E.g., 10/22/2018
E.g., 10/22/2018

MoU focuses on combating terrorism, cybercrimes, money laundering 

Manama: Bahrain and the US have signed an agreement to strengthen cooperation in combating transnational crimes.

 Ambassador to the US Shaikh Abdullah Bin Rashid Al Khalifa and New York City Police Commissioner James O’Neill signed the memorandum of understanding that includes the development of cooperation in the field of crime prevention in general, and international terrorism in particular.

The accord covers countering all forms of supporting, funding and inciting terrorism, combating trafficking in persons, illicit trafficking in drugs, narcotic drugs and psychotropic substances as well as maritime fraud. The MoU also covers cyber and economic crimes, in addition to money laundering crimes.

In a statement, Shaikh Abdullah stressed the importance of strengthening cooperation between the two countries in all fields, achieving the greatest cooperation in the security fields and contributing to combating crimes in all their forms.

The ambassador explained that the signing of the MoU contributed to enhancing coordination in addressing threats to security.

In a report released in July, the State Department said that Bahrain “plays a key role in regional security architecture and is a vital US partner in defence initiatives.”

Bahrain hosts the US Navy’s Fifth Fleet and participates in US-led military coalitions, including the Global Coalition to Defeat Daesh. “Bahrain was the first Arab state to lead a Coalition Task Force patrolling the Gulf and has supported the coalition counter-piracy mission with a deployment of its flagship. The US designated Bahrain a Major Non-Nato Ally in 2002,” the report said.

Close bilateral relations boost Bahrain’s maritime defences against smuggling and terrorism and improve its ability to “deny terrorist sponsorship, support, and sanctuary in a manner that respects the human rights of its residents.”



The Australian Transaction Reports and Analysis Centre (AUSTRAC) has entered a Memorandum of Understanding (MoU) with its counterpart in the United States, the Financial Crimes Enforcement Network (FinCEN).

The MoU is aimed at strengthening the alliance between the two organisations in the fight against serious financial crime and terrorism financing.

Chief Executive of AUSTRAC, Nicole Rose said the agreement would enable both countries to share regulatory and compliance information to strengthen the international financial system and harden industry against transnational crime.

“AUSTRAC’s comprehensive network of international counterparts is critical in the fight against money laundering and terrorism financing,” Ms Rose said.

“We recognise that financial crime is a global issue and organised crime syndicates are using increasingly sophisticated techniques and methodologies to exploit the global financial system,” she said.

“Because of this, we need to work together with our international partners to tackle this issue.”

In addition to the MoU with the United States, AUSTRAC signed agreements with the financial intelligence units of Saudi Arabia and Seychelles.

“The establishment of regular exchanges following the signing of these MoUs will foster greater understanding and information sharing between our Agencies,” Ms Rose said.

“The new MoUs will add to  AUSTRAC’s existing 90 MoUs which permit the exchange of financial intelligence with international counterparts, and the three regulatory MoUs to facilitate the exchange of regulatory and compliance information,” she said.



ISLAMABAD - In order to sensitise its regulated sectors such as the capital market, insurance, and modaraba about regulatory framework on anti-money laundering and countering financing of terrorism (AML/CFT), the SECP organized a two-day awareness session in Karachi.

The session was aimed at developing understanding of AML/CFT obligations and establishing an effective AML/CFT risk assessment and compliance framework and in particular, in detecting and reporting suspicious activities, according to a press statement issued here.

It may be added that the SECP notified the Anti-Money Laundering and Countering Financing of Terrorism Regulations, 2018, in June and issued supplementary guidelines in September to help regulated persons understand requirements of the legislation in applying national AML/CFT measures.

Khalida Habib, executive director, SECP, apprised the participants about the financial institutions’ obligations under AML/CFT regime. She highlighted the regulatory measures for the regulated persons to safeguard them from being used by money launderers and terrorist financiers. She also emphasized the requirement of risk assessment, internal policies, procedures and controls, customer due diligence measures, record keeping procedures and UNSCR compliance.

Furthermore, the outcomes of the National Risk Assessment and FATF monitoring process were also shared with the participants. Representatives from the Financial Monitoring Unit (FMU) explained the red flag indictors and unusual transactions relevant to each sector also answered enquiries related to subsequent reporting of STR/CTR to the FMU.

A large number of participants from the regulated sector as well as self-regulatory bodies and associations such as the Pakistan Stock Exchange, Central Depository Company, National Clearing Company of Pakistan Limited, Pakistan Mercantile Exchange, Mutual Funds Association of Pakistan, NBFI and Modaraba Association of Pakistan and Insurance Association of Pakistan attended the session. It was an interactive session and various issues relating to the implementation of the risk-based approach were discussed. The SECP also solicited the feedback from the participants in respect of the AML/CFT framework.

