INTERNATIONAL INITIATIVES TO PREVENT MONEY LAUNDERING (ML)

& TERRORIST FINANCING (TF)

A glimpse of various international organizations, their initiatives relating to AML & CFT,
documents and instruments that have been developed for AML & CFT purposes are as follows:

THE UNITED NATIONS

The United Nations (UN) was the first international organization to undertake significant action to
fight against money laundering on worldwide basis. The role of the UN is important for several
reasons, which are as follows:
 The UN actively operates a program to fight money laundering; the Global Program
against Money Laundering, headquartered in Vienna, Austria, is part of the UN Office of
Drugs and Crime (UNODC).
 The UN has the ability to adopt international treaties or conventions that obligate the
ratifying countries to reflect those treaties or conventions in their local laws.
In certain cases, the UN Security Council has the authority to bind all member countries through
a Security Council Resolution, regardless of other actions on the part of an individual country.

The Vienna Convention

Due to growing concern about the increased international drug trafficking and the tremendous
amount of related money entering into financial system, the UN adopted the United Nations
Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (1988) known
as The Vienna Convention, named after the city in which it was signed. The Vienna Convention
deals primarily with provisions to fight the illicit drug trade and related law enforcement issues. At
present, nearly 191 countries including Bangladesh are party to the convention. The convention
came into force on November 11, 1990.

The Palermo Convention

In order to fight against internationally organized crimes, the UN adopted the International
Convention against Transnational Organized Crime (2000), named after the city in which it was
signed as Palermo Convention. The Palermo Convention specifically obligates each ratifying
country to criminalize money laundering, establish regulatory regimes, authorize the cooperation
and exchange of information and thus promote international cooperation. This convention came

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into force from 29th September 2003, having been signed by 147 countries. Number of party to
the convention is 190 countries.

International Convention for the Suppression of the Financing of Terrorism

The financing of terrorism was an international concern prior to the attacks on the United States
on 11 September, 2001. In response to this concern, the UN adopted the International
Convention for the Suppression of the Financing of Terrorism (1999). The convention came into
force on April 10, 2002. The convention requires ratifying states to criminalize terrorism, terrorist
organizations and terrorist acts. Under the convention, it is unlawful for any person to provide or
collect funds with the (i) intent that the funds be used for, or (ii) knowledge that the funds be used
to, carry out any of the acts of terrorism defined in the other specified conventions that are
annexed to this convention. Sanctions against which bank should create a compliance program:
 UNSCRs 1267 and its successor resolutions including UNSCR 2178;
 UNSCRs 1373 and its successors resolutions including UNSCRs 2178
 UNSCRs 1540
 UNSCRs 1718
 UNSCRs 1737 and its successor’s resolutions including UNSCRs 2231.

THE FINANCIAL ACTION TASK FORCE

The Financial Action Task Force on Money Laundering (FATF), formed by G-7 countries in 1989,
is an inter-governmental body whose purpose is to develop and promote an international
response to combat money laundering. In October, 2001, FATF expanded its mission to include
combating the financing of terrorism. FATF is a policy-making body, which brings together legal,
financial and law enforcement experts to achieve national legislation and regulatory AML and CFT
reforms. FATF consists of thirty-seven member jurisdictions and two regional organizations. The
FATF also works in close co-operation with a number of international and regional bodies involved
in combating money laundering and terrorism financing.

Primary Function of FATF

 Monitoring members’ progress in implementing AML measures.
 Reviewing and reporting on laundering trends, techniques, and countermeasures.
 Promoting the adoption and implementation of FATF AML standards globally.

FATF Recommendations
 The latest revision of 40 FATF recommendations by FATF plenary was in February 2012.

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 The key changes to the FATF standards included in the 2012 revised version are as follows:
 Requirement for countries to undertake a national risk assessment
 Measures relating to proliferation financing
 Addition of tax crimes as predicate offences to money laundering
 Measures relating to domestic politically exposed persons
 Requirement for countries to ratify the UN Convention against Corruption.

Mutual Evaluation (Monitoring Members Progress)

Monitoring the progress of members to comply with the requirements of FATF recommendations
is facilitated by a two-stage process:
a) Assessing Technical Compliance with the FATF Recommendations, and
b) Effectiveness of AML/CFT Systems.
In the mutual evaluation stage, each member country is examined and assessed by experts from
other member countries every five years. The first Mutual Evaluation (ME) of Bangladesh was
conducted by a joint team of World Bank and International Monetary Fund in October, 2002 and
the report thereof was adopted by the APG in September, 2003. The 2nd Mutual Evaluation (ME)
of Bangladesh was conducted by an APG team in August, 2008 and the 3rd Mutual Evaluation
(ME) of Bangladesh was conducted by an APG team in October, 2015.

The Non-cooperative Countries and Territories (NCCT)

FATF adopted a process of identifying and black listing non-compliant countries and jurisdictions
that served as obstacles to international cooperation in implementing its recommendations and
place them on a publicly available list.

High-risk jurisdictions: (Same as before)

 Iran
 Democratic People’s Republic of Korea’s
For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions
to apply enhanced due diligence, and in the most serious cases, countries are called upon to
apply counter-measures to protect the international financial system from the ongoing ML/TF/PF
risks emanating from the country. This list is often externally referred to as the “black list”.

Jurisdictions under Increased Monitoring: (As of February 24, 2023)

Democratic
Albania Mali Philippines Tanzania
Republic of Congo

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 Barbados Gibraltar Mozambique Senegal Türkiye
Burkina Faso Haiti Nigeria South Africa Uganda
United Arab
Cayman Islands Jamaica Panama South Sudan
Emirates
Jordan Syria Yemen

International Cooperation and Review Group (ICRG)

The FATF has set up the International Co-operation Review Group (ICRG) as a process that is
designed to notably engage those jurisdictions which are ‘unwilling’ and pose a real risk to the
international financial system. The ICRG process is designed to bind members of FATF and FATF
Style Regional Bodies (FSRBs) that show effective commitment to the standards against those
that evade their international obligations.

