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All money laundering and financial crimes countries/jurisdictions.

Afghanistan

Afghanistan's formal financial system is expanding rapidly while its traditional informal financial system remains significant in reach and scale. Afghanistan currently is experiencing massive outflows of currency to foreign countries--capital flight--which threatens its long-term financial stability and security. Hundreds of millions of dollars are transported out of the country through a variety means on an annual basis. At the same time, terrorist and insurgent financing, money laundering, cash smuggling, and other activities designed to finance organized criminal activity continue to pose a serious threat to the security and development of Afghanistan. Afghanistan remains a major drug trafficking and drug producing country and the illicit narcotics trade is the primary source of laundered funds. Despite ongoing efforts by the international community to build the capacity of Afghan police and customs forces, Afghanistan does not have the capacity at this time to consistently uncover and disrupt sophisticated financial crimes, in part because of few resources, limited capacity, little expertise and insufficient political will to seriously combat financial crimes. The most fundamental obstacles continue to be legal, cultural and historical factors that conflict with more Western-style proposed reforms to the financial sector. Public corruption is also a significant problem. Afghanistan ranks 179 out of 180 countries in Transparency International's 2009 Corruption Perception Index.

Offshore Center: No

Free Trade Zones:

No information available.

Criminalizes narcotics money laundering: Yes

Narcotics-related money laundering constitutes an offense under Article 3 of the Anti-Money Laundering and Proceeds of Crime Law No. 840 (AML Law). Afghanistan does not have explicit legislation criminalizing narcotics money laundering.

Criminalizes other money laundering, including terrorism-related: Yes

Afghanistan has criminalized money laundering under the AML Law, which is broadly-written, encompassing the laundering of proceeds of virtually any criminal offense. A predicate money laundering offense, as defined by the AML Law, means "any criminal offence, even if committed abroad, enabling its perpetrator to obtain proceeds." Article 3 of the AML Law criminalizes money laundering according to a list of actions which constitute an offense whether they are committed within Afghanistan or in another jurisdiction.

Criminalizes terrorist financing: Yes

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/s/ct/rls/crt/)

Terrorist financing has been criminalized under the Law on the Combating the Financing of Terrorism No. 839 (CFT Law).

Know-your-customer rules: Yes

Articles 9-13 of the AML Law deal with rules regarding KYC policies. These articles cover responsibilities for covered institutions on acquiring and verifying customer identification (both natural and legal persons), due diligence measures for politically exposed persons, occasional customers, the identification of customers in a series of related transactions, special monitoring of transactions, and consequences for failure to identify customers.

Bank records retention: Yes

Article 14 of the AML Law covers record keeping requirements for all covered institutions, including the maintenance of both domestic and international transactions for at least five years. Additionally, reporting entities are required to keep customer identification data for at least five years after the business relationship has ended.

Suspicious transaction reporting: Yes

Article 16 of the AML Law sets forth the legal requirements for covered institutions to report suspicious transactions. A reporting entity must submit a report when it suspects that any transaction (including an attempted transaction) is derived from the commission of an offense, or funds are to be used or linked to terrorism, terrorist groups or terrorist acts. Suspicious transaction reports (STRs) are submitted to the Financial Transactions and Reports Analysis Center of Afghanistan (FinTRACA), the financial intelligence unit (FIU) of Afghanistan.

Large currency transaction reporting: Yes

Under Article 15 of the AML Law reporting entities forward large cash transaction reports to FinTRACA. In 2008, approximately 22,000-25,000 large cash transaction reports were received. The FIU currently has approximately 500,000 large currency transaction reports in a secure database that can be searched using a number of criteria.

Narcotics asset seizure and forfeiture: Yes

The AML Law contains provisions authorizing the temporary freezing of accounts and transactions; the seizure of funds and property associated with a predicate offense of money laundering; and, the confiscation of such assets upon conviction of an offense of actual or attempted money laundering. In addition, the Afghan Counter Narcotics (CN) Law No. 875 (CN Law) provides for the forfeiture of assets acquired directly or indirectly from the commission of a narcotics offense under the CN Law. Assets directly or indirectly used, or intended to be used, in the commission of a CN offense also are subject to forfeiture. If assets subject to an order of forfeiture are unavailable, other assets of an equivalent value may be forfeited.

Narcotics asset sharing authority: Yes

Article 56 of the AML law provides for the disposal of confiscated funds and property per the request of foreign authorities. Afghanistan may conclude agreements with foreign countries to institutionalize the process or execute asset sharing on a case-by-case basis. Requests for confiscation apply to funds and proceeds--including corresponding value--or instrumentalities of an offense under AML Law.

Cross-border currency transportation requirements: Yes

Customs and FinTRACA require incoming and outgoing passengers to fill out declaration forms when carrying cash or negotiable bearer instruments in an amount more than 1 million Afghanis (approximately $20,900) under Article 6 of the AML Law. There is no restriction on transporting any amount of declared currency. Customs is required to submit to FinTRACA all declaration forms once per month and notify FinTRACA five days after a seizure. If a passenger is found carrying undeclared cash or bearer instruments above the threshold, the money is seized and will be forfeited to the state pending conviction.

Cooperation with foreign governments:

The AML Law's chapters on "International Cooperation," "Extradition," and "Provisions common to requests for mutual assistance and requests for extradition" may be used in money laundering and terrorist financing cases. These chapters, and more specifically, Articles 51-73, outline the requirements and procedures for making requests for mutual assistance and extradition in connection with offenses under both the AML Law and the CFT Law.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

Money laundering and terrorist finance investigations in Afghanistan have been hampered by a lack of capacity, awareness, and political commitment. Corruption permeates all levels of Afghan government and society and directly impacts the lack of financial crimes enforcement.

Border security continues to be a major issue throughout Afghanistan. In 2008 there were 14 official border crossings that came under central government control, utilizing international assistance as well as local and international forces. However, many of the border areas are under policed or not policed at all. These areas are therefore susceptible to illicit cross-border trafficking, trade-based money laundering, and bulk cash smuggling. Furthermore, officials estimate there are over 1,000 unofficial border crossings along Afghanistan's porous border. Customs authorities, with the help of outside assistance, have made important improvements, but much work remains to be done.

Currently, only 3% of the Afghan community is banked. Afghanistan is widely served by the traditional and deeply entrenched hawala system, which provides a range of financial and non-financial business services in local, regional, and international markets. It is estimated that between 80 percent and 90 percent of all financial transfers in Afghanistan are made through hawala. Financial activities include foreign exchange transactions, funds transfers (particularly to and from neighboring countries with weak regulatory regimes for informal remittance systems), micro and trade finance, as well as some deposit-taking activities. Although the hawala system and formal financial sector are distinct, the two systems have links. Hawala dealers often keep accounts at banks and use wire transfer services, while banks will occasionally use hawaladars to transmit funds to hard-to-reach areas within Afghanistan. There are some 300 known hawala dealers in Kabul, with branches or additional dealers in each of the 34 provinces. There are approximately 1,500 dealers spread throughout Afghanistan that vary in size and reach. Given how widely used the hawala system is in Afghanistan, financial crimes--including terrorist financing--undoubtedly occur through these entities. However, no STRs have been submitted by money service provider (MSPs), including licensed hawaladars. This needs to be addressed immediately, while continuing to license the remaining 50%-60% of MSPs still operating outside the formal sector.

U.S.-related currency transactions:

There is a significant amount of U.S. currency in Afghanistan that is used in both the licit and illicit economies. Each week, the Afghan Central Bank auctions millions of U.S. dollars to influence the Afghan money supply. In 2008 alone, the Central Bank auctioned more than $1.2 billion to banks, money service providers, and individuals.

Records exchange mechanism with U.S.: Yes

The Afghan government has no formal extradition or mutual legal assistance arrangements with the United States. In the absence of a formal bilateral agreement between Afghanistan and the United States, requests for extradition and mutual legal assistance have been processed on an ad hoc basis, largely with the assistance of the Afghan Attorney General's Office. The 2005 Afghan Counter Narcotics law, however, allows the extradition of drug offenders under the 1988 UN Drug Convention.

FinTRACA and the Financial Crimes Enforcement Network (FinCEN), the FIU of the United States, have an exchange of letters outlining the procedure for information sharing between their respective units.

International agreements:

FinTRACA is a signatory to a number of information exchange agreements with other FIUs. FinTRACA is not a member of the Egmont Group.

Afghanistan is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the Convention against Corruption--Yes

Afghanistan is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial Action Task Force (FATF)-style regional body. The APG plans to conduct its first mutual evaluation of Afghanistan in the first quarter of 2010. Afghanistan is also an observer of the Eurasian Group on combating money laundering and financing of terrorism (EAG), a FATF-style regional body.

Recommendations:

The Government of the Islamic Republic of Afghanistan (GOA) has made progress over the past year in developing its overall anti-money laundering/counter-terrorist financing (AML/CFT) regime. Recent improvement includes encouraging steps at the FIU, an increase in the reporting of large cash transactions, active participation in international AML bodies, continued work to improve AML compliance awareness among Afghan banks, and development and integration of information technology systems. However, Afghanistan must commit additional resources and find the political will to aggressively combat financial crimes, including corruption. Increasing the capacity of the authorities to conduct onsite AML/CFT supervision of both the formal and informal banking sectors must be a priority. Specifically, the GOA must develop, staff, and fund a concerted effort to bring hawaladars into compliance in Kabul and other major areas of commerce. Afghanistan should also continue efforts to develop the investigative capabilities of law enforcement authorities in various areas of financial crimes, particularly money laundering and terrorist financing. Judicial authorities must also become proficient in understanding the various elements required for money laundering prosecutions. The FIU should become autonomous and increase its staff and resources. Afghan customs authorities should learn to recognize forms of trade-based money laundering. Border enforcement should be a priority, both to enhance scarce revenue and to disrupt narcotics trafficking and illicit value transfer.

