- •Contents
- •Abbreviations and acronyms
- •Introduction
- •1.1. A brief history of money laundering
- •1. Al Capone, 1920–30s
- •2. Meyer Lansky, 1930–50s
- •3. Watergate Scandal, 1973
- •1.2. The first stage: Al Capone tax evasion charges
- •Illicit earnings were mingled with receipts from the laundromat business and then paid back to the mobsters, making an impression of legitimate income
- •1.3. The subsequent stages: better hiding techniques
- •1.4. The appearance of “money laundering” expression in the legal context
- •1.5. Further development of the international aml/cft standards.
- •2.1. Basic concept of money laundering
- •2.2. Predicate offences: the scope and methods of description
- •2.3. Definition of money laundering in the narrow sense
- •2.4. Definition of money laundering in the broad sense
- •2.5. Anti-money laundering measures of combating organized crime
- •2.6. The process of money laundering
- •3.1. Key institutions of a national aml/cft regime
- •Investigation and field operations, e.G. Making searches, taking witness statements
- •3.2. Methodology bases of a risk-based approach and national coordination
- •Identify
- •Implementation
- •3.3. Financial institutions: general definition and their activities and operations related to managing clients’ assets
- •Individual
- •3.4. Financial institutions: other activities and operations
- •3.6. Risk-assessment obligations and decisions for countries
- •Information necessary for conducting aml/cft risk assessments
- •Including changes to
- •4.1. An extension liability for money laundering to the predicate offence perpetrator: the adverse implications for the economy
- •I. The perpetrator of the predicate offence is not held liable for laundering the proceeds
- •II. The perpetrator of the predicate offence is held liable for laundering the proceeds
- •4.2. Dual criminality for offences committed internationally
- •In Beta this conduct is a predicate offence for money laundering
- •In Alpha this conduct is not a predicate offence for money laundering
- •In Beta this conduct is not a predicate offence for money laundering
- •In Alpha this conduct is a predicate offence for money laundering
- •4.3. “State of mind” connected with a money laundering offence
- •Vienna Convention, Art. 2.3
- •4.4. Confiscation and provisional measures
- •Vienna Convention
- •5.1. Social and economic origins of terrorism
- •5.2. Basic concept of terrorist financing
- •5.3. Legal definition of terrorism and terrorist financing
- •Indirectly
- •Its purpose is
- •It is intended to cause
- •5.4. Characteristics of the terrorist financing offence
- •5 .5. Targeted financial sanctions related to terrorism, terrorist financing and proliferation
- •6.1. The United Nations bodies of the international aml/cft framework
- •1. The United Nations Security Council (unsc)
- •2. The United Nations Office on Drugs and Crime (unodc)
- •It is responsible for carrying out the Global Program against Money Laundering (gpml est. 1997)
- •6.2. The United Nations organizations of the international aml/cft framework
- •1. The International Monetary Fund (imf)
- •2. The World Bank
- •6.3. Main functions of the Financial Action Taskforce
- •Identifying current money laundering and terrorist financing threats
- •Identification of high-risk and non-cooperative jurisdictions, release of relevant public documents
- •6.6. The Wolfsberg Group of banks and its documents
- •It is an association of eleven global private banks that came together in 2000 to develop aml/cft industry standards
- •7.1. General requirements for aml/cft programs of financial institutions and groups of financial institutions
- •Including appropriate compliance management arrangements
- •Intra-group sharing of information (on customers, accounts and transactions) is required for the purposes of cdd and ml/tf risk management
- •7.2. Methodology approach to customer due diligence
- •Information accompanying wire transfers (r. 16, in)
- •Veracity
- •Verifying the customer’s identity
- •Information
- •7.3. Additional features of the customer due diligence
- •It must be ensured that documents, data and information collected are kept up-to-date
- •It may be permitted to complete the verification as soon as practically possible
- •7.4. Customer due diligence measures for legal persons and their arrangements
- •It should be required to understand the following in relation to customers that are legal persons or legal arrangements, r. 10, in, (c)
- •If different, a principal place of business
- •7.5. Actions of financial institutions in case of inability to comply with customer due diligence requirements
- •If it is not possible for a financial institution to comply with the cdd requirements
- •If there are reasonable grounds to suspect that funds are proceeds of criminal activity or are related to terrorist financing, r. 20
- •If they report their suspicions in good faith, even if they do not know precisely what the underlying activity was (they do not know whether activity was criminal)
- •7.6. Record-keeping requirements for financial institutions
- •Information obtained through the cdd measures
- •8.1. Reliance on customer due diligence information received from third parties
- •8.2. Potentially higher-risk situations for enhanced customer due diligence measures
- •It is mandatory to apply enhanced cdd measures when the fatf calls for it, r. 19
- •It was identified by a mutual evaluation, assessment or published in a follow up report