The session was first in a series of awareness/training session as part of the outreach program to enhance understanding on the money laundering/terrorist financing risks and obligations there under.



Doha - The College of Law at Qatar University (QU) has entered into an agreement with the Boston University (BU) School of Law to develop a Counter-Terrorist Financing Training Programme.
Qatar’s ambassador to the US Sheikh Meshal bin Hamad al-Thani, QU College of Law dean Dr Mohamed Abdulaziz al-Khulafi, BU provost Dr Jean Morrison, and BU Law’s dean Angela Onwuachi-Willig were the signatories.
The intensive one-week course is designed to enhance the capacity of Qatar’s legal professionals and government officials to combat the global threat of terrorism financing.
Speaking at a ceremony in the US, Sheikh Meshal said: “Qatar is a leader in regional and global efforts to counter terror financing and defeat extremism.”
“We look forward to enhancing the capabilities of our professionals through this unique training programme,” the ambassador added. “Qatar has partnerships with leading American universities and we are pleased to now include Boston University School of Law among these partners.”
QU president Dr Hassan al-Derham said: “In our world today, it is vital to raise awareness about the issues of financing terrorism, which is one of the biggest threats facing the international community, and threatens global peace and security.”
“This is why Qatar University, through the College of Law, focuses on raising legal awareness among its students and the community on issues of financial crime, including countering terrorism financing and money laundering,” he added. “We are pleased to collaborate with Boston University through this programme that am sure will prepare a distinguished generation of Qatari law experts capable of serving the country in various legal fields.”
BU Law’s dean Onwuachi-Willig said: “The laundering of illicit funds to finance terrorism poses one of the gravest threats to national security, and a partnership with Qatar University’s College of Law to develop a customised training programme gives us a unique opportunity to support the country’s efforts to fight terrorist financing.”
The counter-terrorism financing course will address the training needs of Qatar’s public prosecutors, ministries’ officials, and financial services professionals charged with detecting and disrupting illicit financing schemes.
BU faculty members with expertise in national security, anti-money laundering, Fintech (computer programs and other technology that are used to support or enable banking and financial services), cyber-security, and financial regulation will work with QU College of Law’s faculty to develop simulations and case studies based on real-world threats.
“We share with Qatar a commitment to defeating terrorist activities funded through the exploitation of financial technology,” said Onwuachi-Willig, adding: “We are excited about establishing this unique partnership with the Qatar University College of Law.
“There is so much to be done to secure our nations, and I see this course as an important first step in a developing a collaborative model that can make a major difference in the global fight against terrorist financing.”
Anticipated instructors include faculty from the BU School of Law’s Graduate Programme in Banking and Financial Law with expertise in fighting financial cyber-crime, as well as experts affiliated with the University’s Harari Institute for Computing, the Frederick S Pardee School of Global Studies, and the Cyber Security, Law, and Society Alliance.
In addition to BU Law instructors, the programme plans to feature experts from the US Department of Treasury, the US Department of State, and the US Federal Bureau of Investigation (FBI) who will share best practices in building and prosecuting counter-terrorist financing legal cases.
The initial programme will take place in Boston in late fall or early spring, with additional programmes slated for spring and summer 2019.



Hong Kong _ The Securities and Futures Commission (SFC) today released consultation conclusions on proposals to amend its Guideline on Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT Guideline) (Note 1).

The amendments are in line with the latest international anti-money laundering and counter-financing of terrorism (AML/CFT) standards and will make the AML/CFT Guideline more useful and relevant in light of industry developments (Note 2).

Under the revised AML/CFT Guideline, the categories of politically exposed persons (PEPs) will be expanded to include international organisation PEPs who are persons entrusted with a prominent function by an international organisation. The enhanced scrutiny for foreign PEPs will be extended to domestic PEPs and international organisation PEPs where their business relationships with a firm are assessed to be of high risk. In addition, the changes allow firms the flexibility to adopt reasonable risk-based measures to verify customer identification information. To facilitate non-face-to-face customer onboarding, firms are allowed to take a mix of supplementary measures (Note 3) to guard against impersonation risk.

"The amendments ensure our regulations are in line with the latest international standards," said Mr Ashley Alder, the SFC’s Chief Executive Officer. "Whilst firms will still be required to apply effective measures to detect and prevent money laundering and terrorist financing, the changes provide more flexibility for firms to apply those measures using a risk-based approach."

The revised AML/CFT guidelines (Note 4) will be gazetted on 19 October 2018 and take effect on 1 November 2018.


