Indian Govt signs MoUs with three countries to fight terror financing

The MoUs will enable the country’s Financial Intelligence Unit to share information with foreign FIUs and to obtain information from them on money-laundering activities

The government has signed memoranda of understanding with Russia, Malaysia and Brazil this year for combating money laundering and terror financing.

Negotiations with more than 30 other countries is under process for enhancing international cooperation in fighting illegal routing of money for terror and Hawala like operations, a senior finance ministry official has said.

India has also signed MoUs in this regard with Mauritius and the Philippines in 2008.

The MoUs will enable the country’s Financial Intelligence Unit (FIU) — a government agency to investigate and disseminate information between financial and law enforcement agencies for identification of suspicious money laundering — to share information with foreign FIUs wherever considered necessary and reciprocally to obtain information from them on money-laundering activities, the official said.

The government, in the same context this year, received 69 requests of information from foreign financial intelligence units while it sent 17 such requests to other countries.

The Union government has also established Joint Working Groups (JWG) — comprising senior officials from enforcement agencies — with a number of countries like the US, Germany, the UK and Russia on various operational issues relating to terrorism and other crimes including money laundering and drug trafficking.

A joint meet was held with Russia this year, the finance ministry official added.

The FIU-IND in relation to foreign FIUs screens and processes requests from foreign FIUs, disseminates information to foreign FIUs, establishes and maintains relationship with foreign FIUs, and facilitates, administers and negotiates Memoranda of Understanding (MoUs) with foreign FIUs.

According to established government guidelines, the MoU envisages that the information or documents obtained from the respective authorities will not be disseminated to any third party, nor be used for administrative, prosecutorial or judicial purposes without prior consent of the disclosing Authority.

The information acquired will be treated as confidential and will be subject to official secrecy. The MoU also provides that authorities will jointly arrange, consistent with the legislation of their respective countries, for acceptable procedures of communication and will consult each other with the purpose of implementing the Memorandum, the guidelines state.

The guidelines further add that the authorities would not be under any obligation to give assistance if judicial proceedings have already been initiated concerning the same facts to which the request is related. Further, the MoU may be amended or revoked at any time.

Source: Live Mint

Philippines: Financing of terrorism not yet a crime

by Kimberly Joyce R. Veloso (abs-cbnNews.com/Newsbreak)

Anti-Money Laundering Council (AMLC) executive director Vicente Aquino reported today that financing of terrorist activities has not been clearly defined as a crime under Republic Act 9372, otherwise known as the Human Security Act of 2007.

"The financing of terrorism has not been expressly stated as a crime. In short, financing of terrorism is not a crime under the Human Security Act," Aquino said during the financial intelligence unit’s meeting with the Senate and Congressional panels.

He pointed out that the criminalization of terrorism has been included in the recommendations made by the World Bank-Asia Pacific Mutual Evaluation of the AMLC, including freezing and seizure of terrorist assets.

Members of the congressional panel on anti-laundering, Reps. Jose Lacson, Jaime Lopez, Teddy Boy Locsin, and Rodolfo Plaza and their Senate counterpart Senator Edgardo Angara, suggested that the AMLC should act on the inclusion of financing of terrorist activities in the crimes covered by the Anti-Money Laundering Act (AMLA).

Aquino explained that even with the implicit inclusion of financing of terrorism in the AMLA, such deed is covered under the definition of crimes in the Anti-Terrorism Act.

In the AMLA, or Republic Act 9160 of 2001, money laundering is defined as "a crime whereby the proceeds of an unlawful activity as defined in the AMLA are transacted or attempted to be transacted to make them appear to have originated from legitimate sources". In 2002, certain provisions on the AMLA regarding the addition of particular functions to the AMLC were made.

The next mutual evaluation of the AMLC in the Philippines will be held on September 22 to October 6 this year, with legal and financial experts of the FATF member countries, the World Bank-International Monetary Fund as evaluators.

Source: Newsbreak

Philippines extends freeze order on suspected terrorist's assets

The Court of Appeals on Tuesday granted the government's petition to extend for another four months the freeze order on several bank accounts of suspected terrorist Hilarion del Rosario Santos, alias Ahmed Santos - the alleged founder of the terror group Rajah Solaiman Movement (RSG).

In a five-page resolution penned by Associate Justice Teresita Dy-Liacco Flores, the CA’s Special Second Division granted the ex-parte petition filed by the Anti-Money Laundering Council to extend the freeze order against certain properties and assets in the name of Santos or his aliases, Hilarion delos Santos Jr, Hilarion del Rosario Santos III and Ricardo Ayeras.

The original freeze order issued by the CA expired last September 26, prompting the Office of the Solicitor General, representing the AMLC, to ask for an extension and for the junking of respondent’s motion to lift the freeze order.

With the CA’s ruling, the freeze order on Santos’ assets was extended until January 25, 2009.

The appellate court agreed with the argument of the OSG that the freeze order does not prevent respondent from using or earning a living from said properties, and that its purpose was merely to prevent the disposition of the subject property pending the completion of the AMLC’s investigation for possible filing of a civil forfeiture case against respondents.

“What the freeze order seeks to prevent is only the disposal or alienation of said properties during the effectivity of the said order. The Court notes that aside from Santos’ bare assertions that he is not engaged in any unlawful activity, he has not attached any proof of his innocence," the CA ruled.

The Court said that the AMLC presented prima facie evidence of his illegal activities that led to the issuance of warrants of arrest against him for rebellion and 21 counts of kidnapping and serious illegal detention with ransom, which the CA noted was needed by the group to fund its terrorist activities.

Santos converted to Islam while working in Riyadh, Saudi Arabia in 1991 and where he received bomb-making training. He was captured by military officials in October 2005 for involvement in organizing and planning bomb attacks in predominantly Christian cities in the country and was subsequently convicted of rebellion.

He was arrested with his wife Fatima and five other people while they were sleeping in a hideout in southern Zamboanga city.

The RSM, which he founded, is believed to have forged an alliance with the Abu Sayaff and the regional militant group Jemaah Islamiyah, both of which are linked to the al-Qaeda.

The military has been linking Santos, his brother Dawud and their group to the Valentine’s Day bombing in 2005 that killed eight people and injured a hundred others and to the bombing of a passenger ferry off Bataan last year that claimed over a hundred lives.

Also, the group has been linked to the alleged plot to blow up the US embassy in Manila, the kidnapping of 21 foreigners in Sipadan, Malaysia and the foiled Lenten holiday bombing in Malate in 2006.

During his arrest, Santos was said to have been getting foreign funding through his bank account.

His group also reportedly established a training camp in his family's property in Pangasinan, where an Al Qaeda suicide cell allegedly trained before the 9/11 attacks.

Santos’ capture prompted the US government to pay P26 million reward to two tipsters who provided information for his arrest, as he was also tagged for alleged involvement in the September 11, 2005 bombing of the World Trade Center in New York and related attacks.

In its ruling, the CA likewise ordered that the Register of Deeds of Pangasinan and Quezon City to annotate on the respective transfer certificates of titles (TCT) and the freezing of several of Santos’ properties until the duration of the freeze order.

Among these assets were a property located at no. 50 Purdue St. cor. Ermin Garcia in Cubao, QC; and a 25-hectare property in Barangay Mal-Ong in Anda, Pangasinan.

The BPI Family Savings Bank in Kalentong, Mandaluyong was likewise ordered to continue to freeze Account no. 5036217881 under the name of Ricardo Ayeras, and all related web accounts.

Source: GMANews.TV

U.S. Intelligence Chief Outlines Successes Against Terrorism

Michael Hayden, the director of the Central Intelligence Agency, spoke recently of the international community's successes against terrorism in key regions of the world and diminished worldwide support for al-Qaida.

Hayden told the Washington-based Atlantic Council of the United States November 13 that the United States - in cooperation with partners such as Iraq, Saudi Arabia, Indonesia and the Philippines - has greatly diminished the reach of several terrorist groups.

Al-Qaida in Iraq, for example, "is on the verge of strategic defeat," with the flow of money, weapons and foreign fighters into Iraq now "greatly diminished," Hayden said.

And al-Qaida's operational arm in Saudi Arabia largely has been defeated, he said. Indonesia has made inroads in detecting and disrupting terrorist plots in the past three years as a result of what he called "aggressive action by one of our most effective counterterrorism partners." Filipino allies have kept the pressure on the Abu-Sayef group, Hayden said, limiting its effectiveness.

While the remote, tribal areas on the Afghanistan-Pakistan border remain problematic, progress has been made, according to the CIA director. He said the practice of terrorists taking refuge in Pakistan's Federally Administered Tribal Areas is lessening. Due to cooperation among the Pakistan government, its military and the U.S. intelligence community, terrorist networks have lost many "decision makers, commanders, experienced and committed fighters" who, Hayden said, planned attacks against Europe and the United States.

