Terror Groups Hijack Charity Cash

Exclusive unsuspecting members of the public are being duped into donating cash to charities that are fronts for terror groups. Europol, an arm of the European Union that gathers information from national police forces, says “substantial” amounts of money innocently donated to apparently good causes is ending up in the pockets of terrorists.

Even raffles are being used to con people, Europol believes.

It is also highlighting an increasing trend by terrorists to use women. A spokesman for Europol told the Sunday Express: “Women are involved in propaganda, support and financial activities. Men are more likely to be involved in actually perpetrating violence.

“Women are also used as cash couriers and they sometimes smuggle documents and take care of administrative matters.”

In a report detailing trends in terrorism and extremism in the EU, Europol says Britain is the number one target for terrorists.

It identifies Islamic extremism as the biggest threat, with the growing power of radical youth groups of particular concern.

In trying to combat the threat, EU police forces want to cut the lifeline of illegal funds, which also come from organised crime. The EU Terrorism report for 2010 says: “Illegal sources for the financing of terrorism cover a wide range of criminal activities including fraud, counterfeit products, drug smuggling, kidnapping, human trafficking and extortion.

“Alongside criminal activities, funds can also be derived from legitimate sources. Charitable organisations continue to be misused by individuals who misappropriate voluntary contributions destined for genuine purposes to fund terrorist activities.”

Financing terrorism was one of the most common reasons for arrest in the EU-wide battle against extremism last year, according to the report.

Rob Wainwright, the British director of Europol, which the Sunday Express last week revealed could become an FBI-style force with the power of arrest, said: “In some cases it is difficult to differentiate between criminality and acts of terrorism. Terrorism is not an ideology but a set of criminal tactics which deny fundamental principles of democratic societies.”

Although Britain’s Charity Commission works with the Serious Organised Crime Agency if there is a suspicion of illegal activity, it admits being unable to monitor how individual charities’ funds are spent.

The problem is more acute if the cash is sent abroad. Last year, a trustee of a northern-based charity was arrested in Bangladesh after the country’s police found an arms cache in an Islamic school for which he had been raising funds.

A Charity Commission spokeswoman said yesterday: “We carry out risk-based monitoring where appropriate as part of our case work. Where allegations of criminality arise, these will be for the police and law enforcement agencies to assess.”

Meanwhile, Europol is also concerned about the rise of far-right extremism against Islam after it emerged last week that football hooligans have formed a group called the European Defence League.

Police fear it could hijack Champions League matches to stage its protests.

By Ted Jeory

Source: Express

Commission acts to enforce AML rules in Germany

The European Commission has today asked Germany to fully comply with EU laws regarding anti money-laundering (AML) and combating the financing of terrorism (CFT). The Commission is concerned that two German Bundesländer have not yet assigned competent supervisory authorities to all entities which are subject to AML/CFT requirements, and Germany has thus failed to prevent the misuse of the financial system for the purpose of money laundering and terrorist financing. The Commission’s request to Germany takes the form of a reasoned opinion. If Germany does not reply satisfactorily within two months, the Commission may refer the matter to the EU Court of Justice.

What is the aim of the EU rule in question?

The anti-money laundering (AML) legislation (Directive 2005/60/EC) aims to protect the integrity, reputation and stability of the financial system, all of which are integral to the proper functioning of the Internal Market. Each Member State in the EU was required to adopt this legislation by 15 December 2007. The legislation requires the financial sector and other designated bodies and professions, including lawyers, real estate agents, and casinos, to comply with a number of obligations. These could include taking measures to identify their customers and reporting suspicious transactions. To ensure these obligations are adhered to, Member States are required to appoint competent authorities to supervise the way these entities fulfil their tasks.

How is Germany not respecting these rules?

According to German Anti-money laundering law1 the federal states or Bundesländer in Germany are responsible for assigning supervisory authorities to certain designated entities. However, not all German Bundesländer have appointed such supervisory authorities. There are deficiencies with regard to real estate agents, insurance intermediaries and providers of goods, when payments are made in cash in excess of €15 000. Deficiencies have been found in the following Bundesländer: Mecklenburg-Vorpommern and Sachsen-Anhalt.

How are EU citizens and/or businesses suffering as a result?

Money laundering is a major international problem. Whether the perpetrators are corrupt dictators, drug barons, human traffickers, fraudsters or racketeers, they all have one thing in common: the need to disguise the flow and deposit of money so that it appears legitimate. The movement of large sums of illegal money threatens both the stability and reputation of the financial system, thereby jeopardising the proper functioning of the Single Market.

Failure to adequately implement the requirements of AML and CFT legislation means that criminals and terrorist organisations can detect and exploit loopholes in the system more easily. The supervision of designated entities is thus an important element towards ensuring a sound and comprehensive AML/CFT system.

More information

http://ec.europa.eu/internal_market/company/financial-crime/index_en.htm

Latest information on infringement proceedings concerning all Member States:

http://ec.europa.eu/community_law/index_en.htm

For more information on infringement procedures, see MEMO/11/45

Source: IEWY

Terror arrests in Ireland are third highest in Europe

by Michael Freeman

There were more arrests over terrorism offences in Ireland than almost anywhere else in the EU last year, according to a new report.

Some 62 terror suspects were taken into custody in the Republic – more than ten per cent of the European total. They included 57 people suspected of republican paramilitary activity and five in relation to Islamic militancy, Europol’s EU Terrorism and Trend Report reveals. The five Islamic terrorism arrests came after an alleged plot to murder Swedish cartoonist Lars Vilks, who drew a controversial image of the prophet Muhammad, was uncovered in Ireland in March 2010.

Only Spain and France made more arrests in 2010, though the numbers there were far greater. France arrested 219 people and Spain 118, while in fourth place the UK figure was 45. Ireland’s figures were almost double the previous year, when only 33 suspects were taken into custody.

The main other findings of the report were:

• There were a total of 249 terrorist attacks carried out across the EU, with 40 perpetrated by terrorist groups based in Northern Ireland and the Republic.
• The Real IRA and Continuity IRA “continue to pose a threat” in the UK, and have grown in size and capability in recent years.
• Ireland has a mostly successful record for prosecuting terrorism offences, with 83 per cent of cases resulting in conviction. However, the average jail penalty of five years is below the EU average.
• The report noted that Ireland had successfully implement an EU directive on money laundering, designed to restrict financing of terrorism. 
• A total of 179 people were arrested in Europe on suspicion of Islamic terrorism. This was a 50 per cent increase on the previous year, and almost half the arrests were made over planned attacks on EU countries.
• The report warned that continued political unrest in North Africa could shake up al-Qaeda affiliates and lead to them establishing a greater presence in Europe. It also stated that most of the suspects arrested over alleged Islamic terrorism were acting alone or autonomously – meaning there is no single network or organisation which can be targeted.

Europol is the EU’s criminal intelligence agency, which works with law enforcement organisations across all member states.

Source: The Journal

EU in new deal with US on bank data access

The European Commission has approved a deal to allow US anti-terror investigators continued access to European bank transaction data. Data transfers have been suspended since February, when Euro MPs rejected an earlier draft agreement, saying the privacy safeguards were inadequate.

The European Parliament still has to vote on the revised deal.

