№14 (AUGUST 2012)

EAG BULLETIN

CHAIRMAN’S COLUMN EAG 16th Plenary Meeting: Members of the FATF Global Network Events and Results Meet in Rome Page 2 The Eurasian Group’s on 2012, during which the issue requirements for politically combating money laundering of removing Turkmenistan exposed persons (PEPs) Financial Intelligence and financing of terrorism from the enhanced monitor- and fight with corruption. Units Anniversary Summit th (EAG) 16 Plenary meeting ing procedure was to be dis- A representative from in Saint Petersburg was held from May 22 to 25, cussed. The country showed the Middle East and North Page 3 2012, in Moscow (Russia). that the majority of steps Africa Financial Task stipulated in its Action plan The main goal of the Force (MENAFATF) took Results of the EAG EAG is to provide effective have been fulfilled, whilst also part in the Plenary and cooperation on regional demonstrating significant shared regional AML/CFT Consultative Forum level as well as integration progress in developing its experience and techniques Dedicated to the Revision of of EAG member states anti-laundering law. Once and also talked about the FATF Recommendations Dear colleagues! into international AML/CFT the report was heard, it current initiatives. The EAG was clear to participants Page 4 Past months were full system in compliance with Secretariat expressed hope that Turkmenistan should of events, which not only the FATF Recommendations that the fruitful cooperation be removed from the FATF The EAG Secretariat pre- strengthened the EAG position and anti money laundering between the Eurasian “grey” list. sented information on issues in the global AML/CFT system, standards of other Group and the MENAFATF of effectiveness of EAG mem- but also laid a basis for international organizations. France, Mongolia and the in conducting mutual ber state AML/CFT systems. realization of goals and tasks “EAG member states are were also evaluations and typologies of the group in the second half refining the institutional and welcomed as the new group research will continue to Following a decision at of this year. legal basis for combating observers during the Plenary develop further. the Plenary, a new working First of all, it is about the work on clarification of the changes in the FATF Recommendations. The Russian translation of the 40 Recommendations was presented at the EAG Consultative Forum, which was held in May this year. The similarly named electronic product, which allows for the participants of the AML/CFT system and wide public to get acquainted with the novelties in the FATF standards, was launched on the EAG web-site. Conducting typologies research and workshops in the line of the FATF and FSRBs made progress. The results of this work done by the group will be presented at the 17th Plenary meeting in India. It is planned to hold a joint workshop with the MONEYVAL on clarification of the new FATF standards this money laundering and fi- meeting. “The participation In light of the revised group was set up to combat autumn. nancing of terrorism, their fi- of France, Mongolia and the FATF Recommendations, financing of drug trafficking, Extension of the international nancial intelligence units are Egmont Group in the EAG’s one of the tasks the EAG crime and terrorism. The cooperation is one of priorities fully operational, the influ- work will bring positive currently faces is to work on group’s mandate, co-chairs for the Eurasian group. We ence and authority of which results both for the Eurasian clarifying and implementing from Russia, the Kyrgyz welcome Mongolia, France continues to grow. This has Group and each individual them on a national level, Republic and Belarus, as and the Egmont group as new only been made possible country, while the role and with the help of the modern well as the Action plan for the EAG observers, and hope for thanks to our work and at- participation of observers technology. To this end, the second half of 2012 were all their active participation in the mosphere of joint under- in the EAG’s work on the International Training and approved. activities of the group. standing and partnership,” whole will become even Methodology Centre for Fi- The latest round of EAG Consolidation of efforts on Chairman of the Eurasian more important”, the EAG nancial Monitoring (Russia) Consultations with the private national and regional grounds Group Yu. Chikhanchin said Chairman said. developed and demonstrat- sector and a meeting of creates a basis for long-term in his welcome message to The Plenary approved ed its interactive electronic the regional FATF “Europe- interaction of the FSRBs. participants of the Plenary the Action plan of the EAG product on the updated Eurasia” Subgroup of the Moreover, this work encourages meeting. Chairman Yury Chikchanchin FATF Recommendations at International Cooperation effective implementation of Progress reports of EAG for 2011-2012. the Plenary and the EAG Review Group (EERRG the 40 Recommendations into member states were one Consultations with private ICRG FATF) was held the The FATF Secretariat sector. The E-product is national AML/CFT regimes of main agendas of the informed the meeting’s day before the Plenary. of the member states, which meeting. In particular, available both in English participants about current and Russian on the EAG In addition, the tenure of is important in the light of information on eliminating initiatives to develop methods the EAG’s Acting Executive preparation to the 4th round of strategic deficiencies in the and the ITMCFM official to evaluate the compliance web-sites. Secretary Boris Toropov the FATF’s and the 2nd round national AML/CFT systems of national AML/CFT (Russia) was extended until of the EAG mutual evaluations. of the Kyrgyz Republic, the systems with FATF re- A number of bilateral the 17th Plenary meeting. Republic of Tajikistan and cooperation agreements quirements, the creation of Kazakhstan, Russia and Turkmenistan was presented. working groups to coordinate were signed between Yury Chikhanchin financial intelligence units Tajikistan representatives The report from the latter the FATF global network, in the EAG Secretariat took EAG Chairman country was of particular the development of the (FIUs) of EAG member states at events held as part of the part for the first time at the importance given the FATF FATF guidance to new and Plenary meeting. Plenary meeting in mobile payment systems, Plenary week. 2 Members of the FATF Global Network Meet in Rome