The Pakistani government and military "deserves great credit for its current campaign against extremists," he added. More al-Qaida leaders have been killed or captured "in partnership with our Pakistani allies than ... with any other partner around the world," Hayden said.

The CIA official cited another reason for optimism in the fight against terrorism: "Some hard-line religious leaders are speaking out against al-Qaida's tactics and its ideology." Hayden cited generic polling showing declining support for al-Qaida and Osama bin Laden in predominantly Muslim countries.

More and more Muslims "are pushing back against the senseless violence and flawed worldview of al-Qaida," he said. Credible, authentic, influential Islamic voices are speaking out and "refuting al-Qaida's twisted justification for murdering innocents" as well as its ideology seeking to erase the distinction between combatants and noncombatants.

Besides Pakistan and Indonesia, Hayden praised the counterterrorism efforts of other U.S. partners such as Saudi Arabia and Iraq. Military and law enforcement activities and even efforts addressing the conflict of ideas have resulted in improvements in the Middle East and Southeast Asia, he said. "I have always said that the civilized world will win this fight when we win the war of ideas," he added.

NEXT STEPS

Efforts to defeat al-Qaida in the near future will continue to center on Yemen, Somalia and the Afghan-Pakistan border, according to Hayden. Intelligence suggests that some veterans of terror operations in Iraq are now drifting to other regions, such as North Africa and the Arabian Peninsula, in search of new action.

Even though al-Qaida has suffered serious setbacks in Iraq, Afghanistan and Pakistan, the intelligence-agency director said, "it remains a determined, adaptive enemy." Al-Qaida is still "the most dangerous threat we face," he told the Atlantic Council's Global Intelligence Forum.

In Hayden's opinion, al-Qaida's base of operations on Pakistan's border with Afghanistan remains "the single most important factor today in the group's resilience and its ability to threaten the West." He contends that the remote, tribal areas along the Afghan-Pakistan border have supported terrorist financing, recruiting, training and plotting in the past.

While al-Qaida-related operations in the tribal regions do not rise to the level of activity that once existed in Afghanistan, Hayden said, its recent efforts to destabilize Pakistan are worrisome.

The Pakistani army has been fighting extremists "forcefully and with considerable success since early August," Hayden said. The Pakistanis have a multibrigade operation under way in the tribal area of Bajaur, and while they have sustained losses, "they are also imposing significant casualties on our common enemy."

But when al-Qaida is dealt a blow, Hayden said, its senor leadership recalibrates. "They constantly look for ways to make up for losses, extend their reach, take advantage of opportunities, and we're seeing that ... in some places like ... Somalia or Yemen."

Yemen has witnessed an unprecedented number of attacks in 2008, Hayden said, including two against the U.S. Embassy. The sophistication of attacks and the range of targets are broadening. Hayden said that, like what has happened elsewhere, terrorist cells in Yemen "are operating from remote, tribal areas where the government has traditionally had very little authority."

That al-Qaida tends to gain strength only in isolated, ungoverned territories "may be the most damning thing we can say about this organization," Hayden said. It can subsist only beyond the reach of civilization and the reach of the rule of law.

HANDLING THE TRANSITION

As head of the CIA, Hayden's service may continue into the Obama administration, although frequently a new president appoints his own director. Asked about his interest in continuing in his present position - which includes conducting daily presidential intelligence briefings at the White House - the director said he serves at the pleasure of the president, but would consider staying if asked.

As this is the first wartime presidential transition for the United States in 40 years, some thought is being given by transition officials to keeping some Bush appointees, at least temporarily, so the transfer of power from one administration to another is as seamless as possible.

Hayden said members of the Bush administration have been directed to "make this the smoothest transition in recorded history." With the United States on a wartime footing and al-Qaida already having made a critical remark about President-elect Barack Obama on the Internet, the director said, efforts are under way to get a new team ready for any contingency as swiftly as possible "so that there is no diminution in the ability of the Republic to defend itself."

Video of the forum ( http://www.acus.org/event_blog/cia-director-event ) is available on the Atlantic Council Web site. A transcript of Hayden's remarks ( https://www.cia.gov/news-information/speeches-testimony/directors-remarks-at-the-atlantic-council.html ) is available on the CIA Web site.

For more information about U.S. policy, see Confronting Terrorism ( http://fpolicy.america.gov/fpolicy/security/counterterrorism.html) on America.gov.

Source: NewsBlaze

Kenya: Fix loopholes in AML bill

They are a common feature in almost every society on earth; those overnight millionaires without known employment or businesses.

And they lead profligate lives. One would think planting cash was their profession. But, nay, most of them indulge in criminal activities such as drug pushing, pyramid investment schemes, corruption, computer fraud, child trafficking and gun running.

It is money got from such unlawful ways that they clean (launder) by concealing sources, then transfer to local and foreign banks or legitimate businesses.

Kenya’s economy is still reeling from the devastating effects of last year when several pyramid schemes collapsed with depositors’ billions of shillings.

It was not an isolated event the world had seen in recent years. In the Philippines, for example, close to two million people invested in pyramid schemes, having been promised weekly returns as high as 60 per cent. The hapless investors poured in their pensions, cash from abroad, and even sold homes to increase personal stakes.

The schemes collapsed with about US$ 1.4 billion of investors’ money, with their effects rippling over the entire country. Forced to repay the loans, police officers resorted to extortion while on patrol, while destitute investors turned to criminal activities.

In Albania, pyramid schemes collapsed between 1996 and 1997 when the investments accounted to a half of the country’s Gross Domestic Product. Big players of the schemes transferred out of the country more than 93 per cent (US$500 million) of its deposits.

The collapse of the schemes caused a civil war in which 2,000 people were killed and 3.5 million others displaced.

In Kenya, experts have argued that some of the economic scandals that have taken place such as Goldenberg and Anglo Leasing were examples of high-level money laundering.

It is for this reason that a number of organisations have been rooting for legislation to fight money laundering. They include the Centre for Governance and Development, the International Commission of Jurists and some members of the Parliamentary Initiatives Network.

The government first introduced the Proceeds of Crime and Anti Money Laundering Bill in 2006 but it lapsed after the First Reading (formal introduction). It was re-tabled last year but it was frozen with the end of the life of the Ninth Parliament last November.

I sighed with relief when MPs concluded debate on the Bill last Thursday upon its re-introduction, then referred it to two departmental committees for fine-tuning. The Bill awaits scrutiny by members of Finance and Trade committee on one hand, and those of Administration of Justice and Legal Affairs on the other.

It is instructive that some MPs already raised the red flag over the Bill, saying it was the work of the USA and foreign multilateral donors. I leave that to the Finance minister Amos Kimunya to explain, but my take is that Kenya urgently needs a law to fight money laundering.

But first, the highlights of the Proceeds of Crime and Anti-Money Laundering Bill, 2008.

It has a number of clauses defining acts that will be deemed as money laundering, associated offences and property that will be seen as having been acquired through criminal activities. They shall include assisting criminals hide properties acquired unlawfully as well as aiding others to benefit from proceeds of crime.

If enacted, the Bill provides that it shall be a crime to acquire or possess proceeds of crime. Anyone who fails to report any suspicion regarding the proceeds of crime will have committed an offence. To knowingly transport, transmit, transfer or receive a monetary instrument or anything with the intention of committing an offence will be illegal.

Giving tips to suspects of money laundering or providing false information to officials or bodies regulating the Act shall be an offence. Transmitting more money or monetary instruments (travellers’ cheques, personal cheques, bank cheques, money orders, investment securities, etc) into or out of Kenya shall be declared in a prescribed form at the point of entry or exit.

There are to be set up entities to implement the Bill if passed into law: The Financial Reporting Centre, the Anti-Money Laundering Advisory Committee, the Assets Recovery Agency, and the Criminal Assets Recovery Fund. The he Financial Reporting Centre is to identify proceeds of crime and fight money laundering, while Anti-Money Laundering Advisory Committee or of Financial Reporting Centre.

The Assets Recovery Agency shall be a semi-autonomous outfit under the Attorney General, charged with the duty of recovering any proceeds of money laundering. It shall also administer the monies of Criminal Assets Recovery Fund.

However, the Bill has so many weaknesses that the departmental House and MPs should fix before passing it. Last year, the Centre for Governance and Development hinted at most of the loopholes in its July edition of Bills Digest.

For example, the Bill has no links with other offences that may generate proceeds or assets that may become the subjects of offences under the proposed law. The UN Convention against corruption refers to such vices as predicate offences and they include organised crime, terrorism, human, drug, and arms trafficking, extortion, forgery, fraud, insider trading, and kidnapping.