Commission president Jose Manuel Barroso told MEPs that the new draft "has strict safeguards on privacy".

US access to bank data in the Swift money transfer system would be "strictly limited" to the prevention and detection of terrorist financing, he said.

Swift handles millions of transactions daily between banks and other financial institutions worldwide. It holds the data of some 8,000 banks and operates in 200 countries.

Transatlantic partnership

Top US officials, including Secretary of State Hillary Clinton, have lobbied the EU over the data transfer deal.

Mr Barroso stressed the importance of the US Terrorist Financing Tracking Programme (TFTP) in EU-US relations.

"Our American partners considered this the first priority in relations with the EU. A significant volume of data was not available to the Americans," he told MEPs in Strasbourg.

But the leader of the European Socialist group, German MEP Martin Schulz, told Mr Barroso that "there are serious misgivings about these negotiations in this house".

"What the Commission decided today is not what the parliament would view as constituting progress," he said.

The US started accessing Swift data after the 11 September 2001 terror attacks on New York and Washington.

But the fact that the US was secretly accessing such data did not come to light until 2006.

Privacy checks

The EU Commissioner for Home Affairs, Cecilia Malmstroem, said the revised agreement would ensure Europol scrutiny of US data requests.

"Europol will assess whether those data are necessary for the fight against terrorism and its financing before the data is sent to the US," she said last week.

Safeguards in the deal would also ensure that the US requests were "tailored as narrowly as possible" to minimise the amount of data transferred, she said.

The draft also provides for "an independent EU person" appointed by the Commission to monitor the US investigators' actions, she said.

There is also a requirement that "bulk data can never be sent to third countries".

The Commission says the data transferred under TFTP can include identifying information about the originator and/or recipient of the transaction, including name, address, national identification number and other personal data related to financial messages.

"The essence of the TFTP is that each month a large volume of data is transferred," the Commission says.

But the data on the TFTP database "are effectively anonymous unless there is a reason to believe that a person is engaged in terrorism".

Source: BBC

U.S. Rules Bar Banks That Violate Iran Sanctions

The Treasury Department released new regulations on Friday that could bar foreign banks or companies from accessing the financial system in the United States if they did business with entities or people subject to United Nations and United States sanctions.

The regulations, which grew out of legislation Congress passed in June, effectively bar foreign banks from doing business in dollars if they engage in transactions with anyone suspected of involvement in Iran’s nuclear or missile programs. The entities include Iran’s Revolutionary Guards.

The regulations were released just months after the passage of new sanctions on Iran by the United Nations Security Council and the European Union. The European Union sanctions include additional measures aimed at Iranian banks and insurance companies and the Iranian transport sector. Administration officials have said they believe that the sanctions have already started to have an effect.

The Treasury regulations prohibit or impose strict conditions on the use of American bank accounts by any institution that engages in activities associated with Iran’s nuclear and missile programs.

Those activities include aiding the Iranian government’s efforts to obtain weapons of mass destruction or to support terrorism, aiding the activities of people already subject to United Nations sanctions and providing any financial assistance to Iran’s Revolutionary Guards or their affiliates. A final provision is aimed at banks or companies that engage in money laundering or assist any Iranian financial institution — including the Central Bank of Iran — in the activities cited.

Earlier sanctions focused on some of those activities, but violators were subject mostly to fines. The threat of being cut off from the United States economy adds a significant dimension, said Stuart A. Levey, the under secretary of the Treasury for terrorism and financial intelligence, in a briefing for reporters on the regulations.

Mr. Levey planned to leave Friday on a trip to the United Arab Emirates, Lebanon and other Middle Eastern countries to explain the regulations to officials of government and financial institutions.

“It would not be in our interest to act without warning,” he said. “We’re more interested in changing behavior than in ‘getting’ somebody.”

by: By ROBERT F. WORTH

Source: The NY Times

Commission presents options for establishing a European system for tracking terrorist financing

Brussels, 13 July 2011 – Responding to the call from the European Parliament and the Council of the European Union, today the Commission adopted a Communication outlining the main options for establishing a European Terrorist Finance Tracking System (TFTS). This Communication represents an initial response to the request to prepare a legal and technical framework for establishing such a system within the European Union.

Commissioner for Home Affairs, Cecilia Malmström, said: "Following the conclusion of the EU-US TFTP Agreement the European Parliament and the Council have asked the Commission to find a European solution for extracting the requested data on European soil. Today's Communication describes the different possible options and seeks to trigger a debate about possible future proposals. Given that these future proposals would need to fully respect fundamental rights, and in particular ensure a high level of data protection, I intend to pay close attention to the necessity and proportionality of any possible measures which may be proposed".

A European TFTS should have two main objectives. First, the system must contribute to limiting the amount of personal data transferred to the US. Second, it should contribute significantly to efforts to cut off terrorists' access to funding and materials and follow their transactions.

The Communication gives clear indications about the key issues which need to be decided upon before such a system can be established. These include the need to fully respect the fundamental rights of European citizens, data protection and data security issues, the operational scope of the system, as well as costs.

Today's Communication presents the different options under consideration at this stage without indicating any preferred one. The Commission will now discuss these options in detail with the Council and the European Parliament before deciding on further steps on the basis of a thorough impact assessment.

Background

On 28 June 2010, the European Union and the United States of America signed the agreement on the processing and transfer of financial messaging data for the purpose of the Terrorist Financing Tracking Programme (EU-US TFTP Agreement). At the same time, the Council of the EU asked the European Commission to propose, by 1 August 2011, "a legal and technical framework for the extraction of data on EU territory". The Commission has since worked on the possible introduction of such a system. The Communication is a first step towards concrete proposals.

Developing an EU TFTS is part of a wider agenda to prevent terrorism and protect European citizens, as identified in the EU Internal Security Strategy presented by the Commission in November 2010 (IP/10/1535and MEMO/10/598).

For more information

Homepage of Cecilia Malmström, Commissioner for Home Affairs

http://ec.europa.eu/commission_2010-2014/malmstrom/welcome/default_en.htm

Homepage DG Home Affairs:

http://ec.europa.eu/dgs/home-affairs/index_en.htm

Contacts :

Michele Cercone (+32 2 298 09 63)

Tove Ernst (+32 2 298 67 64)

Source: EU Press Release

European terrorist finance tracking system options proposed

The same day that Bulgaria approved amendments to a law requiring accountants and enforcement agents to report to the State Agency for National Security any attempts at or conduct of an operation or transaction suspicious of terrorist financing, the European Commission unveiled its proposals for a European Terrorist Finance Tracking System (TFTS).

The Commission said on July 13 2011 that it was issuing the proposals in response to a call from the European Parliament and the Council of the European Union.

The proposals, the Commission said, represented an initial response to the request to prepare a legal and technical framework for establishing such a system within the European Union.

Commissioner for Home Affairs, Cecilia Malmström, said: "Following the conclusion of the EU-US TFTP Agreement the European Parliament and the Council have asked the Commission to find a European solution for extracting the requested data on European soil.

"Today's Communication describes the different possible options and seeks to trigger a debate about possible future proposals. Given that these future proposals would need to fully respect fundamental rights, and in particular ensure a high level of data protection, I intend to pay close attention to the necessity and proportionality of any possible measures which may be proposed".