Albania

Albania is not considered an important regional financial or offshore center. Albania continues to be a source country for human trafficking. As a transit country for trafficking in narcotics, arms, contraband, and humans, Albania remains at significant risk for money laundering. The major sources of criminal proceeds in the country are trafficking offenses, official corruption, and fraud. Corruption and organized crime are likely the most significant sources of money laundering, but the exact extent to which these activities contribute to overall crime proceeds and money laundering is unknown. Organized crime groups use Albania as a base of operations for conducting criminal activities in other countries and often return their illicit gains to Albania. Because of its high level of consumer imports and weak customs controls, Albania has a significant black market for certain smuggled goods such as tobacco, jewelry, and mobile phones.

Because Albania's economy, particularly the private sector, remains largely cash-based, the proceeds from illicit activities are easily laundered in Albania. Albanian customs authorities report that organized criminal elements launder their illegal proceeds by smuggling bulk cash into and out of Albania by using international trade and fraudulent practices through import/export businesses. Criminals frequently invest tainted money in real estate and business development projects. According to the Bank of Albania (BOA), 24 percent of the money in circulation is outside of the banking system. A significant portion of remittances enters the country through unofficial channels. It is estimated only half of total remittances enter Albania through banks or money transfer companies. The BOA estimates that in 2008, remittances comprised nearly 9.3 percent of Albania's annual gross domestic product (GDP). Albania has made limited progress in its fight against organized crime and money laundering.

Offshore Center:

No information available.

Free Trade Zones:

Although current law permits free trade zones, none are currently in operation.

Criminalizes narcotics money laundering: Yes

Albania criminalizes money laundering through Article 287 of the Albanian Criminal Code of 1995, as amended.

Criminalizes other money laundering, including terrorism-related: Yes

In June 2003, Parliament approved Law No. 9084, which improves the Criminal Code and the Criminal Procedure Code, redefines the legal concept of money laundering, revises its definition to harmonize it with international standards, outlaws the establishment of anonymous accounts, and permits the confiscation of accounts. Albania's law sets forth an "all crimes" definition for the offense of money laundering; however, Albanian courts require a conviction for the predicate offense before issuing an indictment for money laundering.

Criminalizes terrorist financing: Yes

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/s/ct/rls/crt/)

Article 230/a of the Penal Code criminalizes terrorist financing. In 2007, the GOA amended its penal code to include a more specific definition for terrorist organizations. In addition, actions for terrorist purposes were identified and Albania's jurisdiction in terrorist financing cases was extended to include both resident and nonresident foreign citizens.

Know-your-customer rules: Yes

Law No. 9084 mandates the identification of beneficial owners and places reporting requirements on both financial institutions and individuals. Law No. 9917, "On Money Laundering and Terrorist Financing" (AML Law) entered into force in September 2008. The anti-money laundering law AML Law strengthens customer due diligence (CDD) requirements by reducing to ALL 1,500,000 (approximately $15,000) the transaction threshold at which institutions are required to obtain the identification of customers, mandating that covered institutions maintain on-going due diligence of clients, and establishing the requirement to perform enhanced due diligence on a risk sensitive basis. The AML Law also defines "client" to include any natural or legal person that is party to a business relationship, and mandates that CDD measures apply in transactions where terrorist financing is suspected. The law also increases the number of reporting entities.

Bank records retention:

Article 16 of the AML Law requires entities to store the documentation of a transaction and that used for the identification of the client and the client's beneficiary owner for five years from the date of termination of the business relation with the client.

Suspicious transaction reporting: Yes

Covered institutions are required to report transactions that involve suspicious activity, regardless of amount, to Albania's financial intelligence unit (FIU).

Large currency transaction reporting: Yes

The AML Law lowers the reporting threshold for cash transactions from $20,000 to $15,000.

Narcotics asset seizure and forfeiture:

Law No. 9284, the "anti-mafia law," enables civil asset sequestration and confiscation provisions in cases involving organized crime and trafficking. The law applies to the assets of suspected persons, their families, and close associates and places the burden on the defendant to prove a legitimate source of income to support the volume of owned assets. During the first ten months of 2009, the Serious Crimes Prosecution Office rendered 18 sequestration and confiscation decisions pursuant to the anti-mafia law. The properties sequestered include one site of 1,060 sqm and 36 bank accounts with approximately $5 million.

In 2004, Albania enacted Law No. 9258, "On Measures against Terrorist Financing." This law provides a mechanism for the sequestration and confiscation of assets belonging to terrorist financiers, particularly with regard to the UN lists of designees. While comprehensive, it lacks implementing regulations and thus is not fully in force. As of September 2009, the GOA claimed to maintain asset freezes against two individuals and ten foundations and companies from the UN Security Council's list of identified terrorist financiers. During the third quarter of 2009, the Ministry of Finance issued eight orders to sequester bank accounts of euro 388,901 belonging to terrorist financiers. In total, the Agency for the Administration of the Sequestration and Confiscation of Assets (AASCA) has $14.8 million in assets seized under the "Law on the Prevention and Fight Against Financing of Terrorism".

Narcotics asset sharing authority:

No information available.

Cross-border currency transportation requirements:

Individuals must report to customs authorities all cross-border transactions that exceed approximately $10,000. Reportedly, Albania provides declaration forms at border crossing points but only to those individuals who voluntarily make a declaration that would require completing the form.

Cooperation with foreign governments (including refusals):

No information available.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

Individuals and entities reporting suspicious transactions are protected by law if they cooperate with and provide financial information to the FIU and law enforcement agencies. Reportedly, however, leaks of financial disclosure information from other agencies have compromised client confidentiality. Since 2007, the FIU has referred to the Prosecutors Office 87 cases of both money laundering and terrorist financing, 59 of which were reported during the first nine months of 2008. One case of money laundering has been prosecuted, and currently two cases are ready to be sent to the court. However, prosecution was declined for the rest. In January 2008, the first terrorist financing criminal case began against a Jordanian citizen accused of concealing funds allegedly intended to finance terrorism. This case is still pending.

Although regulations also cover nonbank financial institutions, enforcement remains poor in practice.

Customs controls on cross-border transactions lack effectiveness due to a lack of resources, poor training and, reportedly, corruption of customs officials.

AASCA was created in 2004, and is charged with the responsibility of administering confiscated assets. So far the agency has failed to function in a meaningful fashion, although recent pressure from U.S. government officials has prompted it to perform better.

U.S.-related currency transactions:

No information available.

Records exchange mechanism with U.S.:

No information available.

International agreements:

The FIU has signed memoranda of understanding with 32 countries, Kosovo and Argentina being the most recent. The FIU is in process of signing MOUs with its counterparts in Italy, Russia and Canada.

Albania is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

Albania is a member of the Council of Europe's Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Albania_en.asp Recommendations:

Although there are continuing initiatives to improve Albania's capacity to deal with financial crimes and money laundering, the lack of positive results and apparent inability to adequately address program deficiencies continue to hamper progress. In addition, although the current AML Law was adopted in May 2008, it is difficult to evaluate the effectiveness of the measures as implementing regulations have not yet been passed. The Government of Albania (GOA) must provide the competent authorities adequate resources to administer and enforce the anti-money laundering/counter-terrorist financing (AML/CFT) measures included in the May 2008 law. Albania also should incorporate into AML legislation specific provisions regarding negligent money laundering, corporate criminal liability, comprehensive customer identification procedures, and the adequate oversight of money remitters and charities. The GOA should remove the requirement of a conviction for a predicate offense before a conviction for money laundering can be obtained. The FIU, police and prosecutors should enhance their effectiveness through improved cooperation with one another and outreach to other entities. The FIU should take steps to achieve effective analysis of the large volume of currency transaction reports and STRs received. The GOA should enact its draft law on FIU operations and promulgate implementing regulations for all applicable laws as soon as possible. Albania should ensure those charged with pursuing financial crime increase their technical knowledge to include modern financial investigation techniques. The GOA should provide its police force with the means to adequately maintain and retrieve its case files and records. The link between criminal intelligence and investigations remains weak as there is a lack of coordination between the prosecutors and the police. Investigators and prosecutors should implement case management techniques, and prosecutors and judges need to become more conversant with the nuances of money laundering. The GOA should devise implementing regulations for Law 9258 regarding sequestration and confiscation of assets linked to terrorist financing so that it can be fully effective. Albania also should improve the enforcement and enlarge the scope of its asset seizure and forfeiture regime, including fully funding and supporting the AASCA.

Algeria

The extent of money laundering through formal financial institutions in Algeria is thought to be minimal due to stringent exchange control regulations and an antiquated banking sector. The partial convertibility of the Algerian dinar enables the Banque Nationale Algerienne (Algeria's central bank) to monitor all international financial operations carried out by public and private banking institutions. Notable criminal activity includes trafficking, particularly of drugs and cigarettes, but also arms; kidnapping; theft, particularly of vehicles; extortion; and embezzlement. Public corruption remains a major concern as does terrorism. Algerian authorities are increasingly concerned with cases of customs fraud and trade-based money laundering. Other risk areas for financial crimes include unregulated alternative remittance and currency exchange systems; tax evasion; abuse of real estate transactions; commercial invoice fraud; and a cash-based economy. Most money laundering is believed to occur primarily outside the formal financial system, given the large percentage of financial transactions occurring in the informal gray and black economies. Al-Qaida in the Islamic Maghreb (AQIM), which originated in Algeria, has a history of terrorist activities in Algiers and elsewhere in the country, including suicide attacks, kidnappings for ransom, roadside bomb attacks, and assassinations.

Offshore Center: No

Free Trade Zones: No

Criminalizes narcotics money laundering: Yes

Criminalizes other money laundering, including terrorism-related: Yes

All crimes qualify as predicates for money laundering. In February 2005, Algeria enacted Law No. 05.01, Prevention and Combating of Money Laundering and the Financing of Terrorism (hereinafter Preventative AML/CFT Law). Article 3 of the Preventative AML/CFT Law incorporates by reference Penal Code provisions on terrorism and prohibits the financing of all conduct described by those provisions.

Criminalizes terrorist financing: Yes

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/s/ct/rls/crt/)

Penal Code, Section 4 bis, Article 87 bis 4 references Ordinance No. 95-11 and makes the financing of terrorism punishable by imprisonment and subject to a fine.