Secondly, due to the complex nature of money laundering, the Bill should block avenues used by money launderers to dodge justice on legal technicalities. It should also lengthen the minimum period within which legal proceedings may be initiated. That is the case in best international practices.

It should also compel reporting institutions to develop a policy on training staff on money laundering and also criminalize anonymous accounts and those that are obviously in fictitious names.

The Bill should make specific provisions for those vulnerable to money laundering such as the Head of State, ministers, politicians, top private company bosses, senior public servants, judicial, military and other uniformed officers.

And records containing information on active customer accounts should not be destroyed after seven years as proposed by the Bill.

And, pray, why should most members of the proposed 17-member Anti-Money Laundering Advisory Committee be busy, senior public servants? This gives the government undue power and influence over the committee.

There is no reason why the Assets Recovery Agency should be under the Attorney General who shall also appoint its director. The agency should be delinked from the AG for independence, while its director ought to enjoy security of tenure.

This is is a timely piece of legislation.

http://www.nationmedia.com/dailynation/nmgcontententry.asp?category_id=1&newsid=123057

Tracking the terrorist money trail

By DAVID DIZON
abs-cbnNEWS.com

How do banks find out if their clients are financing terrorists?

Gunawan Husin, head of the business community and management department of the Royal Bank of Scotland, posed this question to local law enforcement officers, including officials from the Anti-Money Laundering Council, in an anti-terrorism workshop Tuesday in Quezon City.

Husin, whose organization is a member of the Consortium for Countering the Financing of Terrorism (CCFT), said gone are the days when financial institutions could focus merely on making a profit without assessing the possible risks of becoming bankers of terrorist groups.

He said that despite stringent measures in financial and security areas, formal banking systems continue to be misused by terror-linked groups to raise and move funds to operational cells, which in turn are used for terror attacks.

"The financial sector is the first line of defense against terrorists. Since terrorists cannot thrive without money, it is important to strengthen our line of defense here even before the terrorist act is committed," he said.

Husin said law enforcement officials should focus less on the amounts being moved by the shell companies and more on how the money is being used to continue terrorist activities.

A report by the United Nations Monitoring Group in 2004 reveals that aside from the September 11 terror attacks, many terrorist attacks in the past did not require significant amounts of money to carry through.

"This only shows that terrorists don't have to have large amounts of cash to push through with their plans. It is these small, incremental amounts being coursed through nonprofit groups and charities that should be monitored especially if they are already being used for terrorist activities," he said.

John Solomon, head of World-Check Asia’s terrorism and insurgency research unit, said misuse of charities for financing terrorists is something already known to financial communities around the world. After all, charities are easy to form, have access to substantial funds, could be cash intensive, enjoy public trust and have legitimate reasons to operate in areas of conflict where terror groups roam.

He said banks should do their homework and know their clients better to find out if they have direct or even indirect links to terror groups.

"You have to follow the people involved and not the shell companies because it’s easy to change the names of the front organizations. Know-your-customer terrorism intel is the bedrock of countering terrorist financing," he said.

Husin said jihadist groups could infiltrate a charity organization by placing a member as a key financier of the charity. He said some nonprofit groups even connive with corrupt bank officers or government officials to bring the money to the terorist organization.

Tell-tale signs

Husin said there are several tell-tale signs on whether a charity organization's account could be used to finance terror groups. These include:

- An account opened in the name of a legal entity that is involved in the activities of an association or foundation whose aims are related to the claims or demands of a terrorist organization

- Account opened in the name of a foundation or an association, which contain sub-accounts in multiple currencies

- Account opened in the name of a foundation or an association with additional request for corporate ATMs and credit card account

- High asset value of a foundation or an association does not correspond to the charity’s information, as declared during account opening

He said the transaction profile of the account holder is also important including mixing of cash deposits and monetary instruments that do not appear to have any relation to the normal use of the account. He said large and frequent cash withdrawals and deposits made from and to a foundation’s business account is also suspicious.

He also pointed out that multiple accounts structure for a foundation or association is illogical.

"Heavier suspicion should be made if withdrawals and deposits are often made through different accounts, rather than one principal charity account. It is also suspicious when there are frequent internal transfers made between the accounts," he said.

He said use of wire transfers is also suspicious especially when a charity uses multiple accounts to collect and then funnel funds immediately to a small number of beneficiaries.

He said other tell-tale signs include sending or receiving funds by international transfers from and to locations of specific concern and transfers made to other banks without indication of the full name of beneficiary.

Finally, he said unusual or drastic shifts in financial flow of a charity organisation based in a country suspected of providing covers for terrorist financing or a charity organization dealing with location of concern, may provide warning signs of impending attacks

Individual accounts

For individual accounts, he said a client could also be considered as a terror financier if he refuses to provide information required to open the account and even attempts to reduce the level of information provided to the minimum, or provides information that is misleading or difficult to verify.

Husin said some individual accounts of terror supporters have unexplained inconsistencies arising from the process of identifying or verifying the customer including previous or current country of residence, country of issue of the passport, countries visited according to the passport, and documents furnished to confirm name, address and date of birth.

He said another red flag is when a client requests to open multiple accounts at a single bank with no apparent legitimate purpose. He said this is even more suspicious if the accounts have multiple individuals with signing authority, where these individuals have no relation among each other, either family or business.

Other warning signs include:

- High asset value of a client which is not compatible with client’s personal / business information

- Accounts that receive relevant periodical deposits and are dormant at other periods

- Closing of an account followed by opening of new accounts in the same name or by the name of the client’s family member

- Account profile is illogical, if an individual possesses numerous accounts with frequent internal transfers between these accounts

- Closing of an account or group of accounts linked to similar terror group, followed by transfers of all funds into related beneficiary owner, may suggest that a suicide operation is imminent.

Husin said banks should also check if an individual account carries out multiple transactions on the same day at the same branch but with an apparent attempt to use different tellers.

He said some terror supporters deposit or withdraw cash in amounts which fall consistently just below identification or reporting thresholds, but in aggregate are not commensurate with the declared income of the customer. Some even present uncounted funds and then reduce the amount just below a threshold, so as not to trigger reporting or identification requirements.

Moving out of banks

Arabinda Acharya, a manager of the Singapore-based International Center for Political Violence and Terrorism Research, said 50 percent of terrorist financing in Southeast Asia now comes from individual donations including zakat (alms) after governments tightened bank controls.

Acharya said some jihadist groups have moved their funds out from banks and invested them in stocks, gems, real estate, insurance and other financial instruments.

"We learned that Islamic militants in India were speculating in stocks and those in Africa were buying diamonds and other gem stones," he said.

He said al Qaeda-linked Abu Sayyaf Group was forced to go into kidnapping and extortion because the money it was getting from foreign and local donors was not enough to finance bombings. Citing a classified Philippine National Police report, Acharya said the Abu Sayyaf abandoned a plot in 2006 to blow up targets in Manila as well as build a chemical plant in the south because its funds from abroad were drying up.

Chief Superintendent Rodolfo Mendoza said the Abu Sayyaf collected an estimated US$31 million (1.4 billion pesos) from ransom payments and an unspecified amount from extortion between 1992 to 2007.

He added that the group also raised about 20 million pesos ($439,500) from zakat in the southern Philippines alone.

"Zakat has contributed a lot in the continuity of the struggle of the Abu Sayyaf," Mendoza said, adding the rebels had been using the Internet by showing Muslims' struggle in the south to gain more donations from people and groups abroad. With Reuters

Source: abs-cbnNEWS.com

NBI collars ex-bank manager linked to money laundering

Agents of the National Bureau of Investigation (NBI) arrested on Wednesday morning a former bank manager after he was accused of being involved in the supposed money laundering of some R15 million in Navotas.

Head Agent Arnel Dalumpines, chief of the NBI Special Task Force (STF), identified the suspect as Eric Allagadan. He was collared by virtue of an arrest warrant issued by Judge Amelia Fabros of the Pasig Regional Trial Court (RTC) Branch 160 for a case for violation R.A. 9160 or the Anti-Money Laundering Act of 2001.

His arrest came following the request of the Ireneo Enrico San Pedro, the manager and senior paralegal officer of a bank in Pasig City, for the NBI to serve the warrant.

Dalumpines said he dispatched a team to Allagadan’s house at 21 Camia St., Merville Subdivision, Tanza, Navotas and served the warrant at 10:30 a.m. Wednesday.

Based on their investigation, the NBI agents learned that sometime in March 2002, the suspect allegedly allowed the opening of an account by a certain Mario Misa although he provided incomplete information.

Allagadan also allegedly accepted a Global Bank manager’s check worth R15,920,460 which was supposedly payable to the Bureau of Customs (BoC) on March 15, 2002 to be deposited to Misa’s account three days after.