  1. On 5 July 2018, the SFC issued a Consultation Paper on Proposed Amendments to the (1) Guideline on Anti-Money Laundering and Counter-Terrorist Financing and (2) Prevention of Money Laundering and Terrorist Financing Guideline issued by the Securities and Futures Commission for Associated Entities. The consultation period ended on 9 August 2018. 19 written submissions were received from various respondents including industry associations, a professional body, brokers and asset management companies. Consultation feedback generally supported the proposals. In response to the comments received, the SFC modified some proposed amendments to better reflect our regulatory intent or give additional guidance.
  2. The AML/CFT guidelines will be renamed as the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations) to better align with the terminology used throughout the AML/CFT Guideline and the Financial Action Task Force standards.
  3. These supplementary measures include using appropriate technology, checking against reliable databases or registries, or obtaining certified copy identification documents.
  4. This refers to the revised AML/CFT Guideline and the revised Prevention of Money Laundering and Terrorist Financing Guideline issued by the Securities and Futures Commission for Associated Entities.





Counter ISIS Finance Group Leaders Issue Joint Statement


September 24, 2018

WARSAW, POLAND – On September 20-21, the Counter ISIS Finance Group (CIFG) convened its 52 member states and observers in Warsaw, Poland to discuss the ongoing global efforts to counter ISIS financing.  

The CIFG was established in January 2015 as one of five working groups within the Global Coalition to Defeat ISIS, a broad international group formed to degrade and ultimately defeat ISIS.  This was the tenth meeting of this group co-chaired by the United States, Italy, and Saudi Arabia.

Below is a joint statement that can be attributed to leaders of the Counter ISIS Finance Group:

“The Global Coalition has made significant progress in the fight against ISIS.  

ISIS’s so-called caliphate has collapsed.  The terrorist group has lost nearly all of the territory it once controlled in Iraq and Syria.  But, ISIS is now attempting to hide in the shadows, in Iraq and Syria, with branches, affiliates, and cells around the world.  

Accordingly, the work of the CIFG remains more important than ever, and the member nations committed today to intensify their efforts.”

“The finance working group is used by member countries to identify and disrupt ISIS’s ability to generate revenue and access financial systems.  

On the first day of the meeting, CIFG members shared information to continue building a common understanding of the evolving threat posed by ISIS.  

Members discussed specific successes in identifying terrorist financiers and bringing them to justice.  They also shared specific information on funding mechanisms utilized in South and Southeast Asia, as well as in Europe.  Ideas on best practices to address emerging trends were shared.  

The working group also discussed how to mitigate risks from ISIS’s potential exploitation of stabilization and reconstruction funding into Iraq and other affected countries.  

Members acknowledged the importance of preventing the trade in archeological property illegally removed by ISIS from Iraq and Syria and the value of recovery and reconstruction of cultural heritage in the stabilization process.  

On the second day of the meeting, delegates discussed the best ways to combat kidnapping for ransom, and how to effectively communicate the Coalition’s continued success against ISIS financiers.”

“Even as ISIS desperately seeks new sources of funding, it is adapting its techniques.  Our Coalition must adapt as well.  The CIFG’s tenth meeting added new member countries to the Coalition, enhanced collaboration among like-minded countries and multilateral organizations, and reinforced the fact that the CIFG continues to play an essential role in the Global Coalition’s broader fight to defeat ISIS.”




Swedish Watchdog Rings Alarm Over 'Sharia Banks' After Reported Daesh Transfer


The informal banking system, which has roots in middle-age Islamic beliefs, is notoriously hard to supervise, which makes the exact extent of terrorism financing almost impossible to calculate, a senior Swedish terrorism researcher noted.

So-called hawala banks were used to finance notorious Swedish-born Islamist and Daesh* terrorist Michael Skråmo, who in 2014 took his wife and four children to Syria and joined the outlawed Islamist group, Swedish terrorism watchdog Doku reported, noting that terrorist networks in other parts of the world may be financed using the same or similar channels.

According to a receipt obtained by Doku, a 24-year-old man from Gothenburg sent money to Daesh figure Waleed Ahmed Zein who was described by the US Treasury as a "dangerous terrorist" and arrested earlier this year. 

At present, Waleed Ahmed Zein is being prosecuted for having transferred over $150,000 to Daesh in Syria, Libya and Africa. According to Doku, the roughly $895 sent to Zein was intended for Skråmo. The transfer occurred via Dahabshiil, a corporate chain with offices in more than 120 countries.

Magnus Ranstorp, a senior terrorism researcher at the National Defense College, confirmed that using hawala for terror financing was "not uncommon." He confirmed instances of contacts sending money directly to Daesh via the hawala system. The exact amount of money transferred is difficult to track down, due to lack of control, he pointed out.

Although the sums sent on individual occasions may seem quite small and insignificant, the total amount may be quite impressive, Ranstorp said. 