A European TFTS should have two main objectives, the Commission said.

First, the system must contribute to limiting the amount of personal data transferred to the United States. Second, it should contribute significantly to efforts to cut off terrorists' access to funding and materials and follow their transactions.

The Communication gives clear indications about the key issues which need to be decided upon before such a system can be established, the Commission said.

These include the need to fully respect the fundamental rights of European citizens, data protection and data security issues, the operational scope of the system, as well as costs.

"Today's communication presents the different options under consideration at this stage without indicating any preferred one," the Commission said.

The European Commission will now discuss these options in detail with the European Council and the European Parliament before deciding on further steps on the basis of a thorough impact assessment.

In Bulgaria, amendments to the Measures against Terrorist Financing Act, approved conclusively on July 13, require accountants and enforcement agents to report to the State Agency for National Security (SANS) any attempts at or conduct of an operation or transaction suspected of being terrorist financing.

Assets suspected of being connected to or used for terrorist acts or by terrorist organisations and terrorists must also be reported to the SANS Financial Intelligence Agency, news agency BTA said.

Source: The Sofia Echo

Draft EU - US Terrorist Tracking Program Is 'Substantial Improvement'

Statement on the draft agreement with the United states on the Terrorist Financing Tracking Programme (TFTP). The first day of entering into office as new Commissioner for Home Affairs, the first dossier I was faced with was the Terrorist Financing Tracking Programme, (TFTP) and I made the commitment to the European Parliament and to the citizens to be as transparent as possible regarding this issue, that is why I am here today.

Today I have presented the state of play to the LIBE Committee of the European Parliament and I have of course informed the Member States about it. We are very close to finalising a draft EU-US TFTP Agreement with our US counterparts.

I believe it is very much in line with the Council Mandate and takes account of the key points of the Parliament's Resolution.

As you will understand, at this stage I cannot disclose all the details of the agreement, firstly because it is not yet finalised but also because it still has to be presented to the College of Commissioners. I would however like to point out the considerable improvements we have achieved compared to the interim agreement that was rejected in February. The draft agreement has achieved most of what has been demanded by the Council mandate and has also taken into account the key points of the European Parliaments resolution.

The draft Agreement contains significantly stronger data protection guarantees. In the case of inaccurate data, the Agreement provides for rectification, erasure or blocking of those data.

It sets out a comprehensive mechanism according to which Europol will verify that US requests for data are within the mandate and that they meet the conditions of the Agreement. Europol will assess whether those data are necessary for the fight against terrorism and its financing before the data is sent to the US. It will also verify whether the request is tailored as narrowly as possible in order to minimise the amount of data transferred. Unjustified requests will be rejected and data will not be transferred. Already in the interim agreement, access to individual data has to be related to an ongoing investigation on terrorism.

The draft Agreement also contains significantly more detailed prerequisites for sending lead information (and not the data as such) to third countries. Bulk data can never be sent to third countries. It includes a requirement that prior consent be obtained from the competent authorities of the relevant Member State where the data concern an EU citizen or resident.

Moreover, the draft Agreement provides for a possible EU mechanism on TFTP. It is up to the European Union to decide how this will be tailored, and if. Should the EU decide to set up its own TFTP, the U.S. will commit to cooperate and provide assistance to ensure the efficient establishment of an EU TFTP system. Such a system would of course imply a more limited transfer of data to the U.S.

The draft Agreement also provides for the Commission to appoint an independent EU person who will monitor the activities of the "scrutineers" and the independent auditors. This is a very important result as the US authorities have agreed to have a European permanently monitoring what they are doing.

In addition, the EU will undertake within 6 months of the entry into force of the Agreement, and then on a regular basis, a detailed review of data protection compliance. It means a full access to all the files for the EU team, which is also a very big step forward

As for the retention period for non-extracted data, we explored the possibility of reducing it. In the negotiations, the US produced analysis showing the high value of data that are between 3 to 4 and 4 to 5 years of age. We have agreed therefore to keep the 5 year period. Significantly, according to the draft Agreement after three years the Parties will prepare a report on the value of data retained over several years – with a view to the possible reduction of the data retention period.

On redress we have achieved a non discriminatory treatment for administrative redress and a guarantee to have judicial redress means.

So, to conclude: I believe this draft Agreement is a substantial improvement as compared with the rejected Interim Agreement. It takes account of the key areas that the European Parliament has raised. It addresses the issue of bulk data by ensuring that a European public authority must verify that each and every request is tailored as narrowly as possible in order to minimise the amount of data requested. It includes significant data protection provisions on rights of access, rectification, erasure and redress. It empowers the EU to undertake significant review of all aspects of the Agreement and of the TFTP, of which the Parliament will be kept fully informed. And it takes account of the Parliament's call for a two step approach: holding out for the prospect of an EU TFTP and a relationship of equal partners between the EU and the US.

Of course, some people will always say that we have not achieved enough, but let's have a fair assessment. I am convinced that what we have achieved is a major step forward for European citizens, and is a real success for the European Parliament. First we have the possibility to verify the agreement at several levels: first the EUROPOL request, then we have the regular monitoring by the SWIFT scrutineers, we have then a European monitoring the scrutineers, and in addition we have a review team with representatives from the data protection authorities and an extra person with a judicial background as well.

I am convinced that on this solid ground we can finalise the negotiations: to conclude an agreement that will increase the security of the European citizens while at the same time fully respecting their rights to privacy and data protection.

by Cecilia Malmström - Member of the European Commission responsible for Home Affairs

Source: Eurasia Review

Why the Iran Sanctions Matter

It's easy to criticize the U.N. Security Council's new resolution targeting Iran. But it might prove a surprisingly effective tool in tightening the noose on the regime in Tehran.

Wednesday's U.N. Security Council resolution sanctioning Iran marks a critical turning point in the U.S.-led efforts to target Iran's illicit activities. The resolution focuses on Iran's nuclear-weapons and ballistic-missile programs; the Islamic Revolutionary Guard Corps (IRGC), which is responsible for these programs as well as the regime's support for terrorism; and the Islamic Republic of Iran Shipping Lines (IRISL), which has been directly involved in proliferation shipments. The sanctions included in this resolution are, as U.S. Ambassador to the U.N. Susan Rice put it, "as tough as they are smart and precise." If anything, this new resolution is both too precise and purposefully vague. And therein lies its strength.

The list of 40 entities and one individual listed in the resolution's three annexes is extremely targeted. Employing such "smart sanctions" -- pinpointing the specific entities and persons involved in Iran's illicit conduct and holding them accountable while shielding the general Iranian public from old-fashioned, shotgun, regime-wide sanctions -- has been very effective. This tactic denies Iran's revolutionary regime the chance to deflect blame for the country's economic woes, while disrupting its ability to finance and transport material necessary for its nuclear-weapons and ballistic-missile programs. But the number of entities excluded from the resolution is even more telling than the list of those that made the final cut. Most entities designated this week, for example, had already been designated by the U.S. Treasury Department and/or the European Union. They have therefore already been subject to most of the impacts a U.N. resolution would hope to achieve, such as economic isolation by major financial institutions.