Working group biannual monitoring regime. Russia Turkmenistan successfully implementation of the revised 40 meetings and the FATF must then present a final and managed this task and was Recommendations at a global level in Plenary meeting took comprehensive report at the Plenary therefore transferred to standard a statement summarizing the results place in Rome (Italy) meeting in in next June. monitoring procedures. As indicated of the Plenary meeting in Rome. between June 18 Turkmenistan was removed from in the FATF final Plenary documents On the sidelines of the Plenary the and 22. the “grey” list during the FATF Turkmenistan will continu e to further incumbent president, president-elect Representatives of Plenary week. One may treat it as an improve its national AMT/CFT system and vice president met with FSRBs’ FATF member states acknowledgement of the significant under the Eurasian Group’s control heads, continuing the tradition of and organizations as progress this country has made in mechanisms. The EAG and Russian annual “summits” of members of the well as observers discussed and developing national AMT/CFT system. Federation played an important role FATF Global Network Coordination made decisions on dozens of issues in helping Ashgabat cease to be Group (GNCG). This meeting The FATF “grey” list includes “greylisted”. of great significance in protecting countries, which have serious provided a great opportunity to the global financial system from strategic deficiencies in meeting The results of Italian presidency coordinate the efforts of the GNCG money laundering and financing of international AML/CFT standards, were also outlined in Rome during members at the highest level terrorism. and work together with this the FATF meeting. The President regarding strategic issues in An EAG delegation took an active organization to develop an action until 2014 will be Norwegian achieving consistency in procedures part in the Working groups and FATF plan to resolve these deficiencies, representative Bjorn Skogstad of mutual evaluation that will be Plenary meeting. and committed to implement this Aamo. conducted by the FATF and FSRBs. Procedures for the 4 th round plan within the agreed time limit at The FATF reiterated its commitment In February this year, the Eurasian of mutual evaluations on the the highest political level. to render assistance in the Group backed creation of a new basis of the revisions of the FATF working group to coordinate the Recommendations carried out in global FATF network. The group’s February were discussed in the Bjorn Skogstad Aamo () mandate and plan were approved at light of the application of AML/CFT the Plenary meeting in June. measures monitoring. FATF President 2012-2013 Developments in the sphere Progress reports on the mutual In July 2012, Mr. Bjorn Skogstad of typologies research were evaluations of national AML/CFT Aamo became President of the FATF. He also touched upon. The FATF systems were reviewed, including succeeded Giancarlo Del Bufalo of Italy. plenary approved three typologies those of EAG member states. reports: “Specific Risk Factors Bjorn S. Aamo, Special Advisor in in the Laundering of Proceeds of th In particular, a 5 progress report of the Ministry of Finance, Norway. Mr. Corruption”, “Illegal Tobacco Trade”, India was approved. India was asked Aamo was Director General of the FSA “Operational Issues Financial to produce another report at the next of Norway (Finanstilsynet) from 1993 Investigations Guidance”. They are Plenary as some shortcomings were to 2011. In this capacity he was active currently available on the website of not removed. in European and global supervisory this organization. A progress report of the Russian organizations on banking and insurance supervision. As before, the main topic of Federation was also approved during discussion for FATF experts were a meeting of the Working group on He was state secretary and Head of approaches to mutual evaluations evaluation and implementation. staff at the Prime Minister Office 1990 and effectiveness assessment for Russia will have to present another to 1993 and State secretary in the Ministry of Finance 1973 to 1979 the next round methodology being report on the steps taken to eliminate and from 1986 to 1989. He has also held positions as Director of The developed. The discussion of these continuing deficiencies to the FATF Economic Affairs department of EFTA in Geneva and for The Regional issues will continue at the next Secretariat in February 2013 to be Development Fund of Norway. Plenary meeting in October. able to switch to a less stringent,