Also, the suspect reportedly allowed several fund transfers from Misa’s account and facilitated the withdrawal of the money on March 20, 2002.

Because of these transactions, the management of the bank filed an administrative case against Allagadan after they found that the latter committed violations of their bank policies and procedures.

Eventually, Allagadan was terminated from his position and the bank pursued the filing of criminal charges against him.

The suspect is now detained at the NBI jail. No bail was recommended.

If found guilty, Allagadan will face a jail term of six months to four years or a fine ranging from R100,000 to R500,000 or both fine and imprisonment. (Jeamma E. Sabate)

http://www.tempo.com.ph/news.php?aid=35940

Nani probed by Swiss government for money laundering

The Philippine Star- Overlooked in the news stories about the extortion case of President Arroyo’s first justice secretary Hernando Perez is the fact that the Swiss government investigated him for alleged money laundering.

Investigated with Perez by Swiss Federal Prosecutor Brent Holtkamp were his wife Rosario, who gave their address as 30 Bonifacio Street, Ayala Heights, Quezon City; his brother-in-law Ramon Antonio Castillo Arceo (no address), and his business associate, banker Ernest de Leon Escaler, of 726 Quirino Avenue, Tambo, Parañaque.

On March 17, 2003, the Swiss prosecutor, through the Swiss embassy in Manila, informed the Philippine government of his initial findings on his investigation of the Perezes, Arceo and Escaler for allegedly violating his country’s Anti-Money Laundering Law by transferring a total of $1.7 million to a bank in Switzerland.

Ironically, the Philippines’ own Anti-Money Laundering Council did not investigate the Perezes and their associates.

Holtkamp’s report, a copy of which was obtained by The STAR, is the document that links Mrs. Arroyo’s first justice secretary to the $2 million that he is accused of extorting from former Manila Rep. Mark Jimenez.

It details the "laundering" and movement of funds with the use of several bank accounts and at least two corporations formed in countries that are known as money havens.

Without the report, the paper and money trail stops with Escaler, in whose account in Coutts Bank in Hong Kong Jimenez transferred the funds from Trade and Commerce Bank in Cayman Islands through Chase Manhattan Bank in New York upon the instruction of Escaler, who, according to Jimenez, fronted for then Secretary Perez. The former Manila congressman made the transfer on Feb. 23, 2001.

The Holtkamp report shows that deposit account 338118 was opened about two weeks later on March 5 in the EFG Private Bank branch in Geneva in the name of Mrs. Perez and Arceo.

Though they were the account holders, the two, however, executed a special power of attorney in favor of then Justice Secretary Perez.

"On March 6, 2001, the account number 338118 did actually receive an amount of US$1 million from the account of Ernest de Leon Escaler at the Coutts (Schweiz) AG Hong Kong," the Swiss prosecutor’s report states.

Later, Mrs. Perez and Arceo opened another account at the EFG Private Bank branch in Guernsey, another city in Switzerland.

Escaler, according to Holtkamp’s investigation, transferred $699,985 to the Guernsey account in May 2001.

"These amounts were then the object of different investments and inter-account movements," the report states.

The Geneva account of Mrs. Perez and Arceo was closed on Oct. 10, 2001.

With its closure, Escaler’s account in the same EFG Private Bank branch, which he opened on March 27, 2001, "received capital in return in several transfers."

"Two important transfers took place from this last account in favor of the company Swordtail Limited, which is the holder of an account with BNP Hong Kong," according to Holtkamp. BNP is a French bank.

"Finally, an amount of US$833,000 from the Swordtail account to the Lucky Clover Enterprises Ltd. account," the prosecutor’s report states.

Lucky Clover was incorporated in the British Virgin Islands. Deposit account 338372 at the EFG Private Bank branch in Geneva was opened for it "at the request" of Escaler on March 11, 2001, six days after Mrs. Perez and Arceo opened theirs in the same branch.

The Swiss prosecutor’s findings did not indicate who the owners of Swordtail and Lucky Clover are.

Since there is a mutual assistance treaty between the Philippines and Switzerland, Holtkamp wanted to know if the authorities had opened a similar investigation of Perez, his wife, Arceo and Escaler. He also asked that he be informed of the results of their investigation and copies of their evidence, if there was any.

He furnished authorities pertinent portions of his country’s Anti-Money Laundering Law. It is not clear if the government complied with his request.

It was former Bulacan Rep. Willie Buyson Villarama who exposed Perez as the "Million Dollar Man" in Mrs. Arroyo’s Cabinet, and it was The STAR that broke the story.

Jimenez later confirmed in a privilege speech at the House of Representatives that Perez extorted $2 million from him.

Escaler’s plea

Escaler asked the Sandiganbayan Friday to suspend the proceedings on the graft case against him even after his and his co-accused’s arraignment has already been set by the anti-graft court.

Escaler filed a manifestation and urgent motion to suspend court proceedings with the first division of the anti-graft court that is handling the graft case, which stemmed from Jimenez’s allegation of extortion.

He asked the division to set a hearing on May 9 for his lawyers to raise arguments as to why hearings on the graft charges should be suspended.

Court officials, however, believed that it would be unlikely for the division to set the hearing on the date requested by Escaler since hearings of the court would be moved to Cebu.

The first division has already summoned Escaler and Arceo and ordered them to submit their plea on graft charges in the arraignment set on May 16.

The clerk of court clarified that the division has not yet set the arraignment of Perez and wife Rosario – contrary to earlier reports – since it has yet to resolve the couple’s motion to suspend proceedings.

Apart from graft charges, the accused are also facing robbery/extortion charges before the second division while Perez is facing separate charges of falsification of public documents and grave misconduct with the third division.

Perez was charged with falsification of public documents for his failure to disclose his and his wife’s $1.7 million bank account in his 2001 Statement of Assets, Liabilities and Networth. – With Edu Punay

http://www.amlosphere.com/europe/aml/nani-probed-by-swiss-government-for-money-laundering.html

Sri Lanka FIU signed MOUs with FIUs of Philippines and Nepal

The Financial Intelligence Unit (FIU) of Sri Lanka recently signed Memoranda of Understanding (MOU) with FIUs of Philippines and Nepal to share financial information to facilitate the investigation and prosecution of persons suspected of money laundering and terrorist financing.

The signing ceremony was held in Brisbane, Australia during the Annual Meeting of the Asia Pacific Group on Money Laundering, said the Central Bank of Sri Lanka in a press release.

FIUs have been established in more than 130 countries as dedicated institutions to facilitate fight against money laundering, terrorist financing and other unlawful activities.

In Sri Lanka the FIU was established in 2006 under the Financial Transactions Reporting Act (FTRA) No.6 of 2006 and now operates in the Central Bank of Sri Lanka.

It also said money launderers and terrorist financiers are most often internationally connected and operate across borders. Financial intelligence and authorities also need to be internationally organized to fight these activities. Therefore, there is a need for FIUs to co-operate with each other and to exchange information.

MOUs will facilitate greater co-operation and co-ordination among FIUs in the exchange of financial intelligence.

The FIU-Sri Lanka has already entered into MOUs with Malaysia, Afghanistan, South Korea and Indonesia. Arrangements are currently being made to sign similar MOUs with other FIUs in the region including India, Bangladesh and Japan.

Source: Isria

UAE to join hands with 82 nations to fight dirty funds

The UAE said yesterday it will sign new anti-money laundering agreements with 82 countries as part of an intensified strategy to combat dirty funds.

The National Anti-Money Laundering Committee (NAMLC) discussed the plans at a meeting that also covered recent cases of currency fraud and other issues.

The Central Bank, which organised the meeting in Dubai, said the committee heard that a memorandum of understanding (MoU) had so far been signed between the anti-money laundering unit and 21 countries.

They were told that the unit planned to sign MoUs with 82 other nations that were members of the Egmont Group, an international gathering of financial intelligence units.

Some of the countries covered by the agreements have large communities in the UAE and financial sources say the agreements will strengthen the drive to crack down on dirty money and ensure the banking system here remains clean.

"These agreements demonstrate the commitment of the UAE to share financial information with its global partners to co-ordinate the efforts against money laundering, terrorist financing and related crimes," a Central Bank spokesman said after some of the deals were signed earlier this year.

"These agreements were aimed at further supporting the UAE's continued co-operation with the international community on subjects of mutual concern and on ways to strengthen co-operation on combating money laundering."

MoUs were signed with the financial intelligence units of Lebanon, Belgium, Brazil, Croatia, Estonia, Isle of Man, Macedonia, Malawi, Monaco, Nigeria, Portugal, the Philippines, Serbia, South Africa and other countries.