"There is actually a ton of money in these milieus. This reveals shortcomings in our supervisory bodies. Just hawala is one of the hardest activities to supervise, because it's so informal," Ranstorp said, citing the lack of control mechanisms" 

Poor traceability is the foremost problem, according to Ranstorp, who added that a crackdown on hawala would be unthinkable, due to the fact that it is often used for humanitarian reasons. Many foreign diasporas in Sweden, such as the Somalis, are heavily dependent on it. Nevertheless, hawala banks have been banned in some US states based on suspicions that the 9/11 attacks in 2001 were financed using hawala.

Earlier this year, the Swedish government appointed a joint group of specialists representing various authorities and tasked with examining the activities and evaluating the scope of hawala banks. Sweden's Financial Supervisory Authority has already reported that these banks often appear in connection with criminal charges related to terrorism and other crimes.

The origins of the hawala banks can be traced as far back as the eighth century. The system is based on Islamic beliefs and Sharia laws and operates on the merit of honor and trust. Hawala is an informal system of money transfer based on trust and the expectation that debt is subsequently regulated. Most often, no proper verification is provided. 

This type of banking is mostly used in countries with poorly-developed financial institutions, where ordinary banks are struggling to conduct business, mainly in the Middle East and North Africa.



Latvian government adopts anti-money laundering plan


RIGA (Xinhua) -- The Latvian government on Tuesday adopted a plan to combat money laundering and terrorist financing after its performance received a critical assessment of the Council of Europe's anti-money laundering experts.

The plan aims to increase supervision of banks and other financial service companies, implement preventive measures and unify anti-money laundering guidelines.

According to the plan, exchange of information between supervising and investigating authorities will be improved, and their human resources will be increased as well as new information technology solutions will be implemented.

Moneyval, the Council of Europe's Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, presented a very critical report on Latvia last month.

According to the Moneyval report, both Latvian policymakers and entrepreneurs have insufficient understanding of money laundering and terrorist financing risks, and the Baltic countries' law enforcement authorities have not been doing enough to crack down on these crimes.

For that reason, Moneyval has put Latvia in an enhanced follow-up process.




New bill helps Sweden fight money laundering, terrorist financing


STOCKHOLM, Sept. 4 (Xinhua) -- The Swedish government proposed on Tuesday a new bill that helps the country to counter money laundering and terrorist financing.

The bill will improve law enforcement authorities' access to information of financial companies, their account events and transactions.

"The best way to tackle financial crime is to cut off the cash flow," Swedish Minister for Financial Markets and Consumer Affairs Per Bolund said in an official statement.

Already now the financial companies have been required to provide financial information. The aim of the proposed bill is to specify in the law that the information should be disclosed without delay and in electronic form.

"The proposal is one in the series on measures that the government takes to counter abuse of our financial system," Bolund said.

According to an international evaluation made by the International Financial Action Task Force (FATF), Sweden has one of the best systems in the world to fight financial crimes.

"I am pleased that Sweden is among the few countries that have passed FATF's strict evaluation. Yet we cannot lean back but have to continue our work," the minister said.

The bill is proposed to be put into operation on Sept. 1, 2019.





AUSTRAC warns about new money laundering threats


Superannuation, stored value travel cards and cryptocurrencies are increasingly being used for money laundering by sophisticated criminals, Australia's financial intelligence agency has warned.

Brad Brown, deputy chief executive of the Australian Transactions Reports and Analysis Centre (AUSTRAC), said money launderers and criminal groups financing terror were exploiting new technology to move illicit money around the world.

Mr. Brown told the ABC's AM program that financial services were vulnerable, with both retail and industry superannuation funds potential targets of money launderers constantly seeking loopholes to exploit.

"In Australia's superannuation sector we found there is a medium risk of money being laundered," Mr Brown said.

"There are different risks across every finance services sector that AUSTRAC regulates.

The increasing global focus on money laundering and terror financing comes as AUSTRAC hosts a summit of The Egmont Group, a multinational group comprising 350 financial intelligence experts from 150 financial intelligence units meeting in Sydney.

"There's an enormous amount of money flowing around the world. We often call it the super highway of transactions," Mr Brown said.

"There's the whole complexity and sophistication of technology and the amount of data we receive and process."

The increasing popularity of stored value cards used by travellers represents another growing threat, according to AUSTRAC.

"In relation to stored value travel cards we have done a risk assessment and it is a medium risk for money laundering and terrorism financing," Mr Brown said.

The rise of cryptocurrencies is another key risk for financial intelligence and, earlier this year, AUSTRAC was given regulatory oversight to monitor suspicious transactions by cyber criminals using the "dark web".