Eurasian Group took part in APG Plenary Meeting

Working groups implementation and future of the up topics and organizing the seminar issues surrounding national risks in and the 15th APG budget, short and mid-term was also held during the event in AML/CFT, with utilization of regional Annual Asia/Pacific plans, structure of the Group and its Brisbane. Both parties agreed to hold expertise. Group on Money Secretariat. the event in Ulan-Bator (Mongolia) at During the discussion of nationwide Laundering (APG) The FATF President traditionally the end of 2013. topics at the Plenary, the EAG meeting took place takes part in APG events. President Given that the typologies research delegation informed attendees from July 15 to 20 in Brisbane, Bjorn Aamo and the FATF Executive topics for 2013 are to be decided about Mongolia becoming an EAG Australia. Secretary Rick McDonnell took part upon at the 17th EAG Plenary member state and possible ways of Delegations discussed a range of this time. meeting in November this year the helping the country to fulfill the FATF topics regarding mutual evaluations The APG agreed to hold a joint APG Secretariat expressed its wish Action plan. Mongolia is still subject and monitoring the progress of typology workshop with the EAG to take an active part in discussion of to enhanced APG monitoring, as it member states in improving their slated for the end of next year. A this issue. has not yet made sufficient progress national anti-laundering systems, roadmap for preparing the event was In addition, the EAG and APG since the last APG meeting. Mongolia as well as the results of work on developed and basicly approved. A Secretariats agreed on the sidelines must present its next progress report typology. A number of organizational consultation with the APG Secretariat of the Annual meeting to work more by January 31, 2013. issues were also discussed including on developing approaches for drawing closely and exchange experience in 3 Financial Intelligence Units Anniversary Summit in Saint Petersburg