The agreements followed a pledge by the UAE last year to push ahead with an extensive campaign against money laundering and terrorist funding through intensified regional and international co-operation.

Source: Emirates Business 24/7

Money Laundering in A Changed World

If you shop with a major bank, chances are that all the transactions in your account are scrutinized by AML (Anti Money Laundering) software. Billions of dollars are being invested in these applications. They are supposed to track suspicious transfers, deposits, and withdrawals based on overall statistical patterns. Bank directors, exposed, under the Patriot Act, to personal liability for money laundering in their establishments, swear by it as a legal shield and the holy grail of the on-going war against financial crime and the finances of terrorism.

Quoted in Wired.com, Neil Katkov of Celent Communications, pegs future investments in compliance-related activities and products by American banks alone at close to $15 billion in the next 3 years (2005-2008). The United State's Treasury Department's Financial Crimes Enforcement Network (finCEN) received c. 15 million reports in each of the years 2003 and 2004.

But this is a drop in the seething ocean of illicit financial transactions, sometimes egged on and abetted even by the very Western governments ostensibly dead set against them.

Israel has always turned a blind eye to the origin of funds deposited by Jews from South Africa to Russia. In Britain it is perfectly legal to hide the true ownership of a company. Underpaid Asian bank clerks on immigrant work permits in the Gulf states rarely require identity documents from the mysterious and well-connected owners of multi-million dollar deposits.

Hawaladars continue plying their paperless and trust-based trade - the transfer of billions of US dollars around the world. American and Swiss banks collaborate with dubious correspondent banks in off shore centres. Multinationals shift money through tax free territories in what is euphemistically known as "tax planning". Internet gambling outfits and casinos serve as fronts for narco-dollars. British Bureaux de Change launder up to 2.6 billion British pounds annually.

The 500 Euro note makes it much easier to smuggle cash out of Europe. A French parliamentary committee accused the City of London of being a money laundering haven in a 400 page report. Intelligence services cover the tracks of covert operations by opening accounts in obscure tax havens, from Cyprus to Nauru. Money laundering, its venues and techniques, are an integral part of the economic fabric of the world. Business as usual?

Not really. In retrospect, as far as money laundering goes, September 11 may be perceived as a watershed as important as the precipitous collapse of communism in 1989. Both events have forever altered the patterns of the global flows of illicit capital.

What is Money Laundering?

Strictly speaking, money laundering is the age-old process of disguising the illegal origin and criminal nature of funds (obtained in sanctions-busting arms sales, smuggling, trafficking in humans, organized crime, drug trafficking, prostitution rings, embezzlement, insider trading, bribery, and computer fraud) by moving them untraceably and investing them in legitimate businesses, securities, or bank deposits. But this narrow definition masks the fact that the bulk of money laundered is the result of tax evasion, tax avoidance, and outright tax fraud, such as the "VAT carousel scheme" in the EU (moving goods among businesses in various jurisdictions to capitalize on differences in VAT rates). Tax-related laundering nets between 10-20 billion US dollars annually from France and Russia alone. The confluence of criminal and tax averse funds in money laundering networks serves to obscure the sources of both.

The Scale of the Problem

According to a 1996 IMF estimate, money laundered annually amounts to 2-5% of world GDP (between 800 billion and 2 trillion US dollars in today's terms). The lower figure is considerably larger than an average European economy, such as Spain's.

The System

It is important to realize that money laundering takes place within the banking system. Big amounts of cash are spread among numerous accounts (sometimes in free economic zones, financial off shore centers, and tax havens), converted to bearer financial instruments (money orders, bonds), or placed with trusts and charities. The money is then transferred to other locations, sometimes as bogus payments for "goods and services" against fake or inflated invoices issued by holding companies owned by lawyers or accountants on behalf of unnamed beneficiaries. The transferred funds are re-assembled in their destination and often "shipped" back to the point of origin under a new identity. The laundered funds are then invested in the legitimate economy. It is a simple procedure - yet an effective one. It results in either no paper trail - or too much of it. The accounts are invariably liquidated and all traces erased.

Why is It a Problem?

Criminal and tax evading funds are idle and non-productive. Their injection, however surreptitiously, into the economy transforms them into a productive (and cheap) source of capital. Why is this negative?

Because it corrupts government officials, banks and their officers, contaminates legal sectors of the economy, crowds out legitimate and foreign capital, makes money supply unpredictable and uncontrollable, and increases cross-border capital movements, thereby enhancing the volatility of exchange rates.

A multilateral, co-ordinated, effort (exchange of information, uniform laws, extra-territorial legal powers) is required to counter the international dimensions of money laundering. Many countries opt in because money laundering has also become a domestic political and economic concern. The United Nations, the Bank for International Settlements, the OECD's FATF (Financial Action Task Force), the EU, the Council of Europe, the Organisation of American States, all published anti-money laundering standards. Regional groupings were formed (or are being established) in the Caribbean, Asia, Europe, southern Africa, western Africa, and Latin America.

Money Laundering in the Wake of the September 11 Attacks

Regulation

The least important trend is the tightening of financial regulations and the establishment or enhancement of compulsory (as opposed to industry or voluntary) regulatory and enforcement agencies.

New legislation in the US which amounts to extending the powers of the CIA domestically and of the DOJ extra-territorially, was rather xenophobically described by a DOJ official, Michael Chertoff, as intended to "make sure the American banking system does not become a haven for foreign corrupt leaders or other kinds of foreign organized criminals."

Privacy and bank secrecy laws have been watered down. Collaboration with off shore "shell" banks has been banned. Business with clients of correspondent banks was curtailed. Banks were effectively transformed into law enforcement agencies, responsible to verify both the identities of their (foreign) clients and the source and origin of their funds. Cash transactions were partly criminalized. And the securities and currency trading industry, insurance companies, and money transfer services are subjected to growing scrutiny as a conduit for "dirty cash".

Still, such legislation is highly ineffective. The American Bankers' Association puts the cost of compliance with the laxer anti-money-laundering laws in force in 1998 at 10 billion US dollars - or more than 10 million US dollars per obtained conviction. Even when the system does work, critical alerts drown in the torrent of reports mandated by the regulations. One bank actually reported a suspicious transaction in the account of one of the September 11 hijackers - only to be ignored.

The Treasury Department established Operation Green Quest, an investigative team charged with monitoring charities, NGO's, credit card fraud, cash smuggling, counterfeiting, and the Hawala networks. This is not without precedent. Previous teams tackled drug money, the biggest money laundering venue ever, BCCI (Bank of Credit and Commerce International), and ... Al Capone. The more veteran, New-York based, El-Dorado anti money laundering Task Force (established in 1992) will lend a hand and share information.

More than 150 countries promised to co-operate with the US in its fight against the financing of terrorism - 81 of which (including the Bahamas, Argentina, Kuwait, Indonesia, Pakistan, Switzerland, and the EU) actually froze assets of suspicious individuals, suspected charities, and dubious firms, or passed new anti money laundering laws and stricter regulations (the Philippines, the UK, Germany).

A EU directive now forces lawyers to disclose incriminating information about their clients' money laundering activities. Pakistan initiated a "loyalty scheme", awarding expatriates who prefer official bank channels to the much maligned (but cheaper and more efficient) Hawala, with extra baggage allowance and special treatment in airports.

The magnitude of this international collaboration is unprecedented. But this burst of solidarity may yet fade. China, for instance, refuses to chime in. As a result, the statement issued by APEC in November 2001 on measures to stem the finances of terrorism was lukewarm at best. And, protestations of close collaboration to the contrary, Saudi Arabia has done nothing to combat money laundering "Islamic charities" (of which it is proud) on its territory.

Still, a universal code is emerging, based on the work of the OECD's FATF (Financial Action Task Force) since 1989 (its famous "40 recommendations") and on the relevant UN conventions. All countries are expected by the West, on pain of possible sanctions, to adopt a uniform legal platform (including reporting on suspicious transactions and freezing assets) and to apply it to all types of financial intermediaries, not only to banks. This is likely to result in...

The Decline of off Shore Financial Centres and Tax Havens

By far the most important outcome of this new-fangled juridical homogeneity is the acceleration of the decline of off shore financial and banking centres and tax havens. The distinction between off-shore and on-shore will vanish. Of the FATF's "name and shame" blacklist of 19 "black holes" (poorly regulated territories, including Israel, Indonesia, and Russia) - 11 have substantially revamped their banking laws and financial regulators.

Coupled with the tightening of US, UK, and EU laws and the wider interpretation of money laundering to include political corruption, bribery, and embezzlement - this would make life a lot more difficult for venal politicians and major tax evaders. The likes of Sani Abacha (late President of Nigeria), Ferdinand Marcos (late President of the Philippines), Vladimiro Montesinos (former, now standing trial, chief of the intelligence services of Peru), or Raul Salinas (the brother of Mexico's President) - would have found it impossible to loot their countries to the same disgraceful extent in today's financial environment. And Osama bin Laden would not have been able to wire funds to US accounts from the Sudanese Al Shamal Bank, the "correspondent" of 33 American banks.