"The most significant unlawful uses are purchases of illicit products through dark nets and the dark web and to purchase more abhorrent products such as child pornography," Mr. Brown said.

AUSTRAC's concerns about financial services products, such as superannuation, comes as the banking royal commission approaches a major milestone, with commissioner Kenneth Hayne scheduled to deliver his interim report to the Government by September 30.

But Mr. Brown was reluctant to comment on shocking revelations about misbehaviour in the financial services industry where shareholder interests had come ahead of consumers.

"I think there will be multiple lessons learned for industry in relation to what arises from the banking royal commission," Mr. Brown said.

"But in terms of AUSTRAC and other regulators, I think we'll wait until those recommendations are made."

The Commonwealth Bank's almost 54,000 breaches of anti-money laundering laws was a key prosecution for AUSTRAC in 2017 and saw the bank fined $700 million earlier this year.

CBA's money laundering scandal accelerated the scheduled retirement of chief executive Ian Narev and was a key factor forcing the banking royal commission.

The Egmont Group summit will also discuss the case of Denmark's Danske Bank, which has been implicated in laundering $US322 billion ($442 billion) after suspicious transactions were uncovered in its Estonian operations.

Mr. Brown conceded it was getting tougher to keep up with sophisticated criminals laundering money and financing terror.

"Criminals being what they are will look for every loophole and every gap that is possibly out there," Mr. Brown said.

Mr. Brown said white collar criminals were "absolutely" involved in money laundering, and the complexity of business structures meant financial intelligence agencies were racing to monitor seemingly legitimate transactions that move money around the world.




International Anti-Money Laundering Standards for Crypto Expected in October


The Financial Action Task Force (FATF) said it is getting closer to the establishment of a global set of anti-money laundering (AML) standards for cryptocurrencies, Financial Times reported September 19.

The FATF is an international organization established in 1989 at the initiative of the G7 in order to develop policies and standards to fight money laundering. The agency’s scope of activities further expanded to combat terrorism financing. The FATF currently comprises 35 member jurisdictions and 2 regional organizations.

The agency’s president Marshall Billingslea reportedly said that he expects the coordination of a series of standards that will close “gaps” in global AML standards at an FATF plenary in October.

At that time, the FATF will purportedly discuss which existing standards should be adapted to digital currencies, as well as revise the assessment methods of how countries implement those standards. Billingslea also outlined the importance of developing standards that can be applied in a uniform manner.

According to Billingslea, current AML standards and regimes for cryptocurrencies are “very much a patchwork quilt or spotty process,” which is “creating significant vulnerabilities for both national and international financial systems”. Billingslea, noted that despite the risks related to this kind of assets, digital currency as an asset class presents “a great opportunity.”

In June, Cointelegraph reported that the FATF was planning to start developing binding rules for crypto exchanges later that month. The new rules would be an upgrade to the non-binding resolutions which were approved by the FATF in June 2015, considering whether existing guidelines on AML measures and reporting suspicious trading activity are still appropriate, and if they can be applied to new exchanges.

Earlier this month, Belgian think-tank Bruegel also called for unified legislation on cryptocurrencies and more scrutiny on how they distributed to investors. Bruegel noted that the virtual nature of cryptocurrencies limits the development of regulations, stating that a piecemeal approach to crypto regulation leaves an opportunity for regulatory arbitrage.




New EU rules to thwart money laundering and terrorist financing


EU 12-09-2018

MEPs approved new measures to combat terrorist financing, by preventing money laundering and tightening cash flow checks, on Wednesday.

The two laws will make it harder for terrorists and criminals to finance their activities, by closing the loopholes in the current money laundering rules and by making it easier for the authorities to detect and stop suspicious financial flows.

The new rules to prevent money laundering introduce:

• EU-wide definitions of money laundering-related crimes,

• EU-wide minimum penalties, such as a minimum of four years of imprisonment for money laundering maximum sentences, and

• New additional sanctions, such as barring those convicted of money laundering from running for public office, holding a position of public servant and excluding them from access to public funding.

The new rules on the criminalisation of money laundering were approved by 634 votes to 46, and 24 abstentions.

The new rules on cash flows:

• extend the definition of cash to include gold and anonymous prepaid electronic cash cards,

• enable authorities to register information about cash movements below the current €10,000 threshold and to temporarily seize cash if they suspect criminal activity, and

• require disclosure of unaccompanied cash sent by cargo or post.

The new rules on cash flows were approved by 625 votes to 39, and 34 abstentions.