Know-your-customer rules: Yes

Articles 7-9 of the Preventative AML/CFT Law require customer identification and verification, including in trustee and beneficial ownership circumstances, by "banks, financial establishments and other related financial institutions." In cases where a transaction is of unusual or unwarranted complexity or without economic justification or lawful objective, information on the origin and destination of the funds as well as the aim of the transaction, and identity of "the economic operators" must be obtained.

Bank records retention: Yes

Article 14 of the Preventative AML/CFT Law requires "banks, financial establishments and other related financial institutions" to maintain customer identification information for five years after closing the account or terminating the business relationship and five years after the execution of a transaction.

Suspicious transaction reporting: Yes

Articles 19 and 20 of the Preventative AML/CFT Law require reporting of suspicious transactions to the Cellule du Traitement du Renseignement Financier (CTRF) (the Algerian financial intelligence unit (FIU)). This obligation applies not only to banks and financial institutions, but also to a number of other institutions and businesses to include the post office, insurance companies, gaming establishments, investment houses, attorneys and notaries, accountants, real estate agents, customs agents, and dealers of gems, precious metals, antiques and artwork. Article 21 places a similar obligation on customs and tax agencies. The CTRF transfers files to the prosecutors when its analysis upholds the conclusion of suspected money laundering or terrorist financing. The CTRF reports receipt of 508 suspicious transaction reports (STRs) since 2005; with 260 of the 508 received in 2009. Of this total, two have been referred to the Ministry of Justice (MOJ) for prosecution, with one referral resulting in a prosecution.

Large currency transaction reporting: No

However, Executive Decree 05-442, issued in 2005, prohibits cash transactions exceeding 50,000 Algerian dinars (approximately $713), requiring that they be made by check, credit card, wire transfer or other specified methods that are traceable.

Narcotics asset seizure and forfeiture:

Asset seizure provisions are included in Penal Procedure Code; Preventative AML/CFT Law; and respective laws governing the tax and customs authorities. The Preventative AML/CFT Law provides authority to the CTRF to freeze bank transactions strongly presumed to be connected to money laundering or terrorist financing for a maximum period of 72 hours absent an extension based on a judicial decision. The Penal Code includes provisions for confiscation of assets of natural persons and legal entities.

Narcotics asset sharing authority:

No information available.

Cross-border currency transportation requirements:

Article 19 of Regulation No. 07-01 permits travelers to import bank notes and traveler's checks subject to a declaration requirement for amounts in excess of a threshold yet to be established by the Bank of Algeria. As a matter of practice, Algerian authorities interpret the provision as requiring declaration of all amounts. Records of declared amounts in excess of the equivalent of $5,000 are electronically available, including to the CTRF. Ordinance 96-22 prescribes punishments including for failure to declare and false declarations to include confiscation, fines and imprisonment. Travelers departing Algeria may export bank notes and travelers checks subject to certain conditions. In the case of non-residents, the amount exported cannot exceed the amount declared upon entry minus amounts used while in-country. Currency export by residents is strictly controlled in the formal sector and is limited to an amount fixed by the Bank of Algeria, presently approximately $10,200. Exceptions for residents exist for amounts covered by "currency exchange authorizations" established to address particular circumstances (e.g., travel abroad for the Hadj, business, health, education purposes).

Cooperation with foreign governments:

The Algerian Banking Commission, the CTRF, and the Algerian judiciary have wide latitude to exchange information with their foreign counterparts in the course of money laundering and terrorist financing investigations. A clause excludes the sharing of information with foreign governments in the event legal proceedings are already underway in Algeria against the suspected entity, or if the information is deemed too sensitive for national security reasons.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

Algerian authorities are taking steps to coordinate information sharing between concerned agencies. In 2008, the Ministry of Justice established a specialized cadre of investigators, prosecutors and judges who are being trained in the investigation and prosecution of financial crimes.

U.S.-related currency transactions:

There appears to be no connection between illegal drug sales in the U.S. and currency transactions in Algeria.

Records exchange mechanism with U.S.:

No information available.

International agreements:

Algeria is a signatory to various UN, Arab, and African conventions against terrorism, trafficking in persons, and organized crime. The CTRF is not a member of the Egmont Group.

Algeria is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

In November 2004, Algeria became a member of the Middle East and North Africa Financial Action Task Force (MENAFATF), a Financial Action Task Force-style regional body. Algeria underwent a mutual evaluation in December 2009; once finalized, it will be found here: http://www.menafatf.org/TopicList.asp?cType=train

Recommendations:

The Government of Algeria has taken many steps to enhance its statutory regime against money laundering and terrorist financing. It needs to move forward to implement those laws and eliminate bureaucratic barriers among various government agencies. The CTRF should be the focal point for anti-money laundering/counter-terrorist financing (AML/CFT) suspicious transaction report analysis and information exchange, which would require the CTRF to develop in-house analytical and information technology capabilities. The CTRF should continue outreach to the formal and informal financial sectors and continue efforts to adhere to international standards. In addition, given the scope of Algeria's informal economy, new efforts should be made to identify value transfer mechanisms not covered in Algeria's AML/CFT legal and regulatory framework. Algerian law enforcement and customs authorities should enhance their ability to investigate trade-based money laundering, value transfer, and bulk cash smuggling used for financing terrorism and other illicit financial activities.

Andorra

Andorra has a well developed financial infrastructure. In 2009, the Organization for Economic Co-operation and Development (OECD) designated and subsequently delisted Andorra as a tax haven due to its low or nonexistent taxes and maintains that Andorra still needs to make its banking system more transparent.

Offshore Center: Yes

No additional information available.

Free Trade Zones: No

Criminalizes narcotics money laundering: Yes

Criminalizes other money laundering, including terrorism-related: Yes

Andorra substantially revised its anti-money laundering regime in December 2000 with the passage of its Law on International Criminal Co-operation and the Fight against the Laundering of Money and Securities Deriving from International Delinquency (December 2000 Act). Subsequent amendments to the Andorran Criminal Code extend the predicate offenses for money laundering to all serious offenses that are punishable by a prison term of at least six months. Tax evasion is not a crime in Andorra.

Criminalizes terrorist financing: Yes

In 2008, Andorra ratified the UN Convention for the Suppression of the Financing of Terrorism. The implementation of the Convention led to a separate offense of terrorism financing within the Andorra Criminal Code--Article 366 bis.

Know-your-customer rules: Yes

Banks and other financial institutions are required to know, record, and report the identity of customers engaging in significant transactions. Customer identification, including identification of the beneficial owner, is required at the time a business relationship is established and before any applicable transaction.

Bank records retention: Yes

Banks and other reporting entities are required to keep records of obligated transactions for five years. Records verifying customer identity must be kept for a period of at least ten years from the date when the business relationship ends.

Suspicious transaction reporting: Yes

The December 2000 Act imposes reporting obligations upon Andorran financial institutions, insurance and re-insurance companies, and natural persons or entities whose professions or business activities involve the movement of money or securities that may be susceptible to laundering. It specifically covers external accountants and tax advisors, real estate agents, notaries, and other legal professionals when they are acting in certain professional capacities, as well as casinos and dealers in precious stones and metals. Obligated entities must report suspicious transactions regardless of the amount involved. Reports of suspicious transactions (STRs) are made to the Unit for the Prevention of Laundering Operations (UPB), Andorra's financial intelligence unit (FIU).

Large currency transaction reporting: Yes

Currency transaction reports must be forwarded to the UPB for any cash transactions over euros 30,000

(approximately $41,000).

Narcotics asset seizure and forfeiture: Yes

Substitute assets can be seized. In 2008, $48,915 was frozen, seized, and/or forfeited. Narcotics asset sharing authority:

The Government of Andorra (GOA) has signed asset sharing agreements with France, Spain, and Switzerland.

Cross-border currency transportation requirements: Yes

Mandatory declaration forms are used at the borders.

Cooperation with foreign governments:

No impediments to cooperation are known to exist.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

In 2008, there were 26 investigations for suspicion operations; no figures are available for 2009.

The GOA has circulated to its financial institutions the list of individuals and entities included on the UN 1267 sanctions committee's consolidated list

U.S.-related currency transactions:

No currency transactions involving international narcotics trafficking proceeds that include significant amounts of U.S. currency or currency derived from illegal drug sales in the United States are believed to occur in Andorra.

Records exchange mechanism with U.S.:

The UPB is able to exchange information with the Financial Crimes Enforcement Network.

International agreements:

The UPB has signed cooperation agreements with the FIUs of Spain, France, Belgium, Portugal, Luxembourg, Monaco, Poland, Netherlands Antilles, Bahamas, Thailand, Albania, Mexico, Panama and Peru.

Andorra is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--No

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--No

Andorra is a member of MONEYVAL, a Financial Action Task Force-style regional body. Its most recent mutual evaluation report can be found here: http://www.coe.int/t/dghl/monitoring/moneyval/Countries/Andorra_en.asp

Recommendations:

Andorra should continue to improve its anti-money laundering/counter-terrorist financing counter-measures. The Government of Andorra should become a party to the UN Conventions against Corruption and Transnational Organized Crime.

Angola

Angola is neither a regional nor an offshore financial center and has not prosecuted any known cases of money laundering. Angola does not produce significant quantities of drugs, although it continues to be a transit point for drug trafficking, particularly cocaine brought in from Brazil or South Africa destined for Europe. The laundering of funds derived from continuous and widespread high-level corruption is a concern, as is the use of diamonds as a vehicle for money laundering. The Government of the Republic of Angola (GRA) has implemented a diamond control system in accordance with the Kimberley Process. However, corruption and Angola's long and porous borders further facilitate smuggling and the laundering of diamonds.

Angola currently has no comprehensive laws, regulations, or other procedures to detect money laundering and financial crimes. Efforts to combat money laundering and terrorist financing are hampered by a very significant lack of capacity resulting from decades of civil war. The various ministries with responsibility for detection and enforcement are revising a draft anti-money laundering law. Angolan banks have few, but growing, linkages to the international financial system.

Offshore Center: No

Free Trade Zones: No

Criminalizes narcotics money laundering: Yes

Angola's counter-narcotics laws criminalize money laundering related to narcotics trafficking.