Quo Vadis, Money Laundering?

Crime is resilient and fast adapting to new realities. Organized crime is in the process of establishing an alternative banking system, only tangentially connected to the West's, in the fringes, and by proxy. This is done by purchasing defunct banks or banking licences in territories with lax regulation, cash economies, corrupt politicians, no tax collection, but reasonable infrastructure.

The countries of Eastern Europe - Yugoslavia (Montenegro and Serbia), Macedonia, Ukraine, Moldova, Belarus, Albania, to mention a few - are natural targets. In some cases, organized crime is so all-pervasive and local politicians so corrupt that the distinction between criminal and politician is spurious.

Gradually, money laundering rings move their operations to these new, accommodating territories. The laundered funds are used to purchase assets in intentionally botched privatizations, real estate, existing businesses, and to finance trading operations. The wasteland that is Eastern Europe craves private capital and no questions are asked by investor and recipient alike.

The next frontier is cyberspace. Internet banking, Internet gambling, day trading, foreign exchange cyber transactions, e-cash, e-commerce, fictitious invoicing of the launderer's genuine credit cards - hold the promise of the future. Impossible to track and monitor, ex-territorial, totally digital, amenable to identity theft and fake identities - this is the ideal vehicle for money launderers. This nascent platform is way too small to accommodate the enormous amounts of cash laundered daily - but in ten years time, it may. The problem is likely to be exacerbated by the introduction of smart cards, electronic purses, and payment-enabled mobile phones.

In its "Report on Money Laundering Typologies" (February 2001) the FATF was able to document concrete and suspected abuses of online banking, Internet casinos, and web-based financial services. It is difficult to identify a customer and to get to know it in cyberspace, was the alarming conclusion. It is equally complicated to establish jurisdiction.

Many capable professionals - stockbrokers, lawyers, accountants, traders, insurance brokers, real estate agents, sellers of high value items such as gold, diamonds, and art - are employed or co-opted by money laundering operations. Money launderers are likely to make increased use of global, around the clock, trading in foreign currencies and derivatives. These provide instantaneous transfer of funds and no audit trail.

The underlying securities involved are susceptible to market manipulation and fraud. Complex insurance policies (with the "wrong" beneficiaries), and the securitization of receivables, leasing contracts, mortgages, and low grade bonds are already used in money laundering schemes. In general, money laundering goes well with risk arbitraging financial instruments.

Trust-based, globe-spanning, money transfer systems based on authentication codes and generations of commercial relationships cemented in honour and blood - are another wave of the future. The Hawala and Chinese networks in Asia, the Black Market Peso Exchange (BMPE) in Latin America, other evolving courier systems in Eastern Europe (mainly in Russia, Ukraine, and Albania) and in Western Europe (mainly in France and Spain).

In conjunction with encrypted e-mail and web anonymizers, these networks are virtually impenetrable. As emigration increases, diasporas established, and transport and telecommunications become ubiquitous, "ethnic banking" along the tradition of the Lombards and the Jews in medieval Europe may become the the preferred venue of money laundering. September 11 may have retarded world civilization in more than one way.

http://www.theconservativevoice.com/article/22965.html

AML group to monitor poll expenses of bets

AMID reports that jueteng and illegal drug money are allegedly being used to finance the candidacies of several politicians in the coming elections, the Commission on Elections (Comelec) on Wednesday granted the petition of the Anti-Money Laundering Council (AMLC) for authority to monitor all expenses incurred by those running for local and congressional posts.

With the accreditation of the AMLC, Comelec Chairman Benjamin Abalos Sr. said "this should serve as a warning (for the candidates) to be very, very careful."

Abalos said the council wants to verify reports that gambling and drug money are being are being used or will be used by some candidates for their campaign,

He said if the AMLC finds evidence of politicians utilizing drug and gambling money, it will be used as a ground for their disqualification.

"If they could trace that these are illegally-sourced funds, they (council) can file (a complaint) before us," added Abalos.

The bill creating the AMLC was signed into law by President Gloria Macapagal-Arroyo in September 2001 but it was only implemented in 2003.

Persons found violating the Anti-Money Laundering Act will suffer imprisonment of seven to 14 years and will be fined P3 million but not more than twice the value of the monetary instrument or property involved in the offense.

http://www.sunstar.com.ph/static/man/2007/02/08/news/anti.money.laundering.group.to.monitor.poll.expenses.of.bets.html

Strategist calls for counter-terrorism institute to be set up

Correspondents Report - Sunday, 4 February , 2007
Reporter: Graeme Dobell

ELIZABETH JACKSON: One of Australia's leading strategic thinkers has called for the creation of a national institute for counter-terrorism to confront the generational threat from jihadists.

Dr Anthony Bergin, of the Australian Strategic Policy Institute, says too much of the research coming from academics regards Australia as the problem, not Islamic militants.

Dr Bergin says Australia needs a new national institute as a focal point for research and innovation to deal with terrorism.

His policy paper says al-Qaeda has proved an adaptable and resilient opponent, which has rebounded from the loss of Afghanistan to become a trans-national movement reaching deep into Asia.

Dr Bergin is speaking to Graeme Dobell.

ANTHONY BERGIN: There's been no doubt that we've had many successes against terrorists since 9/11. We've certainly captured or killed many of the leaders. We've disrupted much of their logistics chain and certainly made inroads into terrorists' financing.

But I think my point is that al-Qaeda have proved a very adaptable opponent. They have become much more flatter, much more cellular-like in their structure, much more adaptable and they've really mutated into groups and made linkages with local groups in a way that we didn't see before 9/11.

GRAEME DOBELL: How does that mutation argument hold when you look at Asia, when you look at Jemaah Islamiyah in Indonesia and say, the Abu Sayyaf in the Philippines?

ANTHONY BERGIN: Well there's no doubt that many of the groups in, terrorist groups in Asia do have local roots, but I think there's also plenty of evidence that they also have links, whether it be financial, whether it be ideological, whether it be in terms of people movement, to al-Qaeda.

And so the, the argument that I'm mounting is that al-Qaeda have become a lot smarter. We face a thinking enemy and the leakages are growing.

GRAEME DOBELL: You point to the Muslim separatist conflict in southern Thailand. How big a danger is there, do you think, that southern Thailand could turn from a nationalist insurgency to some sort of jihadist conflict?

ANTHONY BERGIN: Well I think certainly the Thai authorities face difficult challenges here because, as you say, to date it has been seen essentially as a nationalist struggle, a nationalist problem.

But we're also seeing increasing linkages between Thai insurgents and external forces and I think it's that concern that I have.

GRAEME DOBELL: Where, then, would a national research institute for counter-terrorism fit into this? What would Australia be doing if it set up such an institute?

ANTHONY BERGIN: I think we'd be trying to harness the intellectual resources of analysts, both inside and outside academia, to study a whole range of issue areas relating to terrorism and counter-terrorism.

We'd be looking at the evolution of terrorist groups, we'd be looking at group dynamics, we'd be looking at recruitment and the process of radicalisation, we'd be looking at terrorist financing, we'd be looking at the whole area of homeland security as part of a counter-terrorism strategy.

GRAEME DOBELL: Would setting up an institute for counter-terrorism be an admission that Australia hadn't been thinking broadly enough about terrorism, that Australia had essentially been taking an ad hoc approach to the problem?

ANTHONY BERGIN: Well the Government, the Australian Government since 2002 did include national security incorporating terrorism and counter-terrorism as part of its research priorities for the universities.

But unfortunately, I think both the Government and the Australian public have been let down by much of this research.

GRAEME DOBELL: What's wrong with the research?

ANTHONY BERGIN: For the most part, the central focus of this research is suggesting it's all about us, not them and it's really focused on trying to work out how we're the problem.

My argument is that research from a new institute could focus in a much more direct way on practical, relevant policy advice. And I think too much of the material that's come out of the universities on terrorism in the last five years has been not very helpful, let me put it like that, to those responsible for counter-terrorism practice.

ELIZABETH JACKSON: Dr Anthony Bergin, Director of Research at the Australian Strategic Policy Institute with Graeme Dobell.

http://www.abc.net.au/correspondents/content/2007/s1839554.htm

Philippines: ‘AML policy hurting tourism’

By RAINIER ALLAN RONDA, The Philippine Star

International airlines and travel agencies have urged the Bureau of Customs and the Bangko Sentral ng Pilipinas (BSP) to reconsider its policy of confiscating large amounts of money from passengers of arriving international flights for failing to declare cash they are bringing into the country.