Consider Iran's shipping line, IRISL. The U.S. government first designated IRISL in September 2008 for facilitating the transport of cargo for U.N.-designated proliferators and falsifying documents and using deceptive schemes to shroud its involvement in illicit commerce. And, as the State Department noted at the time of the designation, IRISL had already been "called out by the U.N. Security Council as a company that has engaged in proliferation shipments."

But following up on U.S. and EU designations of entities like IRISL or the IRGC-controlled Khatam al-Anbiya construction company (also called Ghorb) by designating them at the United Nations as well is vitally important to the global sanctions regime. With critical countries such as China, Malaysia, Singapore, and others willing to do only the minimum to comply with Security Council resolutions, getting critical entities like IRISL and IRGC companies designated at the U.N. means wider implementation of sanctions.

Unfortunately, multilateral action is not only difficult to achieve, but can often lead to lowest-common-denominator decision-making. So while international consensus was being built for robust action at the U.N., Britain, the European Union, the United States, and others wisely pursued both unilateral and bilateral financial measures focused on IRISL, IRGC-affiliated entities, and other individuals and institutions facilitating Iran's illicit conduct. With the increased militarization of the Iranian regime and the blatant abuses of the IRGC-affiliated Basij militia, targeting entities affiliated with the Revolutionary Guard unilaterally while international consensus was being built to do so at the U.N. level was an effective strategy. That does mean, however, that this week's list of sanctioned entities is more of a reinforcement of prior actions than completely new ones.

And that's OK. Because though the lists of sanctioned entities are very precise, U.S. and other negotiators made sure that general "hooks" upon which additional actions could be "hung" were peppered throughout the body of the resolution. These will provide the United States and other states and multilateral bodies with the international imprimatur for further action. Put another way, the new resolution is most important not for the specific entities listed in its annexes, but for providing a foundation upon which further efforts to disrupt Iran's illicit activities can be built.

Note, for example, the multiple times the resolution "calls upon all States" to do things above and beyond checking the list of specifically sanctioned entities and persons, such as the call to "exercise vigilance" over transactions involving the IRGC that could contribute to "proliferation-sensitive nuclear activities or the development of nuclear weapon delivery systems." In plain English, this language effectively empowers states and other international bodies to take still more stringent action against the IRGC.

Broadening its sanctions against Iran's shipping company, the resolution "calls upon all States" to inspect "all cargo to and from Iran, in their territory, including seaports and airports, if the State concerned has information that provides reasonable grounds to believe the cargo contains items the supply, sale, transfer, or export of which is prohibited" by this or prior Security Council resolutions. The contrast between the specificity of the list of sanctioned entities and the fairly low standard of "reasonable grounds to believe" is a telling example of purposeful vagueness that could prove powerful in the hands of states inclined to get tough on Tehran.

Similarly, the resolution "requests" that all member states report to the U.N. "any information available" on "transfers or activity by Iran Air's cargo division or vessels owned or operated by [IRISL] to other companies" that might be related to sanctions evasion. The resolution "calls upon" states to "take appropriate measures" -- which, again, by virtue of being appropriately vague is appropriately empowering -- both to prohibit Iranian banks from opening branches, subsidiaries, representative offices, joint ventures, or correspondent relationships with banks in their jurisdiction and to prohibit financial institutions in their territories or under their jurisdiction from opening offices or accounts in Iran.

Indeed, the resolution specifically "welcom[es]" the guidance issued by the Financial Action Task Force (FATF) -- the multilateral technocratic body that sets international standards to combat money laundering and terrorism finance -- to assist states in implementing their financial obligations under two previous resolutions, 1737 (2006) and 1803 (2008). In particular, it highlights the FATF's warning to "exercise vigilance over transactions involving Iranian banks, including the Central Bank of Iran, so as to prevent such transactions contributing to proliferation-sensitive nuclear activities, or to the development of nuclear weapon delivery systems." So though the Central Bank of Iran is not specifically sanctioned, it is, broadly speaking, open game.

In February, the FATF named Iran to its new blacklist, recognizing that in support of its weapons programs, its crackdown on democracy, and its terrorist proxies, Tehran has continued to engage in deceptive financial conduct aimed at raising, moving, hiding, and accessing funds internationally. In line with the G-20's call to protect the international financial system from abuse, the blacklist identified countries with deficient "anti-money laundering and combating the financing of terrorism" (AML/CFT) measures. Iran received special designation on the blacklist; it was the only country whose illicit financial conduct merited a call for international countermeasures.

Contrary to conventional wisdom, Iran is highly sensitive to such actions. After one of the FATF's warnings, for example, Iran sent a delegation to lobby the agency despite not being a member. The FATF, however, dismissed Iran's claims that legislative changes had fixed its financial shortcomings, calling the new measures "skimpy" and noting their "big deficiencies." Indeed, the FATF blacklisted Iran even as it recognized the regime's "recent steps" to engage with the agency. The message seemed to be that the FATF would not mistake public engagement for substantive progress. Similarly, though Iran requested technical help from the U.N. Office on Drugs and Crime to set up a computer-based training center for its nascent financial intelligence unit, the FATF still highlighted the regime's "failure to meaningfully address the ongoing and substantial deficiencies" in its AML/CFT efforts.

The result is a sharp increase in the cost of doing business for the Iranian regime. European multinational companies are terminating business relationships with Iran, following the lead of major international banks in tightening the noose on Iran's financial system. Chinese and Malaysian companies may lap up available contracts, but many key technologies Iran needs for its oil and gas industries and for its nuclear and missile programs are only available in the West.

And now, for a change, existing sanctions might finally be seriously enforced. Just as important as the specific list of sanctioned entities and the broad invitations to take further action against Iran is the resolution's creation of a monitoring committee, including a panel of experts, to better enforce existing sanctions. Indeed, expert panels proved effective in strengthening sanctions on Sudan and Ethiopia. The "naming and shaming" power of the panel's findings could further influence firms and individuals considering whether to run the risk of doing business with Iran. Furthermore, an expert panel could also help the Sanctions Committee and U.N. member states by recommending ways to make the sanctions more effective. Such a monitoring committee would be particularly effective if it included among its experts individuals knowledgeable about export control and dual-use goods.

But implementation and follow-up is everything in the sanctions business. For the new resolution to make a difference, three things must happen.

First, states like Britain and the United States, regional bodies like the EU, and multilateral bodies like the FATF and G-20 must all act on the resolution's various "calls" to expand the resolution beyond the list of specifically sanctioned entities.

Secondly, the monitoring committee must demand substantive reports from member states upon which it can submit public reports with substantive recommendations for enhancing enforcement of existing sanctions.

Finally, unless the report finds that Iran has become fully compliant with its obligations, the Security Council must quickly follow up on the report with another round of sanctions. The resolution requests that the director general of the International Atomic Energy Agency submit a report to the Security Council within 90 days on whether Iran has established "full and sustained suspension" of its illicit nuclear activities. If the international community does not respond in a timely fashion, the entire premise of targeted and graduated sanctions -- the credibility of which are premised on consequences for ongoing illicit conduct -- will be irreparably damaged. One reason Iran has not been deterred by the sanctions put in place to date is that the deadlines of prior resolutions came and went with no timely follow-up. This delay undermined the whole sanctions enterprise, leaving Iran with the general sense it could survive sanctions, get by, and outlast the resolve of the international community. June 9's resolution offers an opportunity to reverse that trend and re-empower sanctions as an effective tool of foreign policy, one that doesn't require the use of force.