Criminalizes other money laundering, including terrorism-related: No

Angola currently has no comprehensive laws, regulations, or other procedures to detect money laundering and financial crimes, although provisions of the criminal code do address some related crimes.

Criminalizes terrorist financing: No

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/s/ct/rls/crt/)

Angola currently has no comprehensive laws or regulations covering terrorist financing. Angola has not signed the UN International Convention for the Suppression of the Financing of Terrorism.

Know-your-customer rules: No

The Central Bank's Supervision Division, which has responsibility for money laundering issues, exercises some authority to detect and suppress illicit banking activities under legislation governing foreign exchange controls. The Central Bank has limited capacity to conduct customer due diligence compliance investigations. It is inadequately staffed and trained.

Bank records retention: No

Banks are required to maintain records of significant transactions, though it not known for how long they are required to keep the records.

Suspicious transaction reporting: No

The Central Bank has no workable data management system and only rudimentary analytic capability. The Central Bank falls under the Ministry of Finance and does not have operational or budgetary independence.

There is a financial intelligence unit (FIU) but its basic function is to ensure that Angola's banking regulations are being adhered to by commercial banks. It appears to be more of an administrative body rather than analytic. It is not focused on money laundering or terrorist financing to any significant degree. The FIU has authority to investigate commercial banks. Statistics of suspicious transaction reports (STRs) are unknown. The banking system is ill-equipped to detect and report suspicious activity.

Large currency transaction reporting: No

Narcotics asset seizure and forfeiture: Yes

The GRA can seize narcotics-related assets under its counter-narcotics laws. The Central Bank has the authority to freeze assets, but Angola does not presently have an effective system for identifying, tracing, or seizing assets.

Narcotics asset sharing authority: No

Cross-border currency transportation requirements: Yes

Angolan currency (kwanza) cannot be taken out of Angola. The law limits individuals to bringing no more than $15,000 in currency into or out of the country. However, the restrictions are based on foreign exchange controls and are not meant to combat international money laundering. Travelers boarding international flights are asked to declare the amount of currency they are carrying and are subject to physical search. Cash in excess of this amount is confiscated and the traveler is given a receipt, with which he can appeal to the GRA for return of the cash based on justification for carrying currency out of the country. The GRA requires declaration forms, but foregoes the use of them when they run out of printed forms.

Cash declaration reports are not entered into databases. Information technology infrastructure within government entities is very limited.

Cooperation with foreign governments:

Although there is a lack of capacity throughout relevant government ministries, there are no known instances of refusal to cooperate with other governments against money laundering and terror finance.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

The Ministry of Justice is responsible for investigating financial crimes. The level of competence and staffing is unknown, but believed to be low. There were no known arrests, prosecutions, or convictions for money laundering or terrorist financing in 2009.

Diamonds are believed to be used in trade-based money laundering. In May 2009, the U.S. Department of the Treasury designated Kassim Tajideen as a supporter of the Hizballah terrorist organization. Kassim Tajideen is an important financial contributor to Hizballah who operates a network of businesses in Lebanon and Africa. In 2003, Tajideen was arrested in Belgium in connection with fraud, money laundering, and diamond smuggling. Kassim is chairman of Luanda-based Golfrate Holdings (Angola) Lda, which is Angola's leading producer and distributor of essential consumer goods, providing up to 60 percent of Angola's imported food stuffs.

U.S.-related currency transactions:

Angola is effectively dollarized--nearly all businesses, formal and informal, readily accept U.S. dollars. In 2009, the Governor of the Central Bank announced steps to require the payment of all debts to be carried out in kwanzas--the Angolan currency. In 2008, it was reported the local banking system imports approximately $200-300 million in currency per month, largely in dollars, without a corresponding cash outflow. Local bank representatives have reported that clients have walked into banks with up to $2 million in a briefcase to make a deposit.

Records exchange mechanism with U.S.:

There is no agreement with the U.S. on exchange of records relating to financial crimes or other investigations. Exchange of records for investigations is done on a case-by-case basis.

International agreements:

Angola is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--No

* the UN Convention against Transnational Organized Crime--No

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

Recommendations:

The Government of Angola (GRA) should pass its pending legislation to criminalize money laundering beyond drug offenses. The GRA should enact legislation that adheres to international standards to establish a system of financial transparency reporting requirements and a corresponding financial intelligence unit. The GRA should then move quickly to implement this legislation and bolster the capacity of law enforcement to investigate financial crimes. Angola's judiciary, including its Audit Court (Tribunal de Contas) should give priority to prosecuting financial crimes, including corruption. The GRA should become a party to both the UN Convention against Transnational Organized Crime and the UN International Convention for the Suppression of the Financing of Terrorism. The GRA should increase efforts to combat official corruption, by establishing an effective system to identify, trace, seize, and forfeit assets and by empowering investigative magistrates to actively seek out and prosecute high profile cases of corruption.

Antigua and Barbuda

Antigua and Barbuda has comprehensive legislation in place to regulate its financial sector, but remains susceptible to money laundering due to its offshore financial sector and Internet gaming industry. As of 2008, Antigua and Barbuda had eight domestic banks, seven credit unions, seven money transmitters, 18 offshore banks, two trusts, three offshore insurance companies, 2,967 international business corporations (IBCs), and 20 licensed Internet gaming companies. Noted money laundering problems in Antigua and Barbuda appear to be generated by schemes involving investment fraud and advance fee fraud. Drug-related matters have concerned not only narcotics but other controlled pharmaceutical substances being illicitly distributed over the Internet.

Offshore Center: Yes

The International Business Corporations Act of 1982 (IBCA), as amended, is the governing legal framework for offshore businesses in Antigua and Barbuda. Offshore financial institutions are exempt from corporate income tax. All licensed institutions are required to have a physical presence, which means presence of at least a full-time senior officer and availability of all files and records. Shell companies are not permitted.

Free Trade Zones: Yes

The Antigua and Barbuda Free Trade and Processing Zone was established by an Act of Parliament in 1994, based on the legal foundation enacted twelve years earlier, which set guidelines for the establishment of IBCs in Antigua and Barbuda. The Zone is administered by a Commission, empowered by the Free Trade and Processing Zone Act No. 12 of 1994, to function as a private enterprise.

Criminalizes narcotics money laundering: Yes

The Money Laundering Prevention Act of 1996 (MLPA), as amended, is the cornerstone of Antigua and Barbuda's anti-money laundering legislation. The MLPA makes it an offense for any person to obtain, conceal, retain, manage, or invest illicit proceeds or bring such proceeds into Antigua and Barbuda if that person knows or has reason to suspect that they are derived directly or indirectly from any unlawful activity.

Criminalizes other money laundering, including terrorism-related: Yes

The Proceeds of Crime Act (Amendment) (POCA) entered into force on December 30, 2009. This regulation mandates that all serious offenses (defined as all offenses which carry a penalty of one year or more imprisonment) are specified activities for money laundering.

Criminalizes terrorist financing: Yes

The Government of Antigua and Barbuda (GOAB) enacted the Prevention of Terrorism Act 2001 (PTA), amended in 2005, to implement the UN conventions on terrorism. The GOAB amended the PTA in 2008 to provide the Supervisory Authority and the Office of National Drug and Money Laundering Control Policy (ONDCP) the power to direct a financial institution to freeze property for up to seven days while the authority seeks a freeze order from the court.

Know-your-customer rules: Yes

Financial institutions must undertake full customer identification procedures under the following circumstances: a) formation of a business relationship; b) carrying out a one-time transaction of EC $25,000 (approximately $9,900) or more; c) carrying out one-time wire transfers; d) if there is any suspicion that a onetime transaction involves money laundering or terrorist financing. Internet gaming companies also are required to enforce know-your-customer verification procedures.

Bank records retention: Yes

Financial institutions are required to maintain records for six years after an account is closed. Internet gaming companies also are required to maintain records relating to all gaming and financial transactions of each customer for six years.

Suspicious transaction reporting: Yes

Reporting institutions include banks, offshore banks, IBCs, money transmitters, credit unions, building societies, trust businesses, casinos, Internet gaming companies, and sports betting companies. The MLPA requires reporting entities to report suspicious activity whether a transaction was completed or not. The Office of National Drug and Money Laundering Control Policy Act, 2003 (ONDCP Act) establishes the ONDCP as the financial intelligence unit (FIU) which receives and analyzes suspicious transaction reports.

Large currency transaction reporting:

There is no reporting threshold imposed on banks and financial institutions. Internet gaming companies, however, are required by the Interactive Gaming and Interactive Wagering Regulations to report to the ONDCP all payouts over $25,000.

Narcotics asset seizure and forfeiture:

Both the MLPA and the POCA provide for the forfeiture, freezing and seizing of the proceeds of crime. Legislative provisions in relation to the freezing of funds used for terrorist financing are to be found mainly in the PTA. The MLPA also provides specifically for civil forfeiture procedures. The definition of property in the MLPA does not expressly include income, profits or other benefits from the proceeds of crime. In the POCA, the definition of property is limited. However, the definition of 'proceeds of crime' includes benefits derived from unlawful activity and in this context the term can be said to cover income, profits and benefits. The term property is even more narrowly defined in the PTA. The Misuse of Drugs Act empowers the court to forfeit assets related to drug offenses. The ONDCP is responsible for tracing, seizing and freezing assets related to money laundering, and has the ability to direct a financial institution to freeze property for up to seven days, while it makes an application for a freeze order.

Narcotics asset sharing authority: Yes

The GOAB has entered into an asset sharing agreement with Canada and is currently working on asset sharing agreements with other jurisdictions, including the U.S. The director of ONDCP, with Cabinet approval, may enter into agreements and arrangements that cover matters relating to asset sharing with authorities of a foreign State. There are asset sharing agreements in place with some countries, while with others arrangements are negotiated on an ad hoc basis.

Cross-border currency transportation requirements: Yes

Under the MLPA, a person entering or leaving the country is required to report to the ONDCP whether he or she is carrying $10,000 or more. In addition, all travelers are required to fill out a customs declaration form indicating if they are carrying in excess of $10,000. If so, they may be subject to further questioning and possible search of their belongings by Customs officers.