Rapporteur Ignazio Corrao (EFDD, IT) said: “The new rules on criminalisation of money laundering hit criminals where it hurts them most: money. The rules prevent criminals from financing their activities - legal or illegal - with the proceeds of illicit actions. Money laundering is a dangerous crime and its harmful consequences are often underestimated. This directive adds a new important tool to fight against this crime. "

Rapporteur Juan Fernando López Aguilar (S&D, ES) said: "To properly fight economic fraud, money laundering and terrorism financing, the EU must reinforce its controls over cash entering or leaving its territory. We have incorporated the best practices at international level to new rules and solved some deficiencies and shortcomings of the current legal framework.”

Rapporteur Mady Delvaux (S&D, LU) said: “Cash is difficult to trace and easy to transfer, therefore criminals frequently use it. With this regulation, we are strengthening the tools to combat money laundering and terrorist financing through better and faster exchange of information between authorities, as well as by adopting a more complete definition of cash.”

Next steps

The new measures have already been agreed upon by the Parliament and Council negotiators, but still require the formal approval of the Council.

Member states will have 24 months from the date of entry into force of the criminalisation of money laundering directive to bring the new rules into force. The rules on cash controls will apply 30 months from the date into force of the regulation.




Switzerland tries to stem blockchain exodus by improving access to banks


ZURICH (Reuters) - In an effort to maintain its status as a cryptocurrency hub, Switzerland has taken steps to help blockchain companies access the traditional financial system by making it easier for them to open corporate bank accounts.

Faced with an exodus of cryptocurrency projects from the country due to falling access to the banking sector, the Swiss Bankers Association (SBA) on Friday issued guidelines to banks who may want to do business with the start ups.

Around 530 blockchain startups have settled in Switzerland’s Crypto Valley hub around Zurich and Zug, Oliver Bussmann, head of the Crypto Valley Association said. 

The companies need access to traditional banking services to deposit cash, pay salaries and carry out other day-to-day financing activities, but Swiss banks fear falling foul of anti-money laundering (AML) rules and other regulations.

“We believe that with these guidelines, we’ll be able to establish a basis for discussion between banks and innovative startups, making the dialogue simpler and facilitating the opening of accounts,” SBA strategic adviser Adrian Schatzmann told a news conference.

Only a handful of Switzerland’s 250 banks ever allowed companies to deposit the cash equivalent of cryptocurrencies raised in digital fundraisers known as initial coin offerings (ICOs).

Two of those withdrew their services in the last year, with Zuercher Kantonalbank (ZKB), the fourth largest Swiss bank, closing the accounts of more than 20 companies, industry sources told Reuters in July.

The banks are worried because some of the companies that carried out ICOs did not do AML checks on their contributors, meaning the banks themselves could fall foul of AML rules, the sources said.

The new guidelines spell out separate checks that the association recommends when opening accounts for blockchain firms that carry out ICOs and those that do not.

They outline recommended know-your-customer and AML checks for ICOs that raise funds in fiat currencies such as Swiss francs, euros and dollars, and those that raise funds through other cryptocurrencies.

The rules should help banks understand what assessments they should carry out, but will also help blockchain and cryptocurrency firms know what information they must provide, and what measures they must take, to qualify for an account.

“This provides more clarity not only to banks, but also to startups,” Bussmann said.

While initial discussions with the banks have been positive, according to SBA Deputy Chief Executive August Benz, it remains to be seen how they will respond to the new guidelines.




Pakistan, UK discuss regional security, money laundering


LONDON: UK's Home Secretary Sajid Javid met with Foreign Minister Shah Mahmood Qureshi on Monday and discussed issues of mutual interest.

The meeting took place at the Ministry of Foreign Affairs in Islamabad.

Speaking to the visiting official, Foreign Minister Qureshi emphasized on the need to transform the historic ties between Pakistan and United Kingdom into a strategic partnership.

The two also exchanged views on regional security, counter-terrorism, return of Pakistani assets and money laundering.

Sajid Javid  expressed the desire of British government to strengthen bilateral relations and cooperation between the two countries.

Minister of State for Interior Shahryar Afridi was also present on this occasion.



INTERPOL and Serbian Presidents discuss enhanced cooperation in combating crime


BELGRADE, Serbia - Enhancing cooperation in combating all forms of transnational crime was the focus of a series of meetings between INTERPOL President Meng Hongwei and top Serbian officials.

President Meng met with Serbian President Aleksandar Vučić, Prime Minister Ana Brnabić and Minister of the Interior Nebojša Stefanović during his three-day (10 - 12 September) visit to Belgrade.

President Meng discussed a range of security issues with Vladimir Rebić, General Police Director and other senior law enforcement officials. President Meng indicated that INTERPOL and local police forces must stay united to tackle emerging crimes.

President Meng said, "Serbia has been actively supporting INTERPOL's initiatives and is playing a key role regarding security in the region.

"We will continue to maintain a high degree of cooperation to deal with all forms of transnational crimes, including emerging crimes.”

