. The book is written by John Howell and has been handed over to senior finance and organised crime-related bureaucracy and politicians etc. by a team of US-led international experts, who are out to study vigil against such crimes in the Third World countries.

The book indicates startling vulnerabilities of economies and state structures like Pakistan, specifically pointing out that lack of regulations, staff training and vigilance might put such vulnerable structures in serious dangers and that too very soon.

It says the international business community's arm that keeps vigil on money transfers and turnovers of high-value goods and services are "gatekeepers of the financial system and both they and the global community they serve are at risk."

It emphasizes the need of "a highly hostile environment for those bent on manipulating financial systems." It also offers a functional definition of money laundering and terror financing in a well-publicised backdrop of the recent actions taken against countries, companies and financial gangs by the Office of Foreign Assets Control (OFAC), the United States.

The handbook points out that the "gatekeepers are no longer to be found just in financial institutions, but also in all walks of life and in countries at all stages of development." It indicates that not just money-laundering and terror-financing are in league as process that boosts up the potential of terror, but also corruption that is rife in countries where terror attains manpower supply – apart from local government and non-government moneyed supporters in the fields of propaganda and real-action sabotage.

The main areas this handbook touches upon include history and scope of the problem; identifying the people that perpetrate the crime; purposes of money-laundering; impact of laundering on businesses; threats posed by it; specific-business scenarios; economic rationale of legislation against the crime; international legal and industry standards; sector guidelines and in-house rules; enforcement issues; training issues; record-keeping; personal and organisational responsibility; sectors most actively engaged like banking, insurance, money-transmission services; alternative remittance systems, property and estate, accountancy and consultancies professions; lawyers and paralegals, company and trust formations and activists, etc.

It points out that "not all transfers of money or value pass through the formal financial system." In some areas of the world, Alternative Remittance Systems (ARS) are both legal and commonly used to make transfers domestically and internationally. As these systems sometime involve transfers of, or transformation into non-monetary goods, they are also called Informal Value Transfer Systems (IVTS) as well as Informal Funds Transfer Systems (IFTS). A number of terms are commonly used to describe the ARS, such as "parallel", "underground", or Hawalas' banking. There is a long history of the ARS in the Middle East and Asia, and they are sometimes referred to (with spurious accuracy) as Chip Shops.

Regarding the crime penalties and enforcement, it emphasises: “National money-laundering laws also set out the penalties for involvement in the crime. These vary from country to country, but three points are worthy of special mention here. There are often higher penalties for those in possession of trusts and vulnerable sector of the economy. In some countries, the penalties for money laundering are tougher than the penalties for the underlying crimes. When the money laundering involved is related to terrorism, the penalties can be much more severe.” The handbook quotes examples of laundering-terror-financing and one of them i.e. laundering related to securities law violations and possible link with terrorism is particularly interesting.

http://www.amlosphere.com/asia/aml/bureaucrats-given-handbook-against-financial-crimes.html