They warned that the implementation of a BSP regulation requiring passengers to declare local and foreign currency exceeding P10,000 or its equivalent in foreign currency may drive moneyed foreign tourists away.

"We should be welcoming these moneyed tourists into our country instead of confiscating their money at the airport just because of non-declaration," an airport insider who requested not to be named, told The STAR.

"They’re such a pity. They come here to our country and then we only take their money upon arriving here at the airport."

The source pointed out that the BSP and BOC should also reconsider the P10,000 ceiling that would require declaration. "If they really want to guard against money laundering, then they should at least increase the P10,000 ceiling."

The source pointed out that many foreign tourists bring large amounts of money when touring a country to anticipate unforeseen spending.

"It would be better if tourists bring in more dollars or yen to raise the tourism industry. Why should they discourage tourists from bringing money with them into our country? In fact, we should encourage to spend their money here."

Last week Customs officials confiscated P900,000 from a Japanese tourist from Nagoya, Japan, upon his arrival at the Ninoy Aquino International Airport because he failed to declare it. Nightclub owner Toshimi Fukuta, 56, was allowed to enter the country, however.

Explaining the incident, Tess Roque, BOC-NAIA deputy collector for passengers’ services, stressed that the BOC-NAIA was strictly implementing a BSP regulation against money laundering as required by the Anti-Money Laundering Law.

http://www.abs-cbnnews.com/storypage.aspx?StoryId=63802

Philippines: Dirty money watch peaks as polls near

By Maricel E. Burgonio, Reporter

The Antimoney Laundering Council (AMLC) said on Monday that it has intensified the watch on dirty money with the expected surge in suspicious transactions before the May elections.

Vicente Aquino, AMLC executive director, said suspicious money could be laundered through bank accounts and end up as campaign funds for unscrupulous politicians.

His remarks came a day after Philippine National Police (PNP) officers in Camp Crame expressed alarm at the sudden slump in antijueteng operations since the start of the year.

The officers, who are preparing a report for anti-illegal gambling legislators, said they feared an increase in the influence of gambling lords.

Other sectors have also warned that narcotics syndicates were also wooing national and local candidates with promises of campaign funds.

Aquino did not connect his statements to the PNP’s concern but said, “we expect an increase of covered transaction reports before forthcoming election.”

“It can be a suspicious account if it be reported exceeding P500,000 or even below that number,” Aquino added.

For 2006, the AMLC’s reported number of suspicious transactions reached 5,642 from banks and nonbanking financial institutions, insurance companies and securities firm, increasing the total figure to 26,019.

The AMLC succeeded in freezing P1.213 billion in suspected accounts as of end-December 2006.

Of this, the AMLC unfroze and returned to investors more than P525 million.

Money laundering are financial crimes that involve the transnational movement of money between jurisdictions. The AMLC was created by the Antimoney Laundering Act (AMLA). It serves as the country’s financial intelligence unit.

The AMLC requires and receives reports on covered or suspicious transaction from covered institutions, including banks and other financial institutions supervised and regulated by Bangko Sentral ng Pilipinas, insurance firms supervised by Insurance Commission, securities dealers and other entities supervised by Securities and Exchange Commission.

Also, it examines or inquires into bank deposits/investments on receipt of court orders.

The country was delisted from the Financial Action Task Force, a global watchdog against money laundering and terrorist financing, following the implementation of the AMLA.

http://www.manilatimes.net/national/2007/jan/23/yehey/top_stories/20070123top1.html

ASEAN Foreign Ministers Prepare Counter-Terrorism Convention

By Douglas Bakshian
Cebu, Philippines
12 January 2007

Southeast Asian foreign ministers have taken a step forward in the war on terrorism, preparing a draft convention that allows security agencies to cooperate more on tracking, finding and prosecuting terrorists. The draft was approved Friday, and leaders of the 10-member Association of Southeast Asian Nations are expected to give their final approval Saturday. Douglas Bakshian reports from the ASEAN summit in the Philippine city of Cebu.

The convention is designed to clamp down on the unregulated movement of arms and militants in the region. The draft says ASEAN's individual national security agencies would have to coordinate their efforts to track, arrest, detain and rehabilitate suspected militants. They would also be required to beef up border controls and suppress terrorist financing.

The convention would make it a legal obligation for the 10 ASEAN countries to work together in these areas.

Rohan Gunaratna, a terrorism specialist at the Singapore Institute of Defense and Strategic Studies, says this is a step in the right direction in the war on terror.

"It will have a significant impact because today the specialist counter-terrorism capabilities of individual governments are quite good, but there is limited cooperation, coordination and collaboration between the governments," he said. "If there is greater understanding and agreement … then certainly the national security agencies … will cooperate much better to fight terrorism and extremism more effectively."

Gunaratna says terrorist and extremist groups in the region are cooperating and collaborating with each other, so the authorities must work together in a similar manner to counter the threat. He says terrorists are constantly moving among the Philippines, Indonesia and Malaysia, nations with many large and small islands that make the borders difficult to police.

Summit spokesman Victoriano says the convention would bring ASEAN into line with internationally accepted definitions of terrorism.

"The ASEAN countries will adopt the definitions of what constitute terror-related crimes spelled out in various U.N. conventions, which could be against aircraft, airports, seacraft, maritime structures and the like," he said.

Terrorism is a persistent problem in the region. Just days ago, the southern Philippines was rocked by several bombings that killed at least six people and wounded dozens. Authorities suspect the bombings were the work of a local militant who is working with the regional Islamic terrorist group, Jemaah Islamiyah.

Jemaah Islamiyah is accused of being behind bombings on the Indonesian island of Bali in 2002 and 2005 that together killed 225 people. The group is also accused of several other fatal bombings over the past several years in Jakarta, and in the Philippines.

There has also been terrorist activity in recent years in Malaysia, Singapore and Thailand.

http://www.voanews.com/english/2007-01-12-voa70.cfm

ASEAN leaders agree to put teeth into group

By Bill Tarrant

CEBU, Philippines (Reuters) - Leaders of the Association of Southeast Asian Nations adopted on Friday bold proposals that could turn a group often derided as a talk shop to a rules-based bloc with bite.

The 10 leaders, whose members range from an absolute monarchy and military juntas to parliamentary democracies and one-party communist states, have agreed to start drafting a charter that would give ASEAN a legal basis for the first time since it was founded at the height of the Vietnam war nearly 40 years ago.

At a news conference to announce the decision, an ASEAN "Eminent Persons Group" said they studied the European Union as a reference, but that ASEAN would not become another Brussels.

"Since visiting the EU, I've become more conservative with ASEAN, because we learned that the EU is not that good an organisation that can be transferred to ASEAN," said former Malaysian deputy premier Musa Hitam.

The group will still take decisions by consensus for sensitive issues, but will conduct voting over non-controversial issues, according to a summary of the proposals.

The most ground-breaking proposal gives ASEAN the power to suspend, or in extreme cases, expel members for serious breaches of the charter.

Panel chairman and former Philippines president Fidel Ramos said an ASEAN charter will allow the group to compete as a bloc in the "new order" of the 21st century.

"We must reposition ourselves to be more competitive in a globalised economy and the new order of the 21st century."

CARING AND SHARING

The ASEAN leaders arrived in the central Philippines city of Cebu for a summit -- rescheduled from last month amid typhoon and terrorist warnings -- that aims to create a "caring and sharing" community in the region.

Men in traditional island gear stood atop a new convention centre in Cebu blowing conch horns. Women in flowing green gowns danced and twirled red umbrellas on the ground as presidents, prime ministers, a king and former generals pulled up in limousines.

Searchlights raked the night, filled with the sounds of beating drums and shrieking whistles in a cacophonous Filipino welcome.

A sudden downpour did little to dampen spirits for the biggest event in Cebu since Ferdinand Magellan ended his circumnavigation of the globe here in 1521, slain by a chieftain unhappy that his land was being claimed in the name of Spain.

The Philippines was on high alert after three bombings on Wednesday night, hundreds of miles to the south of the venue, killed eight people and wounded dozens.

Officials suspected Islamic militants and said the blasts were designed to embarrass the Philippines ahead of the ASEAN meetings and a broader East Asia summit next week. More than 13,000 police and troops have been deployed in and around Cebu.

The series of ASEAN meetings began with foreign ministers rebuking Myanmar on Thursday for dragging its feet on democratic reforms it has promised ASEAN it would take.

The new charter proposals could theoretically put Myanmar's membership in jeopardy if the junta continued to be recalcitrant.

The grouping, with a population the size of Europe's, plans to bring forward the establishment of an economic community from 2020 to 2015, according to a draft declaration.