Cooperation with foreign governments: Yes

The GOAB continues its bilateral and multilateral cooperation in various criminal and civil investigations and prosecutions.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

The ONDCP is the agency responsible for money laundering, terrorist financing and illegal drugs intelligence and investigations. The biggest challenge faced by the FIU is that the subjects of its money laundering investigations reside outside the jurisdiction, and therefore, conducting interviews may be difficult. There have been no investigations involving terrorist financing.

While a conviction for a predicate offense is not necessary for the initiation of money laundering proceedings, the majority of prosecutions are for predicate offenses only, and relatively few prosecutions have been brought under the MLPA. The reason for the latter may lie in the tripartite prosecutorial regime which permits prosecutions to be brought by the Director of Public Prosecutions (DPP), the Police Prosecuting Unit and the Supervisory Authority.

Because of Antigua and Barbuda's increased efforts to implement stricter standards to restrict the movement of value through the financial system, as well as to curb the physical, cross-border movement of illicit money, the use of trade-based money laundering methods has become a greater threat. The vulnerabilities of the international trade system to things such as over- and- under-invoicing of goods and services, over- and under-shipment of goods and services, and multiple invoicing of goods and services are a growing concern.

U.S.-related currency transactions:

Illicit proceeds from the transshipment of narcotics and from financial crimes occurring in the U.S. also are laundered in Antigua and Barbuda.

Records exchange mechanism with U.S.: Yes

In 1999, a Mutual Legal Assistance Treaty and an extradition treaty with the United States entered into force. The GOAB signed a Tax Information Exchange Agreement with the United States in December 2001.

International agreements:

The ONDCP has signed memoranda of understanding (MOUs) with its counterparts in Canada and Panama.

Antigua and Barbuda is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

Antigua and Barbuda is a member of the Caribbean Financial Action Task Force (CFATF), a Financial Action Task Force-style regional body. Its most recent mutual evaluation can be found here: http://www.cfatf-gafic.org/mutual-evaluation-reports.html

Recommendations:

The Government of Antigua and Barbuda (GOAB) should take steps to amend its legislation to cover intermediaries, enhanced due diligence for politically exposed persons (PEPs) and other high-risk customers, and to provide for enforceable provisions on the prohibition of correspondent accounts for or with shell banks. The GOAB also should implement and enforce all provisions of its anti-money laundering/counter-terrorist financing (AML/CFT) legislation, including the comprehensive supervision of its offshore sector and gaming industry. The ONDCP should be given direct access to financial institution records in order to effectively assess their AML/CFT compliance. Continued efforts should be made to enhance the capacity of law enforcement and customs authorities to recognize money laundering typologies that fall outside the formal financial sector, particularly trade-based money laundering. Continued international cooperation, particularly with regard to the timely sharing of statistics and information related to offshore institutions, and enforcement of foreign civil asset forfeiture orders will likewise enhance Antigua and Barbuda's ability to combat money laundering.

Argentina

Argentina is neither an important regional financial center nor an offshore financial center. Money laundering related to narcotics trafficking, corruption, contraband, and tax evasion is believed to occur throughout the financial system, in spite of the efforts of the Government of Argentina (GOA) to stop it. Transactions conducted through nonbank businesses and professions, such as the insurance industry, financial advisors, accountants, notaries, trusts, and companies, real or shell, remain viable mechanisms to launder illicit funds. Tax evasion is the most frequent predicate crime in Argentine money laundering investigations. Argentina has a long history of capital flight and tax evasion, and Argentines hold billions of dollars outside the formal financial system (both offshore and in-country), much of it legitimately earned money that was not taxed. To combat capital flight and encourage the return of these undeclared billions, the GOA approved a capital repatriation law offering a tax amnesty to persons who repatriated undeclared offshore assets during a six-month window from March 1 to August 31, 2009. The law prohibits tax authorities from investigating the provenance of declared funds. Critics raised concerns that this initiative could facilitate money laundering. When the GOA's financial intelligence unit (FIU), the UIF, promulgated implementing regulations in May 2009, it required financial institutions to file reports on suspicious transactions by participants in the program. The program yielded declarations of approximately $4.7 billion, a small fraction of assets held abroad, and much of the declared funds and assets were actually not repatriated but were simply a declaration of funds already in Argentina.

Offshore Center:

No information available.

Free Trade Zones:

No information available.

Criminalizes narcotics money laundering:

Money laundering was first criminalized in 1989 under Article 25 of Narcotics Law 23.737.

Criminalizes other money laundering, including terrorism-related:

Law 25.246 of May 2000 expands the predicate offenses for money laundering to include all crimes listed in the Penal Code. The law does not criminalize money laundering as an offense independent of the underlying crime or self laundering. Additionally, only transactions (or a series of related transactions) exceeding 50,000 pesos (approximately $13,000) constitute money laundering. Transactions below 50,000 pesos constitute concealment, a lesser offense.

Criminalizes terrorist financing:

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/s/ct/rls/crt/)

Law 26.268, "Illegal Terrorist Associations and Terrorism Financing," enacted in 2007, amends the Penal Code and Argentina's anti-money laundering law, Law No. 25.246, to criminalize acts of terrorism and terrorist financing, and establishes terrorist financing as a predicate offense for money laundering. To date, Argentine prosecutors have not filed charges under the statute.

Central Bank Circular B-6986 requires financial institutions to check transactions against the terrorist lists of the United Nations, United States, European Union, Great Britain, and Canada. No assets have been identified or frozen to date.

Know-your-customer rules: Yes

Law 25.246 requires customer identification.

UIF Resolution 137/2009 addressing repatriated funds under the tax amnesty program requires financial institutions to determine whether the taxpayer had the economic capacity to obtain the funds sent abroad, and accordingly, to determine the source of the funds.

Bank records retention: Yes

Obligated entities are required to maintain a database of information related to client transactions, including suspicious or unusual transaction reports, for at least five years.

Suspicious transaction reporting: Yes

Law 25.246 requires financial institutions to file suspicious transaction reports (STRs). Under UIF-issued resolutions obligated entities include the tax authority (AFIP), Customs, banks, currency exchange houses, casinos, securities dealers, insurance companies, postal money transmitters, accountants, notaries public, and dealers in art, antiques and precious metals. As of September 2009, according to its own statistics, the UIF had received 5,272 STRs since its inception in November 2002, and forwarded 738 suspected cases of money laundering to prosecutors for review.

Large currency transaction reporting: No

Narcotics asset seizure and forfeiture:

Argentina's Narcotics Law of 1989 authorizes the seizure of assets and profits. Argentine courts and law enforcement agencies have used the authority to seize and utilize assets on a selective and limited basis, although complex procedural requirements complicate authorities' ability to take full advantage of the asset seizure provisions.

Narcotics asset sharing authority:

No information available.

Cross-border currency transportation requirements: Yes

Resolutions 1172/2001 and 1176/2001, issued by the Argentine Customs Service in 2001, require declarations to be made by all individuals entering or departing Argentina with over $10,000 in currency or monetary instruments. The UIF receives copies of the declarations.

Cooperation with foreign governments (including refusals):

Argentina's financial secrecy restrictions on UIF access to large cash transactions could limit its ability to provide assistance in money laundering and terrorist financing investigations.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

Law 25.246 still limits the UIF's role to investigating only money laundering arising from seven specific or "predicate" crimes, including narcotics and arms trafficking and fraud in public administration.

Although Law 26.087 reduces restrictions that have prevented the UIF from obtaining information needed for money laundering investigations by granting greater access to STRs filed by banks, the law does not lift financial secrecy provisions on records of large cash transactions, which are maintained by banks when customers conduct a cash transaction exceeding 30,000 pesos (approximately $7,800).

There have been only two convictions for money laundering since it was first criminalized in 1989, and none since the passage of Law 25.246 in 2000.

Working with the USG, Argentina has established a Trade Transparency Unit (TTU). The TTU examines anomalies in trade data that could be indicative of customs fraud and international trade-based money laundering. One key focus of the TTU is financial crime occurring in the Tri-Border Area.

U.S.-related currency transactions:

No information available.

Records exchange mechanism with U.S.:

The GOA and the U.S. government have a Mutual Legal Assistance Treaty that entered into force in 1993, and an extradition treaty that entered into force in 2000.

International agreements:

Argentina participates in the "3 Plus 1" Security Group (formerly the Counter-Terrorism Dialogue) between the United States and the Tri-Border Area countries. The UIF has signed memoranda of understanding regarding the exchange of information with a number of other FIUs.

Argentina is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

Argentina is a member of the Organization of American States Inter-American Control Commission (OAS/CICAD) Group of Experts. Argentina is also a member of the Financial Action Task Force (FATF) and the Financial Action Task Force for South America (GAFISUD), a FATF-style regional body.

Recommendations:

With passage of counterterrorist financing legislation and strengthened mechanisms available under Laws 26.119, 26.087, 25.246, and 26.268, Argentina has the legal and regulatory capability to combat and prevent money laundering and terrorist financing. The national anti-money laundering/counter-terrorist financing agenda provides the structure for the Government of Argentina (GOA) to improve existing legislation and regulation, and enhance inter-agency coordination. The ongoing challenge is for Argentine law enforcement and regulatory agencies, and institutions to implement fully the National Agenda and enforce the newly strengthened and expanded legal, regulatory, and administrative measures available to them to combat financial crimes. The GOA should further improve its legal and regulatory structure by enacting legislation to expand the UIF's role to enable it to investigate money laundering arising from all crimes, rather than just seven enumerated crimes and to have access to all information and documentation necessary to conduct money laundering and terrorist financing investigations; establishing money laundering as an autonomous offense; and eliminating the current monetary threshold of 50,000 pesos (approximately $13,000) required to establish a money laundering offense. To comply fully with international standards on the regulation of bulk money transactions, Argentina should review policy options that are consistent with its MERCOSUR obligations. Other continuing priorities are the effective sanctioning of officials and institutions that fail to comply with the reporting requirements of the law, the pursuit of a training program for all levels of the criminal justice system, and the provision of the necessary resources to the UIF to carry out its mission.