On their own, these sanctions will not solve the crisis over Iran's nuclear program. But wisely implemented and enforced, they could prove critical in preventing Iran from getting the bomb. And that's a very good thing.

Source: Foreign Policy

EU to Support Anti Money Laundering Efforts in Peru

The European Union is to provide support to Peru to combat money laundering from the illicit drug trade, the head of the EU’s delegation in Peru, Hans Allden, said. 

“It is a clear priority of the European Union to reinforce the ambitions of Peru and other countries (in Latin America) regarding money laundering, in a wider context of the battles against international crime,” state news agency Andina reported Allden as saying. 

Allden added that the EU would support Peru’s implementation of its 2012 to 2016 national plan against drug trafficking, and hoped that the plan would have measureable results. He said Peru’s plan to combat drug traffic from several fronts at the same time was ambitious, implementing efforts to combat money laundering at the same time as coca leaf eradication efforts and controls on chemical supplies in the coca-growing areas. 

This week Ricardo Soberon, head of Peru’s drug strategy agency, Devida, made a presentation to 14 EU ambassadors regarding the plan and Peru’s search to gain active cooperation from a series of partners —including the EU and Brazil as well as the U.S.— to stem the illegal drug trade. 

Peru is the world’s biggest producer of cocaine, according to the U.S. Drug Enforcement Administration. 

The global cocaine business has an estimated worth of about $85 billion. It is forecast that about 15 percent of those funds stay in the producer countries, which also include Bolivia and Colombia. The United Nations estimates that the drug trade in Peru accounts for about 6 percent of the country’s GDP. About 80 percent of the funds that are laundered in Peru come from the drug trade, while 5 percent come from tax fraud. 

Source: Peruvian Times

Publication: The Puppet Masters- How the Corrupt Use Legal Structures to Hide Stolen Assets and What to Do About It

Billions in corrupt assets, complex money trails, strings of shell companies and other spurious legal structures. These form the complex web of subterfuge in corruption cases, behind which hides the beneficial owner- the Puppet Master and beneficiary of it all.

Linking the beneficial owner to the proceeds of corruption is notoriously hard. With sizable wealth and resources on their side, they exploit transnational constructions that are hard to penetrate and stay aggressively ahead of the game.

Nearly all cases of grand corruption have one thing in common. They rely on corporate vehicles- legal structures such as companies, foundations and trusts -- to conceal ownership and control of tainted assets.

The Misuse of Corporate Vehicles takes these corporate vehicles as its angle of investigation. It builds upon cases, interviews with investigators, corporate registries and financial institutions, as well as a 'mystery shopping' exercise that provide factual evidence of a criminal practice. This approach is used to understand the nature of the problem and design policy recommendations to facilitate the investigative process by unraveling the complex world of CVs.

This lucidly written report is solidly built on step-by step arguments and designed to deliver practical, applicable and well substantiated recommendations. It is intended for use by policy makers in developing national legislation and regulation as well as international standard setters. It also provides helpful information for practitioners engaged in investigating corrupt officials and academics involved in the study of financial crime.

Download the FULL REPORT 

Source: World Bank

Serbia's goal is to eradicate money laundering or at least minimise it

by Michael Roberts - 01.06.2011

Prime Minister Mirko Cvetkovic said yesterday that Serbia's goal is to eradicate money laundering or at least minimise it.

Cvetkovic told a conference on combating money laundering and financing terrorism in the context of European integration of Serbia held in the Continental Hotel that these criminal acts lead to undermining the stability of all countries, threaten the reform and competition, foreign investment, security and reputation of the country.

He stressed that Serbia is trying to combat these crimes by making modern comprehensive legislation, improving the cooperation in the region as well as cooperation with international financial institutions.

The Prime Minister pointed out that this struggle is certainly long, difficult and exhausting, and pointed out that organised crime and money laundering are equal kinds of crimes.

Illegal acquisition of property is a major, but not the only motive for criminal activity, and to enjoy the benefits, criminals falsely show that the property is lawful, he explained and added that the key to a successful fight is to disable the creation of favourable conditions for the money to be introduced into legal channels.

Cvetkovic said that Serbia has been struggling for almost a decade against these acts, but noted that the key to a successful fight is good cooperation of all stakeholders, as well as international cooperation and exchange of data.

Strengthening cooperation between police, prosecutors and the National Bank of Serbia (NBS) will improve and strengthen the fight against money laundering, he said.

Head of the EU Delegation to Serbia Vincent Degert said that Serbia has intensified its efforts to combat economic crime and said that this type of crime remains a threat to democracy and the rule of law.

The EU noted that Serbia has made significant progress in this area in 2009 and 2010, he said.

He stated that building financial system must continue in order to detect and prevent money laundering and expressed the belief that there is political will to fight against economic crime.

Director of Cooperation at the Council of Europe Maria Ruotanen pointed out that the prevention of money laundering and financing terrorism is essential to the development of democracy and the rule of law, adding that the Serbian government in previous years has taken a lot of courageous steps in this area.

Today's meeting represents the beginning of a joint project of the EU and the Council of Europe in order to help the fight against money laundering and financing terrorism and the main beneficiary of the project is the Directorate for Anti-Money Laundering.

The project, whose implementation is three years and is worth €2.2 million, is financed by the EU and the Council of Europe.

Source: Balkans.Com

Liechtenstein Implements 3rd Money Laundering Directive

by Ulrika Lomas, Tax-News.com, Brussels


Liechtenstein has set out the goal of applying leading standards in the fight against money laundering and financing of terrorism by implementing the 3rd EU Money Laundering Directive of the EU, according to the jurisdiction's government.

The government revealed in a posting on its website that the adoption of the directive, a recommendation of the IMF, will be transposed into national law by way of a revision of the Due Diligence Act.

"The Liechtenstein financial centre can only assert itself in the tightened international competition among business locations if the highest international standards are followed in the application of the law. The evaluation by the IMF gave Liechtenstein good marks with respect to implementation and application of the international standards for the prevention and suppression of money laundering," the government stated.

The IMF report also issued several recommendations to improve the prevention of criminal acts. For instance, the IMF voiced some doubts whether the scope of the defensive measures is already extensive enough to fully cover the relevant FATF recommendations. In the fight against financing of terrorism, the IMF suggested modifying the definition of the offense, so that it covers all elements set out in the International Convention for the Suppression of the Financing of Terrorism.

However, the Liechtenstein government stated that at the time the IMF assessment was published in autumn 2007, it was already planning the implementation of the 3rd EU Money Laundering Directive and the anti-money-laundering recommendations of the FATF, as well as the FATF Special Recommendations for the suppression of terrorist financing.

A report and draft law by the Liechtenstein government are now available for implementation of the EU directive and the FATF Recommendations into national law. Other recommendations, such as enhancing the efficiency of international legal assistance and introducing the criminal liability of legal persons, will be incorporated into other ongoing legislative projects.

The Due Diligence Act originally entered into force in 2004 as part of implementation of the 2nd EU Money Laundering Directive, but the Government plans to expand due diligence obligations under the new revisions to include not just the core area of the financial sector, but also professions such as statutory auditors, accountants, and tax consultants.