Modern crime has very warm welcome and did everything status of the Egmont Group in the EAG and Co-operation in Europe (OSCE), a distinct international possible to ensure not only that they will assist in development of further which is already an EAG observer. nature and it would be could work in comfort, but also see the cooperation of the groups. During the meetings between FIUs, futile to try and tackle sights of the Northern Capital. “The The results of the best financial 65 memorandums of understanding it without the combined global demands facing the majority investigation of the year competition, cooperation and information exchange efforts of different countries. Efforts of countries, including Russia, mean where countries present analytical agreements were signed, paving the way to counter money laundering are we face many challenges ahead”, materials and describe money- for carrying out financial investigations. coordinated by the Egmont Group, Georgy Poltavchenko said. However, laundering schemes they uncovered, Among them 16 agreements signed by th which 20 Anniversary Plenary meeting, he expressed confidence that the were also announced at the meeting. Eurasian group FIUs. which was held in Saint Petersburg in meeting of the organization’s members Russia’s financial intelligence unit A friendly soccer competition took July this year. Membership of a financial in Saint Petersburg would be productive Rosfinmonitoring was the victor. The intelligence unit (FIU) in the Egmont and another step towards improving place on the “sidelines” of the Plenary FIU investigated fraud and the illegal meeting, with the Eurasian Group Group is a FATF mandatory requirement international cooperation in tackling transfer of money abroad. Russia for national anti-money laundering and crime. entering a team for the first time. After was assisted by 18 FIUs from around a struggle, the EAG team was terrorist financing systems (AML/CFT). During the Plenary meeting, FIU Members of the Group met to representatives and observers discuss ways of solving international discussed issues related to evaluating Boudewijn Verhelst, Chair of the cooperation issues between the and increasing the operational efficiency financial intelligence units and share to of financial intelligence units via Egmont Group, director of the AML/CFT experience. improving the exchange of information, Belgian Financial Intelligence The jubilee meeting was co-chaired problems in recovering criminal assets Processing Unit by Chairman of the Egmont Group and and designating tax crimes as predicate offences for money laundering. Deputy Director of the FIU in Belgium In June 2010, Mr. Boudewijn Verhelst was Boudewijn Verhelst, as well as by The management of the FIUs appointed Chair of the Egmont Group of EAG Chairman and Rosfinmonitoring discussed questions over budget, Financial Intelligence Units. Director Yury Chikhanchin. Around 400 charter and compliance with the financial intelligence executives from all Egmont Groups information exchange From 1975 to 1994, Mr. Verhelst served as around the world took part in the Plenary standards; one of the main issues King’s Attorney (Public Prosecutor), in charge and working groups meetings, as well being improving the effectiveness of of the financial fraud section in Bruges. In 1994, he was appointed as representatives from 17 international AML/CFT measures. Deputy Attorney General at the Court of Appeal in Gent. He has also observer organizations, including the been seconded as deputy director of the Belgian Financial Intelligence During the meeting between FIU Processing Unit, CTIF-CFI since July 1993. EAG. heads, the Group’s new Executive This was the first time the event was Secretary Kevin Stevenson was Mr. Verhelst brings a wealth of knowledge and experience to his post held in Russia. According to Boudewijn approved. Stevenson was previously a as Chair. He was a lecturer in commercial and economic law at the Police Verhelst, this is testament to Russia’s Senior Financial Sector Specialist at the Academy for the Province of West-Flanders, as well as Law Enforcement commitment to take an active role in World Bank. expert to the Moneyval Committee as part of the Council of Europe. tackling financial crime. Training sessions and seminars for His other posting include Evaluator of legal and law enforcement in FATF, A greeting message from Russian FIU employees were an important Council of Europe, CFATF, WB and various IMF AML/CFT assessments. President Vladimir Putin was sent to the part of the meeting. These training guests and participants of the meeting. events examined AML/CFT risks and the world in finding the “dirty” money eventually defeated by the Egmont and He underlined that the Egmont Group preventative measures associated with channeled abroad. Rosfinmonitoring teams, but the game currently unites financial intelligence the latest financial products, improving demonstrated solidarity and a strong units in 127 countries and plays a crucial technical equipment, and the application The following four new members were welcomed to the Egmont Group during team spirit. The Russian FIU was the role in combating money laundering of advanced analytical methods. overall winner and financing of terrorism. the meeting: Gabon, Jordan, Tunisia FIU delegations from Eurasian Group and Tajikistan, which is a member of the The next meeting of the Egmont Saint Petersburg Governor Georgy member states actively participated in Eurasian Group. Therefore, the number Group Commitee and working groups is Poltavchenko and his Deputy Oleg the plenary meeting. of Egmont FIUs has now reached 131. scheduled for January 2013 in Belgium, Markov were guests of honor at the st During his address to participants, Mr Egmont Group observer status was while the groups 21 Plenary meeting opening ceremony. Mr. Poltavchenko Verhelst emphasized that the observer will take place in South Africa in July. and Mr. Markov gave the guests a granted to the Organization for Security 4 Results of the EAG Consultative Forum Dedicated to the Revision of the FATF Recommendations