Armenia

Armenia is a not a regional financial center and is not believed to be at major risk for money laundering and terrorist financing. However, governmental corruption, an organized crime presence and a large shadow economy make the country vulnerable. The major sources of laundered proceeds stem from tax evasion and fraudulent financial activity, particularly transactions with forged credit cards. Money laundering in Armenia generally takes place through the banking system, through informal remittances from Armenians living abroad, and through high-value transactions such as real estate purchases.

Offshore Center: No

Free Trade Zones: No

Criminalizes narcotics money laundering: Yes

Criminalizes other money laundering, including terrorism-related: Yes

Armenia's anti-money laundering regime is based on Article 190 of the Armenian Criminal Code, enacted in 1993, which criminalizes money laundering; and on the Law on Combating Money Laundering and Terrorism Financing (AML/CFT Law), adopted in December 2004 and revised in May 2008. Armenia uses a "list" approach for predicate offenses for money laundering. Amended Article 190 of the Criminal Code refers to 94 specific crimes listed elsewhere in the Code, e.g. kidnapping, embezzlement, drug trafficking, trafficking in persons, extortion, bribery, etc. These predicate offenses, necessary for a money laundering prosecution, are based on those stipulated by the Financial Action Task Force (FATF).

Criminalizes terrorist financing: Yes

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/s/ct/rls/crt/)

Armenia criminalized the financing of terrorism under amendments to the Criminal Code in December 2004.

Know-your-customer rules: Yes

Obligated entities are required to practice know-your-customer and due diligence procedures.

However, there appear to be no prohibitions on opening a business relationship through or using bearer bank records or other bearer securities.

Bank records retention: Yes

Under Article 15 of the AML/CFT Law, financial institutions must keep records for all completed or ongoing financial transactions for at least five years.

Suspicious transaction reporting: Yes

Revision to the AML/CFT Law in 2008 significantly expanded the range of "reporting entities" required to report suspicious transactions. The law now covers not only banks and non-bank financial institutions, but also exchange houses, casinos, real estate agents, dealers in precious metals and stones, lawyers, accountants, auditors, and trust companies, among others. All the obligated entities are required to file suspicious transaction reports (STRs) with the Financial Monitoring Center (FMC), Armenia's financial intelligence unit (FIU). The criminal code also requires the entities to inform law enforcement authorities about any detected criminal activity. During the first ten months of 2009, the FMC received 79 STRs. Three cases were subsequently referred to law enforcement authorities.

Large currency transaction reporting: Yes

Financial institutions must report to authorities currency transactions over 20 million Armenian drams (AMD) and real estate transactions over 50 million AMD (approximately $66,000 and $166,000 respectively.)

Narcotics asset seizure and forfeiture:

Under Armenia's Criminal Code, Criminal Procedure Code, and the AML/CFT Law, reporting entities and the CBA can freeze, investigators and prosecutors can seize, and courts can confiscate assets derived from or intended for criminal activity, including both illegal drug trafficking and terrorism. There is no civil forfeiture.

Narcotics asset sharing authority: No

No laws have been enacted to allow for asset sharing.

Cross-border currency transportation requirements:

Armenian law requires any currency export transaction exceeding five million Armenian drams (approximately $16,000) to be conducted strictly as a non-cash transfer. Currency exports below that threshold can be conducted in cash and do not have to be documented. There are no limitations for currency imports, but imports of cash over the equivalent of 15,000 euros (approximately $20,400) must be declared. Few currency declarations are actually filed.

Cooperation with foreign governments:

Armenia regularly cooperates with foreign jurisdictions on money laundering and financial crimes investigations.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

In 2009, Armenia achieved its first successful money laundering prosecution. A total of 22 money laundering cases were filed, out of which 17 were sent to court, two were suspended due to the lack of an identified suspect, and three remained in the preliminary investigation stage at the end of the year. Authorities obtained money laundering convictions against four defendants in three cases in 2009.

The list of individuals and entities included on the UN 1267 sanctions committee's consolidated list are regularly circulated to financial institutions.

U.S.-related currency transactions:

Armenian financial institutions are not engaged in transactions of international narcotics proceeds that derive from illegal drug sales in the United States or that otherwise significantly affect the United States.

Records exchange mechanism with U.S.:

The FMC cooperates with USG law enforcement agencies when requested. The FMC is able to exchange information with the Financial Crimes Enforcement Network.

International agreements:

Armenia is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

Armenia is a member of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL), a FATF-style regional body. Its most recent mutual evaluation report can be located here:

http://www.coe.int/t/dghl/monitoring/moneyval/Evaluations/ round3/MONEYVAL%282009%2925Rep-ARM3_en.pdf

Recommendations:

Armenia should continue its efforts to enhance its anti-money laundering/counter-terrorist financing regime and to successfully investigate and prosecute money laundering and terrorist financing. Armenia should prohibit bearer bank books and certificates of deposit or other bearer securities.

Aruba

Aruba is not considered a regional financial center. Money laundering in Aruba is primarily the result of foreign criminal activity pertaining to the proceeds from the illicit narcotics trade. Other sources of illicit proceeds include revenue from the falsification of documents. Of interest is the increase in money laundering cases over the past few years stemming from public corruption. Money laundering occurs mainly in the formal financial sector and to, a lesser extent, within the offshore financial center.

Offshore Center: Yes

Two offshore banks and four offshore insurance companies (captives) are licensed in Aruba. On February 5, 2009 the State Ordinance on the Supervision of Company Service Providers (SOSCSP) was enacted to bring the company service providers under supervision of the Central Bank of Aruba (CBA). One bank is a subsidiary of Citibank NA, with no physical presence in Aruba. The other bank is affiliated with a Venezuelan bank; its activities are restricted to the Venezuelan market. Offshore banks require a banking license from the CBA. Background checks are performed on applicants for a banking license; shareholders are tested on financial standing and reputation. Furthermore, in accordance with CBA's policy, the control of financial institutions may only be exercised by an international financial group subject to effective consolidated supervision.

Free Trade Zones: Yes

By law, Aruba has three free trade zones (FTZs), all under the management of Free Zone Aruba (FZA) NV (a government-owned limited liability company). The companies admitted to the FTZs conduct trade, light industrial and/or service activities, with the exception of financial services. The types of goods vary as well as the trading partners. All companies must have a physical presence in the FTZ, be active and--if foreign-owned and managed--have a local representative with sufficient authority to manage the business on a day-to-day basis. Also, all administration must be kept in Aruba. A preventive comprehensive anti-money laundering/counter-terrorist financing (AML/CFT) compliance system designed by FZA is in place.

Criminalizes narcotics money laundering: Yes

Money laundering is criminalized through articles 430b, 430c and 430d of the Criminal Code of Aruba (CrCA).

Criminalizes other money laundering, including terrorism-related: Yes

The predicate offenses for money laundering cover a broad range of offenses, including, but not limited to: participation in an organized criminal group and racketeering; terrorism, including terrorist financing; trafficking in persons and immigrant smuggling; sexual exploitation, including sexual exploitation of children; illicit trafficking in narcotic drugs and psychotropic substances; illicit arms trafficking; illicit trafficking in stolen and other goods; corruption and bribery; fraud; counterfeiting of currency; murder; grievous bodily injury; kidnapping; illegal restraint and hostage-taking; robbery; and theft. Aruba's money laundering laws do not cover proceeds generated from counterfeiting and piracy of products, insider trading and market manipulation, many types of environmental crimes and fraud.

Criminalizes terrorist financing: No

There is no separate offense for terrorist financing included in the CrCA. However, the present legal system does allow for the prosecution of terrorist financing under certain circumstances through reliance on ancillary offenses such as the preparation for, participation in, or complicity with a terrorist attack, or through being a member of a terrorist organization. Legislation has been drafted to provide for a separate terrorist financing offense.

Know-your-customer rules: Yes

The State Ordinance on the Identification when Providing Services (SOIPS) mandates and regulates the identification of clients when providing certain financial and non-financial services. Banks, life insurance companies, money transfer companies, lawyers, civil notaries, accountants, tax advisors, casinos, dealers in jewels and precious metals, realtors and high-worth dealers in art, antiques, vehicles, aircraft and ships are required to have proper identification, know your customer (KYC), and due diligence procedures in place.

Banks or other CBA-regulated financial institutions, except for trust company service providers, are allowed to issue bearer shares. However, all persons or entities holding 5% or more of the issued shares or voting rights must obtain prior written approval from the CBA for such shareholding. Thus, all persons or entities with such holdings are identified and subject to the fit and proper criteria laid down in the supervisory laws.

Bank records retention: Yes

Banks and other financial institutions are required to retain KYC data for at least five years after the termination of the customer relationship or after the execution of a transaction.

Suspicious transaction reporting: Yes

The State Ordinance on the Reporting of Unusual Transactions (SORUT) requires the same institutions subject to the SOIPS to report unusual transactions to the financial intelligence unit (FIU). Such transactions, whether executed or not, are to be reported if a transaction reaches a certain predetermined threshold, a certain predetermined service is requested, and if a transaction is suspected of involvement in money laundering and/or terrorist financing. Varying thresholds (AWG 20,000, 100,000 and 1,000,000) exist depending on the type of transaction. It should be noted that Aruba does not have a suspicious transactions reporting system, but a broader unusual transactions reporting (UTR) system. In the first ten months of 2009, a total of 5,298 UTRs were received. During the same period 24 investigations--totaling 272 transactions and 330 subjects--were disseminated to police and justice authorities. Three UTRs regarding terrorist financing have been received; no terrorist financing activity has been detected in Aruba.

Large currency transaction reporting: Yes See above.