Hitherto, the scope of the act has been limited to the acceptance and safekeeping of third-party assets and the formation of domiciliary companies. Under the revised law, it will be expanded to include relevant activities of natural and legal persons who, within their enterprises, are responsible for the formation of companies, exercise the function of general manager of a company, or make a domicile available.

With this expansion of due diligence, Liechtenstein says that it is confronting the danger that money laundering and terrorist financing may move to non-regulated areas.

The scope of due diligence continues to include banks and investment firms, investment undertakings and life insurances, the post office and exchange offices. The law will henceforth also cover casinos, real estate brokers, auditors, auditing companies, professional trustees, and lawyers, to the extent that they engage in financial transactions. Due diligence also covers persons and companies dealing in goods, if payment is made in cash and the amount exceeds CHF25,000 (EUR15,500).

The Government is also adopting international standards concerning the reporting requirement in the case of suspicion of money laundering and terrorist financing. In future, a reporting requirement under the Due Diligence Act will apply not only in the case of existing business relationships and completed transactions, but also in the case of attempted transactions.

"The Government is convinced that the reporting requirement in the attempt phase will enhance the level of knowledge of the FIU (Financial Intelligence Unit) with respect to critical phenomena in the financial center, thereby strengthening the early-warning system provided by the defensive measures," the government argued.

"Liechtenstein wants to take a leading position in the fight against crime and to meet international obligations. Especially in connection with the current debate concerning the protection of privacy, the Government has made clear that criminals cannot benefit from this protection," it added.

Source: Tax-News

Jersey lawyer criticises inconsistency of EU money laundering 'white list'

A Jersey lawyer specialising in the field of money laundering and financial services regulation has questioned the validity of the European Union's 'white list' of countries whose money-laundering controls are considered to be equal to those of EU member states, and which notably excludes leading offshore fund jurisdictions in Europe and the Caribbean.

Stephen Platt, an English barrister and chairman of BakerPlatt Group, queries the inclusion on the list of countries such as Russia, Argentina and Mexico, as well Australia and Canada, which have been adjudged to be less than 25 per cent compliant with the international standards established by the Financial Action Task Force.

Platt describes as "bewildering" the suggestion that the white list countries have higher standards of anti-money laundering controls than leading offshore financial services jurisdictions including the UK's Crown Dependencies.

"Having researched the background to some of the countries included, we question why countries that fall behind recognised international standards are on the list, while finance centres such as Jersey, the Bahamas and the Cayman Islands are not," says Platt, who advises governments and regulators on the implementation of regulatory and anti-money laundering rules.

An analysis by BakerPlatt and its alliance partner in London, Seven Bedford Row, notes that the first mutual evaluation report on Russia in 2001 by the European Committee on Crime Problems noted as a "critical deficiency" the country's lack of comprehensive laws and regulations implementing international standards on money laundering.

Although a second evaluation in 2004 noted significant improvements, it also found that numbers of investigations, prosecutions and convictions for money laundering were falling and know your customer procedures remained deficient.

A report on Argentina by Gafisud, a regional FATF offshoot for South America, noted inherent weaknesses in legislation that had the effect of impeding successful prosecution of money laundering, while no offence of terrorist financing existed. The country was criticised for its failure to provide statistics in anti-money laundering areas, preventing an assessment of the implementation of core requirements from being carried out.

The FATF's September 2004 report described the application of anti money laundering measures in Mexico as somewhat haphazard, and said the lack of mutual legal assistance legislation not only inhibited the country's ability to co-operate internationally, it also undermined national prosecutions. Bank and trust secrecy was also criticised as impeding investigations.

In addition, the lawyers say, while the FATF praised South Africa for developing a legislative structure to combat money laundering, the absence of a framework to combat the financing of terrorism was noted, whilst the framework in place was so new it needed time to be assessed for its effectiveness.

BakerPlatt notes that Jersey, which was not included on the white list, was assessed as 76 per cent compliant at the time of the island's last assessment by the International Monetary Fund in 2003. The most recent FATF assessments, issued in November last year, rated the Bahamas as 45 per cent compliant and Cayman as 78 per cent compliant.

However, five of the 13 countries on the list were far below this level, according to their most recent IMF assessments: Australia (24 per cent), Canada (14 per cent), Singapore (23 per cent), Switzerland (22 per cent) and the US (31 per cent).

"Australia's and Canada's staggering level of non-compliance with FATF recommendations makes it difficult for the EU to justify their inclusion on the white list on the grounds of 'equivalence'," Platt says.

"Given that the EU recently announced that it is to pursue infringement measures against 15 of its member states for failing to implement the Third Money Laundering Directive into national law, it would perhaps be better placed to give a jurisdiction such as Jersey the recognition it deserves, and the role model some of its member states appear to need, as the leader in the field of anti-money laundering."

Source: HedgeWeek

EU’s money laundering white list questioned

A lawyer spcialising in money laundering has put the validity of EU’s ‘white list’ in doubt

A lawyer specialising in money laundering and financial service regulation this week questioned the validity of the EU’s ‘white list’ of countries where money laundering controls are considered the same as EU member states.

Stephen Platt, BakerPlatt Group barrister and chairman, questioned why countries such as Russia, Argentina and Mexico could justifiably make the list and noted Australia and Canada, also on the list, were less than 25% compliant by the standards set by the Financial Action TaskForce (FATF) into money laundering controls, according to Tax-News.com.

Platt described as ‘bewildering’ that white list countries were regared as having a higher level of control of money laundering compared with leading offshore finance centres, including the British Crown Dependencies.

‘Having researched the background to some of the countries included, we question why countries that fall behind recognised international standards are on the list, whilst finance centres such as Jersey, the Bahamas and the Cayman are not,’ said Platt, who advises gand regulators on the implementation of effective regulatory and anti-money laundering rules.

Source: AccountancyAge

FATF Published Guidance Document for Precious Stones

The Financial Action Task Force has approved a detailed guidance document for the precious stones and metals trades. The Antwerp World Diamond Centre (AWDC) said in a release that it welcomed the move.

The document lays out how a more sophisticated a risk-based approach can be developed for those who deal in precious metals and stones, including the diamond industry. For the diamond business, this means that the specific concerns of the diamond industry will be taken into account more adequately.

Issues specific to the diamond trade addressed in the document include the physical inspection of diamonds at the official import-export offices, business with registered diamond dealers and bourse members, the Kimberley Process Certification Scheme for rough diamonds and a payment system through recognized and specialized banks.

AWDC notes that it was extensively involved in the consultation process that let to agreement on the guidance document, since the summer of 2007. The approval was announced at the FATF plenary in June.

FATF is an inter-governmental body that works to develop policies to combat money laundering and terrorist financing.

AWDC spokesperson Philip Claes commented, “We welcome the fact that, with its new guidance document, FATF has finally recognized the positive impact that the structure, regulation and supervision of the diamond trade in Antwerp has had in reducing money laundering risk.”

The Belgian government was also involved in finalizing and approving the FATF guidance. AWDC noted that it will work further with the Belgian authorities in establishing a more adequate and efficient money laundering regulation for the diamond industry, which will be based on the new FATF guidance document operate within the framework of Belgium’s implementation of the anticipated third EU directive concerning money laundering.