During his visit to Serbia, President Meng also met with senior officials at the Directorate for International Operational Police Cooperation which houses the INTERPOL National Central Bureau for Serbia.

The President also watched a demonstration by the Special Anti-Terrorist Unit during a tour of their headquarters.



Australian Watchdog to Apply Market Rules to Crypto Exchanges u


A top Australian financial regulator has indicated it will take a new approach when regulating cryptocurrency exchanges, as well as tighten scrutiny of initial coin offerings (ICOs),.

In its a corporate plan for 2018–2022, released Friday, the Australian Securities and Investments Commission (ASIC) outlined its areas of focus for the period. Top of that list is to continue "monitoring threats of harm from emerging products" such as ICOs and cryptocurrencies.

Further, for 2018 and 2019, ASIC said it is developing a new framework that will apply "the principles for regulating market infrastructure providers to crypto exchanges" and will intervene where "there is poor behavior and potential harm to consumers and investors."

According to the ASIC website, its current market infrastructure principals include a licensing scheme, via which it seeks to supervise financial market operators, settlement facilities, derivative trading and market participants.

The planned framework follows cross-department efforts the ASIC has been taking to implement supervisory approaches, such as dispatching staff onsite in financial institutions related to emerging tech including cryptocurrency, ASIC indicated.

Currently, cryptocurrency exchanges in Australia are required to comply with know-your-customer and anti-money laundering standards enforced by Austrac, the country's financial intelligence agency.

ASIC, however, has not issued any pertinent regulation for crypto exchanges, but did published guidelines last year for businesses wishing to conduct ICOs.

The plan appears a timely one, as the country has already seen one public firm seeking to raise capital via a token sale to fund the launch of a cryptocurrency exchange.

As CoinDesk reported this week, an IT firm called Byte Power Group has already started selling its proprietary tokens to private investors in Australia and Singapore in an effort to raise a total of $15 million.




Uzbekistan, South Korea to jointly fight financing of terrorism


The Prosecutor General's Office of Uzbekistan and the Financial Intelligence Unit of South Korea (KoFIU) have signed a memorandum of cooperation providing for a joint fight against money laundering and terrorism financing, Sputnik Uzbekistan reported citing the press service of the Prosecutor General's Office of Uzbekistan.

The document was signed in Seoul at the Sixth Symposium of the Asia/Pacific Group on Money Laundering.

"According to the document, the cooperation will be carried out in the framework of activities to combat the money laundering and the financing of terrorism by exchanging information on suspicious financial transactions and persons engaged in them," the report said.

The parties also expressed readiness to further expand the bilateral agreements reached during the visit of President of Uzbekistan Shavkat Mirziyoyev to South Korea in November 2017.



Thai Money Laundering Watchdog Looks to Tackle Crypto-Related Crimes Thailand’s Anti-Money Laundering Office (AMLO) is considering creating its own digital wallet to investigate crypto-related cybercrime, local news outlet The Nation wrote Monday, September 3. The matter was discussed at a local seminar cryptocurrency crime within the current legal system. According to Witthaya Neetitham, secretary for AMLO, the regulator wants to adapt to the new technology by making it possibly for the government to confiscate crypto involved in fraud. “We have discussed launching our own ‘AMLO Wallet’ to hold or confiscate digital currency from illegal sources,” he said. Under existing legislation, Thai officials can only jail or extradite those who were convicted of cybercrime or confiscate their physical assets. Nevertheless, authorities are not able to reach digital wallets allegedly involved in a crime, The Nation claims. Despite new measures, it might still be difficult to track cryptocurrency operators who work outside the current licensing system. “We cannot identify the cryptocurrency operator or receivers when duped victims transfer money to the criminals,” AMLO secretary said. The Nation also mentions that Thai courts are unlikely to accept evidence on crypto transactions and fraud if it is difficult to identify persons involved. According to recent statistics published by the United Nations Office on Drugs and Crime, the global cost of cybercrime is approaching $600 bln. In Thailand crypto-related felonies are mostly limited to bogus investments in Bitcoin (BTC), or other cryptocurrencies. As Cointelegraph reported back in 2017, Alexandre Cazes, a Canadian who allegedly operated the online dark marketplace AlphaBay, had spent eight years in Thailand before being arrested by local police at the request of U.S. authorities. https://cointelegraph.com


Published in Dawn, September 6th, 2018. 

 KARACHI: In order to protect non-profit organisations (NPOs) from terror financing abuse, the Securities and Exchange Commission of Pakistan (SECP) has issued guidelines to encourage financial accounting, usage of formal financial systems to transfer funds and increase due diligence and auditing functions of the sector.