Narcotics asset seizure and forfeiture: Yes

The provisions for seizing, freezing, and confiscating proceeds of crime are set out in various Articles of the CrCA and the Code of Criminal Procedure of Aruba (CCrPA). Both the CrCA and the CCrPA provide for the confiscation of laundered property, criminal proceeds, and instruments used or intended for use in the commission of offenses. They also provide for ancillary measures such as seizure and, freezing of assets. The confiscation provision permits the court to order confiscation following a criminal conviction. The CrCA provides that a defendant must either deliver the subject property or otherwise pay an amount equivalent to the property's value. However, Aruba's confiscation laws do not permit confiscation of assets derived indirectly from crime, or, with knowledge exceptions, of property in the names of third parties. A special confiscation procedure (using a civil standard of proof), which can occur within two years after conviction, permits the confiscation of substitute property.

The Ordinance on Sanctions 2006 (AB 2007 no. 24), to enhance the GOA's compliance with the requirements of UNSCRs 1267 and 1373 regarding the timely freezing of terrorist assets came into effect in 2007. The Ordinance was modified in February 2009 to extend its scope beyond banks to insurance companies, money transfer companies, and trust company service providers. However, although the CBA and FIU circulate the 1267 Sanctions Committee's; the EU's consolidated lists; and the list of Specially Designated Global Terrorists designated by the United States pursuant to Executive Order (E.O.) 13224, Aruba does not have an independent legal mechanism for freezing, without delay or a judicial order, terrorist assets.

Narcotics asset sharing authority: Yes

Asset sharing takes place as much as possible on a treaty basis or a reciprocity basis.

Cross-border currency transportation requirements: Yes

In 2003, Aruba enacted a State Ordinance on the Reporting of the import and export of money, making it a legal requirement to report to Customs Department officials at Aruban ports of entry the movement of currency in excess of AWG 20,000 (approximately $11,000) via harbor, airport, postal, and express courier mail services. The head of the FIU must confirm receipt of the reports.

Cooperation with foreign governments (including refusals):

The laws in Aruba concerning mutual legal assistance in AML/CFT investigations, prosecutions, and related proceedings are primarily set out in Articles 555 to 567 and 579 CCrPA. As part of the Kingdom of the Netherlands, Aruba is a party to a number of international conventions that include provisions permitting mutual legal assistance. The SORUT provides formal mechanisms to share information internationally with other FIUs.

Aruba cooperates with the Drug Enforcement Administration and other US authorities if so requested. For example, rights on two time share units in Aruba were frozen/confiscated based on a US court order. Aruba also assisted the Peruvian authorities and Belgian authorities in confiscating documents related to their respective investigations into fraud and money laundering.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

As of January 1, 2009, 20 money laundering cases have been registered at the public prosecutor's office. Fifteen of the cases are still under investigation or otherwise pending, four have been brought before the judge, and one case was settled.

U.S.-related currency transactions:

No information available.

Records exchange mechanism with U.S.:

Aruba has entered into a bilateral mutual legal assistance treaty (MLAT) with the United States. Other applicable agreements include the 1981 Treaty between the Kingdom of the Netherlands (KON) and the USG on mutual assistance in criminal matters; the 1992 Agreement between the KON and the USG regarding mutual cooperation in the tracing, freezing, seizure and forfeiture of proceeds and instrumentalities of crime and the sharing of forfeited assets; and the 2003 Tax Information Exchange Agreement (TIEA). The FIU is able to exchange information with FinCEN.

International agreements:

Aruba has entered into bilateral MLATs with Suriname, Canada, Australia, and Hong Kong. TIEAs have been signed with Spain, Denmark, Norway, Sweden, Finland, Iceland, Greenland, Faroe Islands, Bermuda, British Virgin Islands, Saint Kitts & Nevis, and Saint Vincent & Grenadines. TIEAs with Canada and Australia are awaiting signature and TIEA negotiations have been concluded with Belgium, Germany and France. The FIU has concluded memoranda of understanding (MOUs) with FIUs in the Kingdom of the Netherlands, Colombia, Belgium, Switzerland, Germany, Canada, Chile, Mexico, and Peru. More than ten additional MOUs are in process.

The Kingdom of the Netherlands, of which Aruba is a semi-autonomous constituent part, extended the application to Aruba of the 1988 UN Drug Convention in 1999, the UN International Convention for the Suppression of the Financing of Terrorism in 2005, and the UN Convention against Transnational Organized Crime in 2007. The Kingdom has not yet extended the application of the UN Convention against Corruption to Aruba.

Aruba is a member of the Caribbean Financial Action Task Force, a Financial Action Task Force-style regional body. Its most recent mutual evaluation can be found here: http://www.cfatf-gafic.org/downloadables/mer/ Aruba_3rd_Round_MER_%28Final%29_English.pdf

Recommendations:

The Government of Aruba (GOA) has shown a commitment to combating money laundering and terrorist financing by establishing an AML/CFT regime that is generally consistent with international standards. Aruba should take additional steps to immobilize bearer shares under its fiscal framework and to enact its long-pending ordinance addressing the supervision of trust companies. The GOA should ensure all obligated entities are fully complying with their AML/CFT reporting requirements. Aruba also should make every effort to pass the drafted legislation to criminalize terrorist financing as a separate offense.

Australia

Australia is one of the major capital markets in the Asia-Pacific region. In 2007-08, Australia had the fastest growing foreign exchange market in the Asia-Pacific and seventh largest market in terms of global turnover. The Australian dollar (A$) was the sixth most traded currency. The Australian Stock Exchange is the 12th largest stock exchange in the world and, as of December 2008, the market capitalization of shares of domestic companies on the Australian Stock Exchange (ASX) was approximately $700 billion, the fourth largest in the Asia-Pacific region. In terms of share capital freely available to investors, the ASX is the eighth largest in the world. Australia has the third highest number of listed domestic companies in the Asia-Pacific.

Offshore Center: No

Free Trade Zones: No

Criminalizes narcotics money laundering: Yes

Australia criminalized money laundering related to serious crimes with the enactment of the Proceeds of Crime Act (POCA) 1987.

Criminalizes other money laundering, including terrorism-related: Yes

The POCA 2002 repealed existing money laundering offenses and replaced them with updated offenses that have been inserted into the Criminal Code.

Criminalizes terrorist financing: Yes

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/s/ct/rls/crt/)

In June 2002, Australia passed the Suppression of the Financing of Terrorism Act 2002 (SFT Act). It criminalizes terrorist financing and substantially increases the penalties that apply when a person uses or deals with suspected terrorist assets that are subject to freezing. The Anti-Terrorism Act (No.2) 2005 (AT Act), which took effect on December 14, 2006, amends offenses related to the funding of a terrorist organization in the Criminal Code so that they also cover the collection of funds for or on behalf of a terrorist organization. The AT Act also inserts a new offense of financing a terrorist.

Know-your-customer rules: Yes

The Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CFT Act), as amended in April 2007, covers the financial sector, gaming sector, bullion dealers and any other professionals or businesses that provide particular "designated services." The Act imposes a number of obligations on entities, including customer due diligence, reporting obligations, and record keeping obligations. The AML/CFT Act will gradually replace the Financial Transaction Reports Act 1988 (FTR Act) which currently operates concurrently to the AML/CFT Act.

Bank records retention: Yes

Under provisions of the FTR Act, transaction records must be kept for at least seven years after the day the account is closed or the transaction takes place.

Suspicious transaction reporting: Yes

The FTR Act also establishes suspicious transaction reporting requirements for Australia's cash dealers. The SFT Act requires cash dealers to report suspected terrorist financing transactions to the Australian Transaction Reports and Analysis Centre (AUSTRAC), the Australian financial intelligence unit. During the 2008-09 Australian financial year, AUSTRAC received 43,565 suspicious transaction reports (STRs).

Large currency transaction reporting: Yes

The FTR Act establishes reporting requirements for Australia's cash dealers. Reporting requirements include cash transactions equal to or in excess of A$10,000 (approximately $9,200), and all international funds transfers into or out of Australia, regardless of value. The FTR Act reporting also applies to nonbank financial institutions, such as money exchangers, money remitters, stockbrokers, casinos and other gaming institutions, bookmakers, insurance companies, insurance intermediaries, finance companies, finance intermediaries, trustees or managers of unit trusts, issuers, sellers, and redeemers of travelers' checks, bullion sellers, and other financial services licensees. The FTR Act will continue to apply to entities who are not reporting entities under the AML/CFT Act. Solicitors (lawyers) are also required to report significant cash transactions. During the 2008-09 Australian financial year, AUSTRAC received 19,771,903 financial transaction reports.

Narcotics asset seizure and forfeiture:

The POCA 2002 enables the prosecutor to apply for the restraint and forfeiture of property from the proceeds of crime. The law further creates a national confiscated assets account from which, among other things, various law enforcement and crime prevention programs may be funded. The POCA 2002 (Consequential Amendments and Transitional Provisions) also provides for civil forfeiture of the proceeds of crime. The Australian Federal Police restrained A$37,831,143 (approximately $24,630,000) of which A$341,923 (approximately $6,082,000) was forfeited.

The POCA 2002 also enables freezing and confiscation of property used in, intended to be used in, or derived from, terrorism offenses. It is intended to implement obligations under the UN Convention for the Suppression of the Financing of Terrorism and resolutions of the UN Security Council relevant to the seizure of terrorism-related property.

Narcotics asset sharing authority: Yes

Under POCA 2002, recovered proceeds can be transferred to other governments through equitable sharing arrangements.

Cross-border currency transportation requirements: Yes

Australia has a system for reporting cross-border movements of currency above A$10,000. Cross-border movements of physical currency (CBM-PC) reports are primarily declared to the Australian Customs Service (ACS) by individuals when they enter or depart from Australia. This information is forwarded to AUSTRAC.

Cooperation with foreign governments (including refusals): Yes

No known impediments to cooperation with foreign governments.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues/comments:

Designated services provided by real estate agents, dealers in precious stones and metals, and specified legal, accounting, trust, and company services are not yet covered by reporting and record keeping requirements.

From July 2007 through mid-May 2008, the Commonwealth Director of Public Prosecutions reported that 68 indictments for money laundering were issued. The seven principles behind Australia's largest ever money laundering investigation were sentenced on December 17, 2009 to serve periods of imprisonment up to 12.5 years. They were charged with conspiring to launder up to A$68 million (approximately $62.5 million) of narcotics-related proceeds of crime. In all, 73 persons were charged and in excess of 50 convicted with money laundering and serious drug offenses.