ASEAN leaders will also discuss poverty alleviation in countries that have some of the globe's smallest per capita incomes, and disaster prevention in a region that has seen a devastating tsunami, earthquakes, volcanic eruptions, floods, forest fires and pandemics over the last couple of years.

Southeast Asian leaders will also sign a counter-terrorism agreement that will clamp down on the movement of arms and fighters between its remote islands through information exchange, border controls and a crackdown on terrorist financing.

ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

(Additional reporting by Carmel Crimmins, Manny Mogato, Chris Buckley, and Rosemarie Francisco)

© Reuters 2007. All Rights Reserved.

http://in.today.reuters.com/news/newsArticle.aspx?type=worldNews&storyID=2007-01-12T193955Z_01_NOOTR_RTRJONC_0_India-283347-1.xml

Terror groups to use crime to raise funds

By Inday Espina-Varona, Executive Editor

First of 3 parts

Philippine terrorist groups will increasingly use crime to fund operations as a government crackdown on dirty money chokes off normal cash flow routes, according to senior military intelligence sources.

But creativity on the terror front is also progressively matched with ingenuity as government sleuths find ways to go around the absence of an antiterror law and the limitations of antimoney laundering legislation.

An official of the Intelligence Service of the Armed Forces of the Philippines (Isafp) told The Manila Times that units scouring financial systems for possible fund movements by terrorists and their allies found more than 7,000 “suspicious transactions” in 2006.

The figure was more than triple the 2,000 suspicious transactions reported in 2005, the officer said.

Only a fraction of these cases have been subject to seizure applications. But the Isafp officer said the information allowed military and police intelligence groups to track the flow of logistics into the frontlines of insurgent groups, leading to some “preemptive strikes.”

This strategy will continue in 2007 until 2010, the timetable set by President Arroyo to eliminate the national communist underground movement and secessionist groups in Mindanao.

Funding sources

AFP officers from different service units spoke with The Manila Times in a series of interviews on the growth of Islamic extremist groups and developments on the communist insurgency. They requested anonymity because there was no clearance for the interviews.

The Isafp officer said the fund movements under review are worth “several hundreds of millions of pesos.”

“I cannot give you the exact value but we are talking here of drug money and illegal arms shipment,” the officer added.

The Times also learned that US intelligence units coordinate closely with Philippine counterparts, concentrating on linkages between crime and terrorism.

Among the cases quietly discussed was a counterfeit cigarette-manufacturing outfit suspected of being a conduit for funds to and from North Korea, officials said.

The sources would not reveal who the Philippine beneficiaries are but said a brother of a Hong Kong crime lord managed operations here until the middle of last year.

Intelligence sharing eventually led to the confiscation of some equipment in Taiwan and further probes into the North Korean financial network.

Last month, a wire reports said a Macau bank accused by Washington of aiding the laundering of illicit North Korean cash had handled tens and possibly hundreds of millions of dollars for Pyongyang last year.

Myanmar, which is ruled by a military junta, is also eyed by Philippine authorities as a major transshipments point of drugs and arms as is Thailand, which faces a serious insurgency in its southern provinces.

Legal limits

Smuggling and the manufacture of counterfeit products are the choice operations of terrorists these days, an Air Force official with intelligence tasks, said.

“Remember narco-politics? Terrorists are now using the same template,” the official said.

“Terrorists no longer use legitimate organizations as fronts because we are able to track them,” the source added.

“What they do now is use middlemen who will do the transactions on their behalf,” he explained. “These middlemen do not know about the terrorist activities.”

As the military and police forces learn to work closely with government judicial bodies, they have stepped up financial attacks on suspected terrorist networks.

In December 2006, Philippine cops scored a major victory when the Court of Appeals froze bank accounts of the Saudi-based International Islamic Relief Organization (IIRO).

Leaders of the organization, which is well known for its charities in impoverished and strife-torn Muslim provinces, have denied charges—dating back to the 1980s—that it provides fund to terror groups.

What was curious about the petition filed with the CA, was that it was based on a US press release alleging the IIRO’s Philippine branch served as a liaison for groups allied with Osama bin Laden’s al-Qaeda network, including the Jemaah Islamiah and the homegrown Abu Sayyaf.

The use of a press release to represent the voluminous data in the Philippine National Police intelligence archives brought laughter among veteran terrorist hunters. But it also underscored a major problem faced by Philippine authorities. The absence of an antiterror law, they say, means sleuths often have to skirt around legal limits.

Those constraints have not stopped authorities from unearthing information on terrorist groups. But the data, while crucial to the prevention of terror attacks, is often unusable in the prosecution of terror suspects.
To be continued

http://www.manilatimes.net/national/2007/jan/07/yehey/top_stories/20070107top2.html

CA freezes shabu market operator's bank accounts

Friday, December 29 2006

National
The Court of Appeals (CA) on Friday put on "freeze order" the bank accounts of arrested shabu market operator Amin Imam Boratong and his wife Shieryl Molera.

In a four-page resolution of the CA Special Second Division, it approved the petition of the Anti-Money Laundering Council (AMLC) seeking a "freeze order" on the five bank accounts of Boratong at the Equitable PCI Bank and Planters Development Bank in the account name of Godofredo Medenilla.

Medenilla is the bank manager of PCI Bank Dr. Sixto Avenue, Kapasigan Branch located in Pasig City.

Medenilla was earlier identified as Jeffrey Medina and later turned out to be Godofredo, who is a bank manager of Equitable PCI Bank.

It was gathered that Medenilla was receiving the amount of P50,000 a month from Boratong.

The resolution penned by Associate Justice Ricardo Rosario said the "freeze order" will take effect in 20 days beginning today.

Initial investigation of the AMLC revealed that the bank accounts of Medenilla in the said two banks may possibly be the depository banks of the proceeds of the illegal drug trafficking activities of the Boratong couple and their cohorts.

According to the CA, there was sufficient probable cause to believe that the said bank accounts of Medenilla are connected in the illegal activities of the Boratong group.

Aside from the said two bank accounts, other deposits and investments of Boratong and Medenilla were also freezed in connection with the undergoing investigation. (PNA)


http://news.balita.ph/html/article.php/20061229203302263

Recently Freezed IIRO Funds in Philippines

14 December 2006

The recent freezing of the Saudi-based International Islamic Relief Organization’s bank account in the Philippines by the order of a court on the request of the Philippine Anti-Money Laundering Council will do much harm to the thousands of Filipinos in Mindanao who benefit from the IIRO’s charitable work. The organization operates an orphanage in Mindanao, gives educational scholarships to hundreds of Filipino Muslims, has helped young Filipinos get married and has paid for the construction of scores of mosques there. Every year the IIRO provides at least 300 scholarships to local students, paying for them to study in Manila, Cebu and Cagayan de Oro. Not only does it pay their tuition but it also pays for their transportation from their hometowns to their points of study and in addition gives them a monthly stipend to pay for food and accommodation. “Many students are going to howl if their scholarships are stopped,” said a former Filipino scholarship holder to Arab News in an interview.

The IIRO’s secretary-general, Adnan Khalil Basha, has vigorously denied allegations that any of its funds have gone to help terrorist groups in the Philippines. He claims the freezing of the account is part of a concerted effort by some in the West to stop all Islamic relief efforts. And he may be right. In the aftermath of the Al-Qaeda Sept. 11, 2001 attacks on New York and the Pentagon, the United States has insisted that nations around the globe implement strict monitoring of all international money transfers.

In order to dispel any suspicions about how it uses its funds, the IIRO has strict internal policies that allow it to deposit money abroad only into accredited bank accounts that it maintains in countries where it operates. Not only that, but it employs a strict accounting procedure in which monthly financial reports document and track how the money was spent and who received it.

It is surely unfair for the Anti-Money Laundering Council to freeze the IIRO account merely because of American suspicions. It is perhaps telling that the freeze order issued is for 28 days only — which perhaps indicates that Manila is not convinced of the US accusation that the IIRO is using its funds to support the terrorist Abu Sayyaf Group and Jemaah Islamiyah.

The Philippine government should present any hard evidence that it has against the IIRO, or else unfreeze their account. The Philippines is not a banana republic and, as such, should show the world that it is not at the beck and call of the United States. Manila has many strategic interests in the Middle East and Saudi Arabia, not least of all nearly one million OFWs working in the Kingdom. They make real contributions to the country’s economy and this could be damaged if the IIRO is continually accused of something it is not guilty of. The account should be unfrozen immediately as a show of good will. The millions of riyals that the IIRO has spent in the Philippines have benefited Filipinos and no one else. It would be a shame to see that aid squandered just because of some misplaced and probably groundless suspicion originating in Washington.

http://www.arabnews.com/?page=7§ion=0&article=90000&d=14&m=12&y=2006