Source: IDEX

EU to continue to assist Russia in countering money laundering

The European Union is to allocate more than EUR 3 mln to help counter money laundering and the financing of terrorism in Russia.

An EU-financed project with a EUR 3.15 mln budget will run until 2010 and will be implemented by the Council of Europe based on the successful results achieved during the first project between 2003 and 2005.

The goal of the project is to assist to the Federal Financial Monitoring Service (Rosfinmonitoring) and other organizations in countering the legalization of revenues acquired by criminal methods and the financing of terrorism through implementing European and international standards, exchanges of experience and strengthening staff potential at key institutions within the money laundering countering system.

http://gielda.wp.pl/POD,6,a,1,b,1,c,11,index.html?P%5Bnumer%5D=8875519&P%5Bobr%5D=ifx&ticaid=13cb6

Joint Declaration of the Participants in the EU-Central Asia Forum on Security Issues in Paris

Driven by a shared commitment to developing and organising our long-term partnership on the basis of common objectives and undertakings to strengthen peace and stability in Central Asia, respect for human rights and the development of the rule of law and democracy, we met on the occasion of the First European Union - Central Asia Forum on Security Issues in Paris on 18 September 2008.

With the contribution of the international and regional organisations concerned, we have analysed security issues in Central Asia and defined concrete policy lines for our joint action in the following areas: combating illicit trafficking in arms, sensitive material, narcotics and human beings; combating terrorism and extremism; and cooperation in energy and the environment.

In line with the European Union’s Strategy for a New Partnership with Central Asia and on the basis of documents on the bilateral priorities of cooperation and of the regional initiatives, we agreed on the following points:

1. Strengthening political dialogue in all its forms

Convinced that socio-economic development, human rights, stability, peace and security are inseparable and mutually reinforcing, we intend to examine together the principal factors of tension and their consequences in the world today. It is our responsibility to create, through our exchanges and our joint initiatives, the conditions required to develop the potential of Central Asian countries. Political dialogue helps to lay the foundations for future action and shared work with a view to ensuring the political and socio-economic security and stability of the countries in the region.

We underline the importance of the EU Rule of Law Initiative in Central Asia. We will continue the dialogue on human rights with the EU, as well as in the framework of bilateral relations and multilateral organisations such as the UN and the OSCE, of which Kazakhstan will hold the chairmanship in 2010.

2. Strengthening regional stability

Broadening cooperation among the region’s countries, particularly on border security, is key to regional stability and security in Central Asia and to setting up cooperative management of regional risks and threats.

Our joint efforts will help to combat new risks and threats more effectively.

It is essential to reinforce regular exchanges of information and analyses to take into account possible risks of a political and military nature, especially through collaboration between analysis and research centres working on security, strategy and international relations issues in the Central Asian countries and in the EU.

The proliferation of weapons of mass destruction and their means of delivery represents a particular threat to peace and international stability. We reaffirm our support for the multilateral treaties and agreements as well as international initiatives on non-proliferation, and we agree to step up our efforts with a view to their full implementation. The commitment of the Central Asian countries to non-proliferation and disarmament was confirmed by the signing of the Treaty on a Nuclear-Weapon-Free Zone in Central Asia on 8 September 2006 in Semipalatinsk.

The creation of a nuclear weapon free zone will help to maintain and strengthen peace and stability internationally and regionally and promote non-proliferation in all its aspects.

We intend to pool our experience and cooperate in establishing effective export control systems, including conventional arms exports, strengthening border controls and securing sensitive facilities and sources of nuclear, radioactive, biological and chemical material, in order to prevent any risk of proliferation and procurement by terrorist groups.

We express our grave concern about growing nuclear proliferation crises and the risk of destabilisation to the non-proliferation regime, and we are in favour of compliance with international non-proliferation obligations, particularly the resolutions of the United Nations Security Council and those issued by IAEA Board of Governors.

We underline the importance of boosting the role of the IAEA in the peaceful uses of nuclear energy.

3. Stepping up the fight against terrorism

Combating terrorism in all its forms and expressions must be conducted within the framework of the international treaties and relevant United Nations Resolutions while respecting human rights, which guarantees its effectiveness.

We agree to continuously fight the financing of terrorism, in accordance with the recommendations of the Financial Action Task Force (FATF).

We consider that enhanced cooperation at all levels among the countries concerned, in both Central Asia and Europe, is a condition necessary to the successful achievement of our objective.

We believe it important to adopt measures to prevent the action of terrorist organisations that are engaged in illicit activities and that are banned by Central Asian and EU countries.

4. Developing cooperation between Central Asia and the European Union in rebuilding Afghanistan and stabilising its situation

We are mindful of the stabilisation and development of Afghanistan, factors which contribute to consolidating regional and global security. In referring to the conclusions of the International Conference in Support of Afghanistan held in Paris on 12 June, we reaffirm our determination to actively contributing to their implementation, particularly by reinforcing our political exchanges and economic cooperation with this country, as well as our cooperation with the relevant international organisations, especially the United Nations and the United Nations Assistance Mission in Afghanistan (UNAMA).

5. Joining forces to fight illicit trafficking in arms, sensitive materials, narcotics and human beings

The EU will increase cooperation with Central Asian countries to strengthen and implement legal measures to more effectively combat all forms of illicit trafficking: arms, sensitive materials, narcotics, psychotropic substances and their precursors, and human beings. The adoption of national strategies on integrated border management could be an effective means of ensuring internal stability in Central Asia. The Dushanbe Conference on 21 and 22 October 2008 will review the mechanisms for enhancing international coordination.

Concerned by persistently high drug production levels in Afghanistan and by the development of opium-to-heroin conversion activities, we welcome the adoption of United Nations Security Council Resolution 1817 on the fight against the trade in precursors. We are committed to implementing its provisions, particularly those aimed at increasing international control of precursors. We undertake to enhance cooperation within the framework of the 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and the Paris Pact Initiative. A meeting of experts based on an enlarged troika format is planned on 1 October 2008 in Brussels and will help to strengthen the control of these products at a regional level. On this occasion, discussion focusing on updating the drug action plan will begin.

We believe that it is essential to develop and implement projects/programmes to improve, in their fight against narcotics trafficking, the law enforcement capacities of the countries bordering Afghanistan which are most at risk from the trafficking in narcotics originating from Afghanistan.

We are thoroughly convinced that the development of cooperation among Central Asian countries, with the participation of international organisations and donor countries, will ensure the adoption of effective measures to fight this common scourge. In this connection, we welcome the creation of the Central Asia Regional Information and Coordination Centre (CARICC) for the fight against narcotics trafficking.

6. Strengthening cooperation in energy, the use of natural resources and the environment

We will reinforce our cooperation in energy without prejudice to current cooperation.

We consider that the harmonisation of the interests of energy consumers and suppliers, transit states and transnational companies is a guarantee of international energy stability. Energy security in Central Asia and the EU presupposes common rules and a reasoned choice of new transport options involving all the countries concerned. We reaffirm the importance of active cooperation in the development of different hydrocarbon transport corridors that aim to ensure a guaranteed and reliable supply for European markets and other international markets.

