AMLCFT Issues in Tajikistan

1
AML/CFT Issues in Tajikistan

• Cari Votava
• World Bank / UNODC AML/CFT Mentor
• Senior Financial Sector Specialist
• 11World Bank Central Asia Regional Office
• 41 Kazybek bi Street, Building A
• Almaty, Kazakhstan 050100
• tel [phone] fax [phone]
• email cvotava_at_worldbank.org

2
AML/CFT Risks in Tajikistan

• Major drug-trafficking route
• Economy financial sector growing
• Weak governance financial sector supervision
• Large informal market sector cash-based
  economy
  
• Surrounding countries implementing AML/CFT
  systems
  

3
Costs of money laundering terrorism

• States that dont fight corruption money
  laundering, are allowing these resources to be
  used to support these crimes.
  
• Financial economic stability
• Human security
• Uneven playing field for honest businesses
• Increased costs of doing business
• Promotes corruption
• Lowers tax base
• Undermines social welfare cost burden paid by poor

4
International Obligations of Tajikistan

• UN SC Resolutions 1267 1373, et al.
• UN Conv. Against Trafficking of Narcotics
  Psychotropic Substances, 1988
  
• UN Convention for Suppression of Terrorist
  Financing, 1999
  
• UN Convention Against Transnational Organized
  Crime, 2000
  
• UN Anti-Corruption Convention

5
International Best PracticesFATF 40 9
Recommendations

• Properly criminalize ML/TF offenses (legal
  definitions dissuasive penalties)
  
• Create operationalize financial intelligence
  unit (FIU)
  
• Preventative measures
• Suspicious transaction reporting obligations FIU
  (CDD/KYC, etc)
  
• Supervisory oversight of compliance, sanction
  non-compliance
  
• Legislative measures to allow
• wide X-border legal assistance to facilitate
  investigations, seizures, arrests and
  prosecutions
  
• Sufficient domestic inter-agency cooperation
• National AML/CFT strategic plan with clear goals
  system for on-going evaluation improvement
  
• Egmont membership

6
International AML/CFT Structures

• FATF FATF-Style Regional Bodies
• support implementation of international AML/CFT
  standards
  
• conduct Mutual AML/CFT Evaluations
• typologies research
• Eurasian Group EAG (created Nov. 2004)
• Chair Russia Deputy Chair Kyrgyzstan
• Working Groups
• Legal Mutual Evaluation process issues (1st
  round 2007)
  
• Technical Assistance Donor Coordination
  Training
  
• Typologies Publications training on
  trends/methods
  
• Evaluator Training 2006
• Russian AML/CFT Training Methodological Center
• Annual Public-Private Sector Dialogue Meeting
• Annual Donor Coordination Meetings
• Egmont Group

7
Technical Assistance Needs Assessments

• World Bank UNODC/Mentor (Jan. 2005)
• EAG (Nov. 2005)
• EBRD / IMF (Nov. 2006)

8
UNODC AML/CFT Mentors
9
World Bank/UNODC AML/CFT Mentor Program in
Central Asia

• Role Function of FIU Workshops
• Monthly full-day training sessions on technical
  implementation KG, KZ UZ (2005-2006)
  
• Support advise EAG on all training programs
• Participate in all EAG TA Needs Assessments
• Donor Coordination
• Coordinate all training with EAG
• Monthly AML/CFT Newsletter (email)
• Quarterly AML/CFT Donor Meetings (KZ)

10
Technical Assistance programs (2004 2006)

• Legislative drafting assistance (multiple
  donors)
  
• EBRD/SECO/EU AML Workshop, Dushanbe (Sept.
  2005)
  
• ------------------------------------------
• EAG Eval. Training, Moscow (Dec. 2005, Mar,
  2006 June 2006)
  
• EAG Training for FIU staff, Moscow (March 2006)
• UNODC/UNDP/OSCE Intl Cooperation in Criminal
  Cases, Ashgabad, (March 2006)
  
• AML/CFT Judges Training Judges, Almaty, (May
  2006)
  
• IMF Seminar Terrorist Financing, Italy (May
  2006)
  
• EAG AML/CFT Workshop, St. Petersburg (May 2006)
• EAG Working Group Mtg., Issyk Kul (Aug. 2006)
• EBRD AML Workshop, Bishkek (Oct 2006)
• EAG AML/CFT Private Sector Mtg., Moscow (Dec.
  2006)
  
• EAG Donor Working Group Mtgs., Moscow (Dec.
  2006)
  

11
Challenges

• Impetus for AML/CFT lacking at political level
• Resources
• Dissipation of technical assistance and training
• Counterpart official or authority (Min Income
  Revenues?)
  
• Inter-agency coordination requires direction and
  delegation of authority of government
  
• Legal framework intention for current draft law
  ?
  
• Action plans for AML/CFT efforts in 2007

12
Opportunities

• High donor interest due to AML/CFT risks
• AML/CFT is field of global mutual learning
• AML/CFT effectiveness sharing info knowledge
  transfer vital
  
• No shortage of
• Various AML/CFT implementation models
• FIU types
• Russian-speaking experts
• Willingness to share expertise
• Global chain only as strong as its weakest
  link
  

13
AML/CFT systems exist in

• Russia
• Ukraine
• Georgia
• Baltics
• Central Europe
• Balkans

14
AML/CFT Concerns

• Weak banking sector
• Perceived trust in financial sector low
• Potential harm to banking sector
• Misuse of FIU confidential financial data

15
Recommendations

• Clear indication of political will or desire to
  implement AML/CFT framework
  
• Workshop on Role Function of FIU
• One-year action plan
• Clearly delegated roles responsibilities
• Designate official responsible for monitoring,
  evaluation, on-going improvement
  
• Delegate official with sufficient capacity, time
  and resources
  
• Commission Inter-Agency Work Group to carry out
  Action Plan
  

16
Recommendations - 2

• Draft send TA wish list Donors EAG
• Use AML/CFT Evaluation Report to revise Action
  Plan Wish List
  
• Finalize AML/CFT draft law send to Parliament
  for enactment
  
• Consider institutional location of FIU and to
  whom it will report
  
• Continue regular donor coordination to avoid
  further waste of donor resources

17
acronyms

• AML anti-money laundering
• CFT countering the financing of terrorism
• UN United Nations
• FATF Financial Action Task Force Against Money
  Laundering
  
• ML/TF money laundering/terrorist financing
• FIU financial intelligence unit
• EAG Euroasian Group (FATF-Style Regional Body)
• UNODC UN Office for Drugs and Crime
• TA Technical Assistance
• EBRD European Bank for Reconstruction
  Development
  
• SECO
• IMF International Monetary Fund

18
Thank you for your attention

• Cari Votava
• World Bank / UNODC AML/CFT Mentor
• Senior Financial Sector Specialist
• 1818World Bank Central Asia Regional Office
• 41 Kazybek bi Street, Building A
• Almaty, Kazakhstan 050100
• tel [phone] fax [phone]
• email cvotava_at_worldbank.org