A revised version of the international international cooperation; extending standards on combating money the list of predicate offences for money laundering, financing of terrorism laundering to include tax crimes; and proliferation (AML/CFT/FP) new requirements to enhance the was approved at the FATF Plenary transparency of wire transfers; new meeting in February 2012. These standards relating to the financing changes in the Recommendations of proliferation of weapons of mass mean that new requirements need destruction; strengthened powers to be implemented in the legislation for law enforcement authorities; and of countries, including EAG member a new emphasis on the risk-based states. Therefore, one of the main approach. The FATF is currently goals of the FATF-style regional developing a methodology to assess bodies is to clarify these amendments compliance with these new standards, methods to measure the effectiveness end, the International Training and in their respective regions. including the effectiveness of their of their application. Methodology Centre for Financial The Consultative Forum “Public implementation. Representatives of EAG member Monitoring (Russia) developed the authorities and private sector co- The key FATF requirement was states and observers also gave “Updated edition of AML/CFT/FP operation improvement in relation to the implementation of a risk-based presentations at the Forum. The international standards” electronic new FATF Standards” was held on approach, which is designed to main discussion topics were the product. It was the EAG Chairman May 22, 2012 as part of the 16 th EAG create a more targeted control of use of financial monitoring methods Yury Chikhanchin’s initiative to Plenary week. ML/FT, and improve the effectiveness to detect tax crimes as predicate promote FATF standards using modern multimedia technology. The Forum was an opportunity for of the system as a whole. offences for money laundering, applying a risk-orientated approach Representatives of the Centre representatives of both the private EAG countries will also have the introduced the product as part of the and public sector from countries opportunity to summarize their to banking organizations, as well as experience of countries in the meeting. The E-course is available on in the Eurasian region to discuss experience in applying the risk-based the EAG and ITMCFM sites. developments in the AML/CFT/FP approach through supervisory bodies, Eurasian region and the World sphere. as well as financial and non-financial Bank in conducting national risk The main recommendation to EAG assessment. A presentation on new member states at the end of the At the Consultative Forum, the institutions and give a presentation on national risk assessment at financial service technologies and Forum was to carry out intensive FATF Secretariat Administrator their associated ML/FT risks given by work on raising awareness of the Valerie Schilling presented the new the Eurasian Group’s workshop in November this year in India. Mr. Srinivas from the Reserve Bank revised standards. The developments FATF Recommendations which were of India was of notable interest. and experience shared will make adopted by the FATF in February 2012. The FATF Secretariat is The Eurasian Group plans to work on the process of implementing the Key changes include: strengthened currently developing an evaluation FATF requirements in the national requirements on customer due methodology to comply with the clarifying the latest Recommendations among EAG member states. To this AML/CFT systems of the Eurasian diligence, beneficial ownership and revised standards, which will include Group much simpler.

Recent events

CIS experts agreed on the The Executive Committee of the the national level should be executed Iran, Kazakhstan, China, Kyrgyzstan, draft concept of cooperation Commonwealth was charged to by the competent authorities of the Pakistan, Russia, USA, Tajikistan, provide the materials of the session countries of the Commonwealth. Turkmenistan, Turkey, Uzbekistan in combating crimes of the expert group to the states and and France. committed through the use the Council of Ministers of Internal Meeting in the framework Issues of terrorist links with illicit of information technologies Affairs of the CIS countries, and also to submit the draft concept for of the project of the General drug trafficking, terrorism financing the consideration of the Council of secretariat of Interpol on from illicit drug trafficking, as well Heads of States. as counteraction to radical religious combating terrorism was held groups and their supporters abroad The project is aimed at the in Kazakhstan were discussed during the meeting. expansion and strengthening of cooperation of the CIS states in International terrorism and drug combating crimes committed through trafficking are closely linked with each the use of information technologies. other. They threaten the entire world The project is a basis for development community. In this regard, countries of programs and plans of joint actions. facing such threats need to cooperate On July 25-26 2012 experts from It defines the principles, objectives, to effectively combat these phenomena. basic directions, forms, system of the countries of the Commonwealth А number of resolutions were taken agreed on the draft concept of cooperation support. According to the concept financial and logistical at the meeting, including the necessity cooperation in combating crimes for more active use of data banks and committed through the use of support of cooperation will be carried out in the order and on the conditions An operative meeting of the WAn technical resources of the General information technologies in the CIS operative meeting of the Working Secretariat of Interpol, increasing the Executive Committee in Minsk. determined by the CIS member states. Training and retraining of personnel will group in the framework of the project intensity of the exchange of proactive The document was finalized and be carried out on the basis of bilateral of the General Secretariat of Interpol operational information, conducting agreed upon in the light of comments and multilateral agreements. Control on combating terrorism «Kalkan» took operational relevant inspections and of Armenia, Kyrgyzstan, Russia, and over execution of the decisions made place in Astana (Kazakhstan). The taking necessary measures in respect Ukraine received at the headquarters in the framework of the concept at event was attended by representatives of the persons involved in terrorist of the CIS. of Afghanistan, Azerbaijan, India, acts and illegal drug trafficking.

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