In light of the conclusions of the energy ministers’ conference in Baku in November 2004, our cooperation will focus on the development of regional energy markets and strengthening the financing capacities for new infrastructure; implementation of open, forward-looking and proactive energy policies; setting up an investor-friendly environment by according an appropriate role to market mechanisms; and lastly improving energy efficiency in the various uses of primary energy to reduce greenhouse gas emissions, lessen the cost to economic growth and free up additional capacity.

We also note the necessity of enhancing our cooperation in renewable and alternative energies as well as in reliable, sustainable, low-carbon technologies. We will achieve this by comparing energy scenarios and ensuring cooperation among energy industries, particularly upstream and downstream of the hydrocarbons industry.

We are in favour of developing cooperation to jointly exploit hydro-energy resources, taking the interests of all the region’s countries into consideration.

The European Union will provide support to the development of hydraulic energy in Central Asia that will also help to reduce greenhouse gas emissions without prejudice to the region’s environmental security.

Conscious of the security implications of climate change, we are in favour of adopting long-term strategies to prevent the climate effects of human activities and in favour of the accession to multilateral instruments related thereto. We suggest that a dialogue be launched on how to address the threats posed by climate change in Central Asia in order to strengthen EU and Central Asian cooperation on this issue.

The European Union will pay particular attention to regional cooperation in Central Asia on the rational, efficient and sustainable use of hydraulic, hydro-energy and fuel resources and the environment.

The EU is ready to use its study and cooperation capabilities to facilitate the implementation of best practices, availability of drinking water and sanitation, as well as fighting climate change, inter alia, by increasing energy and hydraulic efficiency while safeguarding the ecological balance in the region.

We support the European Union’s Water Initiative (EUWI).

7. Helping to prepare a comprehensive approach to security in Central Asia

In a world marked by recurrent instability, we will strengthen our partnership and encourage the efforts of countries and regional organisations that can help to create a genuine area of cooperative security in Central Asia.

In this respect, we welcome the creation of the United Nations Regional Centre for Preventive Diplomacy for Central Asia

Source: France Diplomatie

Cyprus: Money laundering law to EU standards

The Turkish Cypriot Parliament approved the ‘Money laundering crime prevention Law’ at Monday’s sitting

The National Unity Party (UBP), who has ended its Parliamentary boycott, also voted for the law. The draft bill was created using the current ‘Money laundering crime prevention Law’ as a basis and included suggestions from the European Union (EU) adjustment works and the negativities in the current practice. The law, which was passed by a majority, defines the procedures and principles to prevent the laundering of income from crime and the financing of terrorism.

EU standards will be ensured
Minister of Finance Ahmet Uzun, who gave the first speech during the debate on the draft bill in the Parliament General Assembly, said that they are aiming to overcome the inadequacies of the current procedure. Uzun stated that last year the EU Financial Action Task Force (FATF) committee was planning to show northern Cyprus as being amongst the countries laundering money but they did not use the fact that there are no financial police operating to EU standards; and following that there was 1½ year’s worth of work to be done by officials and professionals from Turkey. After the draft bill is approved the second step will be to set up a financial police organisation. The Minister said that in this way EU standards will be ensured in the prevention of ‘laundering’ of tainted money.

Committee studies
While answering those claiming that the draft bill is still immature CTP MP and President of Economy, Finance, Budget and Planning Committee Alpay Afsaroglu said that the committee had held 5 meetings already concerning this draft bill in addition to 4-5 study sessions. He stated that one incident concerning a person convicted in Britain for drug smuggling was dealt with in the framework of ‘The law for the prevention laundering of criminal gains’ and gave information regarding the incident. The bill, he said, will prevent crimes. This is also the general understanding around the world: “It seems that in this way it will be easier to fight against this crime.”
They had examined legislation from many countries including Turkey, Afsaroglu said, and they were not expecting serious problems to come up in the draft though if problems did surface they can be fixed. He continued to say that after the September 11 attack in the US the financing of terrorism was also included in the compass of the law and said that “laundering of criminal income” will be determined by the courts and that the new law also defines the “financing of terrorism” which is almost standard in many countries.

Prime Minister’s speech
In his speech, General President of CTP/BG, Prime Minister Ferdi Sabit Soyer congratulated the members of the committee and everyone who contributed to the law for their hard work.
Soyer explained that in time the law for the ‘Prevention of money laundering’ will be accepted in north Cyprus as after September 11 terrorism has been discussed around the world and certain rules were laid down first in the UN and then in the EU. The PM reported that the Greek Cypriot side makes propaganda against northern Cyprus by saying that it is “a paradise for the laundering of criminal money.” The government has now shown that it is serious in its intent to prevent tainted money entering the country, that they attend meetings of international institutions with the Turkish delegation, that they have reached a certain point in the works and that the draft has been prepared in this framework.

Soyer said that they will go to FATF’s meeting in the middle of February with this new law and will show that northern Cyprus has laws conforming to UN and EU standards.

http://www.observercyprus.com/observer/NewsDetails.aspx?id=2618

Call For Netherlands Antilles To Be Taken Off EC Tax Blacklists

Alex Rosaria, the State Secretary of Finance for the Netherlands Antilles, has this week called on the Tax Directorate of the European Commission to remove the jurisdiction from tax haven 'blacklists' in some EU member states.

Mr Rosaria argued that the Netherlands Antilles is committed to providing a leading edge financial service industry with high-end supervision in line with international standards to protect the consumer.

He observed that: “We are an active and a complying member of various international organizations such as the OECD, the Egmont Group, the Financial Action Task Force (FATF) and the Caribbean Financial Action Task Force (CFATF)."

The Netherlands Antilles is recognized by the OECD as a co-operative jurisdiction; in April 2008 the Egmont Group gave the Netherlands Antilles its seal of approval, and the IMF in its most recent Article IV Consultation concluded that “The financial sector of the Netherlands Antilles is broadly healthy".

As Mr Rosaria explained on Monday:

“Any reference to us being a tax haven” is totally misguided, contradictory and unjust. If we were a tax haven Spain would not have concluded a Tax Information Exchange Treaty with us in June 2008”.

Mr Rosaria revealed, however, that the reaction from the Tax Directorate so far has been somewhat unsatisfactory, explaining that:

“The EC claims it can not intervene on our behalf to correct the above mentioned unjust inclusion on black lists of some EU members because EU Members are autonomous in their tax matters."

"This statement seems very curious especially when we note that in the case of imposing actions to promote what the EU calls good tax governance the EC does have the authority to act on behalf of the EU Members."

“Why does the argument of autonomy of the individual EU Member not apply when the EU takes actions to promote good tax governance on the Netherlands Antilles?"

"And why does it apply when the Netherlands Antilles request the EC, not for a favor mind you, but to simply correct an error that has been made by some EU members?" Rosaria asked.

The State Secretary for Finance concluded: “The EC must understand that we demand a level playing field, that we can not be held to higher standards than is demanded of other OECD Member and especially that I must do everything in my power to guard our international financial services industry from further erosion. Black listing seriously undermines the competitiveness of the Netherlands Antilles’ financial services sector and consequently the well-being of our people."

A comprehensive report in our Intelligence Report series examining offshore confidentiality is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report1.asp

Source: Tax News