- •8.3. Lower-risk situations for simplified customer due diligence measures
- •If these requirements can ensure adequate transparence of beneficial ownership
- •It was identified by a mutual evaluation
- •8.4. Enhanced customer due diligence measures
- •Information from public databases
- •Volume of assets
- •Increasing the number and timing of controls applied
- •8.5. Simplified customer due diligence measures
- •Verify the identity of
- •Inferring the purpose and nature of the business relationship
- •9.1. Aml/cft requirements for cross-border correspondent banking relationships
- •Including whether the institution has been subject to a money laundering or terrorist financing investigation or regulatory action
- •9.2. Definition of wire transfers and activities of involved parties
- •Initiates the wire transfer and transfers the funds on behalf of the originator
- •Intermediary financial institution(s)
- •Irrespective of whether the originator and the beneficiary are the same person
- •Includes wire transfers that take place entirely with the borders of the European Economic Area (eea)
- •9.4. Aml/cft measures of information gathering related to wire transfers
- •In the absence of an account
- •9.5. Aml/cft responsibilities of financial institutions performing wire transfers
- •9.6. Aml/cft obligations for persons that provide money or value transfer services
- •If these institutions are subject to aml/cft requirements
- •10.1. Definition of politically exposed persons
- •Individuals who are (have been) entrusted with prominent public functions such as
- •It covers family members and close associates of pePs
- •It does not cover middle ranking or more junior individuals
- •10.2. Additional measures for politically exposed persons
- •In case of a higher risk
- •10.3. Aml/cft requirements for financial institutions with foreign operations
- •If aml/cft legislature of the host country does not permit the implementation of
- •If these measures are not sufficient
- •10.4. Customer due diligence and record-keeping requirements for designated non-financial businesses and professions
- •Independent legal professionals
- •Independent accountants
- •10.5. Other aml/cft requirements for designated non-financial businesses and professions
Abbreviations and acronyms
AML |
anti-money laundering |
AML/CFT |
anti-money laundering and countering the financing of terrorism |
APG |
Asia/Pacific Group on Money Laundering |
ARS |
alternative remittance system |
BSA |
The U.S. Bank Secrecy Act (1970) |
CAS |
Country Assistance Strategy |
CFATF |
Caribbean Financial Action Task Force |
CFT |
countering (or combating)the financing of terrorism |
COE |
Council of Europe |
CTR |
currency transaction report |
EAG |
Eurasian Group on Combating Money Laundering and the Financing of Terrorism |
ESAAMLG |
Eastern and Southern Africa Anti-Money Laundering Group |
ESW |
Egmont Secure Web |
FATF |
Financial Action Task Force |
FATF 40 Recommendations |
The FATF 40 Recommendations on anti-money laundering(were in effect during 1990–2012) |
FATF 40+9 Recommendations |
The FATF 40 Recommendations and The FATF IX Recommendations treated as a single document |
FATF IX Special Recommendations |
The FATF IX Special Recommendations on combating the financing of terrorism(were in effect during 2001–2012) |
First paper on the review of the standards |
The Review of the Standards – Preparation for the 4th Round of Mutual Evaluations. A consultation paper published by FATF in 2010. |
FIU |
Financial intelligence unit |
FSRB |
FATF Style Regional Bodies |
FT |
financing of terrorism |
GAFISUD |
Financial Action Task Force on Money Laundering in South America |
IAIS |
International Association of Insurance Supervisors |
IMF |
International Monetary Fund |
IN |
Interpretive Note to a Recommendation from the FATF Recommendations |
IOSCO |
International Organization of Securities Commissions |
KYC |
know-your-customer |
Merida Convention |
United Nations Convention Against Corruption (2003) |
ML |
money laundering |
MONEYVAL |
Council of Europe the Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures |
MOU |
memorandum of understanding |
NCCT |
Non-Cooperative Countries and Territories |
OAS |
Organization of American States |
OFC |
offshore financial center |
Palermo Convention |
United Nations Convention Against Transnational Organized Crime (2000) |
PC-R-EV |
Now known as MONEYVAL |
R. |
A Recommendation from the FATF Recommendations |
ROSC |
Report on Observance of Standards and Codes |
SAR |
suspicious activity report |
Second paper on the review of the standards |
The Review of the Standards – Preparation for the 4th Round of Mutual Evaluations. The second consultation paper published by FATF in 2011. |
SRO |
Self-regulatory organization |
STR |
suspicious transaction report |
Strasbourg Convention |
Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime (1990) |
TA |
Technical Assistance |
TCSP |
Trust and Company Service Providers |
Terrorist Financing Convention |
The International Convention for the Suppression of the Financing of terrorism (New York, 1999) |
The FATF Recommendations |
The FATF Recommendations (International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation of February 2012) |
UN |
United Nations |
UNSC |
United Nations Security Council |
Vienna Convention |
United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988) |
Warsaw Convention |
Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (2005) |
WMD |
weapons of mass destruction |
Wolfsberg Group |
Wolfsberg Group of Banks |