“These guidelines are intended to assist NPOs licensed and registered as associations not-for-profit under section 42 of the Companies Act, 2017 to serve as a tool for prevention from money laundering and terror financing (ML/TF) abuses”, according to the guidelines issued on the SECP website. The guidelines seek to improve country’s overall outlook on increasing adherence to anti-money laundering and counter-financing terrorism (AML/CFT) standards set internationally in addition to improving the understanding of due diligence with respect to AML/CFT in the NPO sector.

Terror financing, as explained in the guidelines, is the “financial support, in any form, of terrorism or of those who encourage, plan or engage in terrorism.” It also includes raising, transferring and using funds to finance terrorism.

The risks associated with the NPOs are multifaceted since they enjoy high trust and confidence from the public and are subject to limited oversight. NPOs can be abused by raising funds in its name, using the non-profit to transport people, cash, weapons and terrorist propaganda, misuse of NPO from within and setting up NPOs for illegal or improper purposes.

NPOs in Pakistan are subject to a list of laws including Anti-Money Laundering Act, 2010, Anti-Terrorism Act, 1997, Companies Act, 2017, Associations with Charitable and Not-for-Profit Objects Regulations, 2018, Income Tax Ordinance, 2001 and Prevention of Electronic Crimes Act, 2016.

In addition to these, National Counter Terrorism Authority (Nacta) has also “drafted Model Charity Law which is in process of enactment and contains various provisions to ensure transparency and accountability, sharing of registration details amongst the provinces, and assessment mechanisms.”, according to the commission.

These guidelines will bring the laws governing the NPOs in line with the Financial Action Task Force (FATF) recommendations.

The amendments have presented a list of good practices for NPOs which includes adoption of best practices, good governance, knowledge on beneficiaries and partners, and adequate information on donors and employees.

The guidelines, in addition to the aforementioned measures, have also issued illustrative characteristics of high risk NPOs and provided key pointers on regulatory approach to mitigate ML/TF risks.




ISLAMABAD: The Prime Minister’s Task Force on the retrieval of wealth illegally stashed overseas by Pakistan has recommended the formation of an asset recovery unit to move against the 100 biggest owners of offshore money and properties.

The assets recovery unit would be located at the Prime Minister’s (PM) Office and comprise representatives of the National Accountability Bureau, Federal Investigation Agency, State Bank of Pakistan and Federal Board of Revenue (FBR) to ensure coordination between government agencies.

In compliance with the directives of the Supreme Court, the Pakistan Tehreek-i-Insaf (PTI) government wants to select around 100 major cases to establish a precedent whereby efforts would be made to repatriate illegal wealth through the mutual legal assistance track of the OECD agreement.

It would also seek to bring home non-taxed income and proceeds of corruption through the enforcement of avoidance of double taxation agreements with various countries.

The PM's task force recommended that the asset recovery unit be formed on the lines of the joint investigation team which probed the Panama Papers case on the directives of the apex court.

However, independent experts believe that the PTI-led government would have to institute major changes in taxation laws, anti-money laundering regulations, and the Protection of Economic Reforms Act 1992 to expedite the return of illegal assets loosely estimated to be worth $200 billion.

Prime Minister Imran Khan constituted the task force, headed by Barrister Shahzad Akbar, to recommend ways and means of repatriating illegal wealth either stashed in foreign banks or turned into assets around the world. Without providing legal cover for stern action, such as the suspension of Computerised National Identity Cards and machine-readable passports, it would not be an easy task, official sources said.

Under existing tax laws, the FBR can issue a tax notice to an unregistered person and, in case of non-compliance, possesses powers to generate a tax demand notice. Then an ex parte assessment can be carried out, eventually leading to the prosecution and arrest of the violator.

However, it is unclear how the FBR would expedite such orders against individuals possessing assets in overseas jurisdictions. Any action which fails to take into account the applicable foreign laws would be a waste of time and money, the official sources said.

The chairman of PM’s Task Force, Barrister Shahzad Akbar, told The News he had briefed the federal cabinet about the situation and recommended the establishment of the asset recovery unit at the PM Office to ensure inter-departmental coordination in achieving the desired objectives. He said that the task force has also submitted its recommendations on bringing back offshore wealth to the Supreme Court.

Shahzad said the task force had not recommended changes in laws, because the job could be performed through improved inter-departmental coordination. The representation of four major agencies in the asset recovery unit would amicably resolve any issues. With the full backing of the Prime Minister, corrupt individuals could not resort to dillydallying tactics, he said.

Shahzad said that the legal framework provided by existing NAB laws had already led to the recovery of $22 million from abroad. He said that tax-related issues would be dealt by the FBR and the enforcement of the OECD agreement from September onward would make it difficult to hide assets abroad.