FATF Guidance on Digital Identity

In March 2020, the FATF published Guidance on Digital Identity. This guidance aims to support
supervisors and help the private sector improve the effectiveness and efficiency of customer due
diligence measures by helping them determine whether a digital ID is suitable to establish a
customer’s identity.

Digital Transformation of AML/CFT for Operational Agencies

In October 2021, the FATF and the Egmont Group of Financial Intelligence Units completed a
project to explore how financial intelligence units can leverage technology to strengthen their
operations. This report focuses on how to find the right tools and when to use them, how to
optimize these tools for AML/CFT purposes, and how to overcome practical and operational
challenges.

Guidance on Proliferation Financing Risk Assessment and Mitigation

The FATF recently revised its Standards (R.1 and INR.1) to require countries, financial
institutions, designated non-financial businesses and professions (DNFBPs) and virtual asset
service providers (VASPs) to identify, assess, understand and mitigate their proliferation financing
risks. The FATF Guidance on Proliferation Financing Risk Assessment and Mitigation will help
countries, financial institutions, DNFBPs and VASPs effectively implement these new FATF
requirements, introduced in October 2020.

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FATF-Style Regional Bodies
1. Asia/Pacific Group on Money Laundering (APG) - based in Sydney, Australia;
2. Caribbean Financial Action Task Force (CFATF) - based in Port of Spain, Trinidad and
Tobago;
3. Eurasian Group (EAG) - based in Moscow, Russia;
4. Eastern & Southern Africa Anti-Money Laundering Group (ESAAMLG) - based in Dar es
Salaam, Tanzania;
5. Central Africa Anti-Money Laundering Group (GABAC) - based in Libreville, Gabon;
6. Latin America Anti-Money Laundering Group (GAFILAT) - based in Buenos Aires, Argentina;
7. West Africa Money Laundering Group (GIABA) - based in Dakar, Senegal;
8. Middle East and North Africa Financial Action Task Force (MENAFATF) - based in Manama,
Bahrain;
9. Council of Europe Anti-Money Laundering Group (MONEYVAL) - based in Strasbourg,
France (Council of Europe).

Risk-Based Supervision
Preventing money laundering or terrorist financing is more effective in protecting communities
from harm than pursuing prosecution after the crime has occurred. Supervisors play a crucial role
in preventing criminals or terrorists from moving funds through the financial system. In March,
2021, the FATF published Risk-Based Supervision guidance to help supervisors assess risks in
the sectors they oversee and adapt their resources to the areas where the risks are highest. The
FATF’s assessments demonstrate that transitioning from rules-based supervision to risk-based
supervision takes time and can be challenging. It requires a change in supervisory culture.

Virtual Assets
Crypto currency or virtual assets are rapidly gaining in popularity, edging closer to mainstream
adoption. The FATF has seen cases of money laundering and terrorist financing using virtual
assets. In September 2020, the FATF finalized a report on Virtual Assets: Red flag indicators of
Money Laundering and Terrorist Financing that will help private sector detect and report
suspicious transactions using virtual assets. It highlighted the most important red flag indicators
that could suggest criminal behavior. This report will also help financial intelligence units, law
enforcement agencies, prosecutors and regulators analyze suspicious transaction reports or
monitor compliance with anti-money laundering and counterterrorist financing controls.

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ASIA PACIFIC GROUP ON MONEY LAUNDERING (APG)
 An inter-governmental organization
 Established in 1997
 41 jurisdictional members, making it the largest FATF-style regional body (FSRB) in the world.
 In addition, 11 members of the APG are also members of the Financial Action Task Force,
namely: Australia, Canada, India, People's Republic of China, Hong Kong, Japan, Korea,
Malaysia, New Zealand, Singapore and the United States.

 Primary Functions of APG:

 Mutual evaluations: The APG assesses the levels of compliance by its member
jurisdictions with the global AML/CFT standards through a mutual evaluation (peer review)
program;
 Technical assistance and training: The APG Secretariat coordinates bi-lateral and donor-
agency technical assistance and training in the Asia/Pacific region for its member
jurisdictions in order to improve compliance with the global standards;
 Typologies research: Research and analysis into money laundering and terrorist financing
methods and trends is a key function of the APG to assist policy and law makers as well
as law enforcement agencies and the general public to identify and respond to new and
emerging trends, methods, risks and vulnerabilities;
 Global engagement: The APG contributes to international AML/CFT policy
development and actively engages with the global network of FSRBs.
 Private sector engagement: The APG actively engages with financial and non-financial
institutions, NPOs, training centres and universities in the Asia-Pacific to better inform the
general public and specialists about global issues relating to money laundering, terrorist
financing and proliferation financing.
The APG also assists its members to establish national coordination mechanisms to better utilize
resources to combat money laundering and terrorist financing.

THE EGMONT GROUP OF FINANCIAL INTELLIGENCE UNITS

 Established in 1995
 An informal network of 166 financial intelligence units (FIUs).
 Provides platform for the secure exchange of expertise and financial intelligence
 Primary Functions of Egmont Group:
 Expanding and systematizing cooperation in the reciprocal exchange of information.

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  Increasing the effectiveness of FIUs by offering training and promoting personnel
exchanges
 Fostering better and secure communication among FIUs through Egmont Secure Web
(ESW).
 Promoting the operational autonomy of FIUs.
 Promoting the establishment of FIUs in conjunction with jurisdictions with an AML/CFT
program in place.
Bangladesh got the membership of prestigious Egmont Group in July, 2013.

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