U.S.-related currency transactions:

The US$-A$ is the fourth most traded currency pair.

Records exchange mechanism with U.S.:

In September 1999, a Mutual Legal Assistance Treaty between Australia and the United States entered into force. In January 1996, AUSTRAC and FinCEN signed a memorandum of understanding (MOU) to exchange information.

International agreements:

Australia is a party to various information exchange agreements with countries in addition to the United States. AUSTRAC has signed Exchange Instruments, mostly in the form of MOUs, allowing the exchange of financial intelligence the FIUs of 55 other countries.

Australia is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism:--Yes

* the UN Convention against Transnational Organized Crime:--Yes

* the 1988 UN Drug Convention:--Yes

* the UN Convention against Corruption:--Yes

Australia is a member of the Financial Action Task Force (FATF). It also serves as permanent co-chair, and hosts and funds the Secretariat of the Asia/Pacific Group on Money Laundering (APG), a FATF-style regional body. Australia's most recent mutual evaluation can be found here: http://www.apgml.org/documents/docs/17/Australia%20ME2.pdf

Recommendations:

The GOA continues to pursue a comprehensive anti-money laundering/counterterrorist financing regime. The GOA should continue to work toward a second tranche of AML/CFT reforms, which will extend regulatory obligations to designated services provided by real estate agents, dealers in precious stones and metals, and specified legal, accounting, trust and company services. The GOA should continue its exemplary leadership role in emphasizing money laundering/terrorist finance issues and trends within the Asia/Pacific region (now expanding into Africa), and its commitment to providing training and technical assistance to the jurisdictions in that region. Having significantly enhanced its focus on AML/CFT deterrence, the GOA should increase its efforts to prosecute and convict money launderers.

Austria

Austria is a major regional financial center; and Austrian banking groups control significant shares of the banking markets in Central, Eastern and Southeastern Europe. According to the Austrian National Bank, Austria ranks among those countries with the highest numbers of banks and bank branches per capita in the world, with 867 banks total and one bank branch for every 1,630 people. Money laundering occurs within the Austrian banking system as well as in non-bank financial institutions and businesses. The volume of undetected organized crime may be enormous, with much of it reportedly coming from the former Soviet Union. Money laundered by organized crime groups derives primarily from serious fraud, smuggling, corruption, narcotics trafficking, and trafficking in persons. Theft, drug trafficking and fraud are the main predicate crimes in Austria according to the statistics of convictions and investigations. Austria is considered by EUROPOL as one of the four main destination countries for human beings trafficking in the European Union (EU). Criminal groups use various instruments to launder money, including remittance services, informal money transfer systems such as hawala, and the Internet.

Offshore Center: No

Free Trade Zones: No

Criminalizes narcotics money laundering: Yes

In Austria, Article 165 of the StGB sets forth the offense of money laundering, which includes narcotics trafficking as a predicate offense for money laundering. The offense was established in 1993 and amended several times.

Criminalizes other money laundering, including terrorism-related: Yes

With the notable exception of counterfeiting and piracy of products, predicate offenses include terrorist financing, all serious crimes carrying a minimum sentence of three years imprisonment as well as listed misdemeanors. The law is stricter for money laundering by criminal organizations and terrorist "groupings". Self-laundering is not criminalized in Austria as Article 165 limits the scope of the ML offenses to assets derived from the crime of another person. Effective September 1, 2009, the Government of Austria (GOA) amended and defined more precisely the strict new criminal regulations against corruption, also a predicate offense for money laundering.

Criminalizes terrorist financing: Yes

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state. gov/s/ct/rls/crt/)

Austria criminalized terrorist "grouping," terrorist criminal activities, and financing of terrorism in 2002. The Criminal Code defines financing of terrorism as a separate criminal offense category, punishable in its own right. Terrorist financing is also included in the list of criminal offenses subject to domestic jurisdiction and punishment, regardless of the laws where the act occurred.

Know-your-customer rules: Yes

The Banking Act establishes customer identification and record keeping obligations for the financial sector. Entities subject to the Banking Act include banks, leasing and exchange businesses, safekeeping services, and portfolio advisers. The law requires financial institutions to identify all customers when beginning an ongoing business relationship. In addition, the Banking Act requires customer identification for all transactions of at least 15,000 Euros (approximately $21,150) for non-customers. Moreover, all transactions on passbook savings accounts of at least 15,000 Euros (approximately $21,150) require identification of all customers. Trustees of accounts must appear personally and disclose the identity of the account beneficiary. Banking Act regulations require institutions to determine the identity of beneficial owners and introduce risk-based customer analysis for all customers. Financial institutions require customer identification for all fund transfers of 1,000 Euros (approximately $1,400) or more.

Bank records retention: Yes

Austrian law requires financial institutions to retain identification documents for at least five years after the termination of the business relationship and documentation and records of all transactions for a period of at least five years after their execution.

Suspicious transaction reporting: Yes

All obligated entities must file a suspicious transaction report (STR) in all cases of "suspicion or probable reason to assume" that a transaction serves the purpose of money laundering or terrorist financing, or that a customer has violated his duty to disclose trustee relationships. STRs are filed with Austria's financial intelligence unit (FIU). By mid-November 2009, the FIU had received approximately 1,100 STRs.

Large currency transaction reporting: No

Narcotics asset seizure and forfeiture:

Since 1996, legislation has provided for asset seizure and the confiscation and forfeiture of illegal proceeds, however, in practice this does not seem to work effectively, given the low amounts thus far seized or forfeited/confiscated. Austria has regulations in the Code of Criminal Procedure that are similar to civil forfeiture in the U.S. In connection with money laundering, organized crime and terrorist financing, all assets are subject to seizure and forfeiture, including bank assets, other financial assets, cars, legitimate businesses, and real estate. Courts may freeze assets in the early stages of an investigation. In 2008, Austrian courts froze assets worth more than 12 million Euros (approximately $16,900,000) on interim injunctions.

Narcotics asset sharing authority:

Austria has not enacted legislation that provides for sharing forfeited narcotics-related assets with other governments. A bilateral U.S.-GOA agreement on sharing of forfeited assets is pending signature in both the U.S. and Austria.

Cross-border currency transportation requirements: Yes

The Customs Procedures Act and the Tax Crimes Act address cash couriers and international transportation of currency and monetary instruments from illicit sources. Austrian customs authorities do not automatically screen all persons entering Austria for cash or monetary instruments. However, to implement the EU regulation on controls of cash entering or leaving the EU, the GOA requires an oral or written declaration for cash amounts of 10,000 Euros (approximately $14,100) or more. This declaration, which includes information on source and use, must be provided when crossing an external EU border. Spot checks for currency at border crossings and on Austrian territory do occur. Customs officials have the authority to seize suspect cash, and will file a report with the FIU in cases of suspected money laundering.

Cooperation with foreign governments:

Austria may provide a range of measures of mutual assistance in AML/CFT investigations initiated by other countries. These measures may be granted on the basis of multilateral or bilateral agreements as well as, where no such agreement exists, on the basis of reciprocity.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

Reportedly, the most significant money laundering problems faced by Austria are money remittance systems, offshore business and hawala. Austrian authorities should try to improve enforcement to tackle these various and complex methods used by criminals to launder their funds.

Bearer shares are permitted in Austria for banks and for non-banks.

All customs declaration forms are stored in hard copy at separate customs offices throughout Austria and there is currently no central database where these reports can be stored and analyzed for potential criminal activity.

The number of convictions for drug trafficking, theft, smuggling, corruption and bribery decreased sharply since 2004. There were 18 money laundering convictions in 2007 and seven in 2008.

Austrian authorities distribute to all financial institutions the names of suspected terrorists and terrorist organizations listed on the UN 1267 Sanctions Committee's consolidated list, as well as the list of Specially Designated Global Terrorists that the United States has designated pursuant to Executive Order 13224, and those distributed by the EU to members. According to the Ministry of Justice and the FIU, no accounts found in Austria have shown any links to terrorist financing.

U.S.-related currency transactions:

No information available.

Records exchange mechanism with U.S.:

Austria exchanges information on criminal matters through its mutual legal assistance treaty (MLAT) with the United States, which entered into force August 1, 1998. Through the MLAT, the two countries are able to exchange financial intelligence and cooperate on a variety of money laundering and financial crimes matters. The Austrian FIU exchanges information regularly with the FIU of the United States, FinCEN.

International agreements:

Austria is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

Austria is a member of the Financial Action Task Force. Its most recent mutual evaluation can be found here:

http://www.fatf-gafi.org/dataoecd/22/50/44146250.pdf Recommendations:

The Government of Austria (GOA) should criminalize self-laundering. It should also ease legal restrictions to allow authorities to have access to information held by financial institutions and legal professionals. Similarly, it should extend the FIU's functions, allowing it access to appropriate records of other governmental bodies. Austria should also take steps to be sure customs declaration forms are available to the FIU and appropriate law enforcement agencies. The GOA should strengthen licensing requirements and sanctions for financial institutions. The GOA should widen the scope of customer diligence obligations and ensure adequate transparency of beneficial ownership of legal persons and legal arrangements, including the elimination of bearer shares.

Azerbaijan

At the crossroads of Europe and central Asia and with vast amounts of natural resources, Azerbaijan is a rapidly growing economy. Much of the international trade and foreign investments took place in the energy sector. All other sectors lag energy in growth and sophistication, to include the financial sector. As a result, Azerbaijan is neither an important financial center nor a major location where foreign entities look to conduct money laundering/terrorist financing transactions. The major source of criminal proceeds in Azerbaijan is from the endemic public corruption that occurs in all sectors and at all levels. As a transit country for the Afghan drug trade, Azerbaijani authorities suspect the illicit drug trade also generates a significant amount of illicit funds. Other generators of illicit funds include robbery, tax evasion, smuggling, trafficking, and organized crime. Money laundering likely occurs in the formal financial sector, non-bank financial systems, and alternative remittance systems. There is a significant black market for smuggled goods in Azerbaijan, which serves as a transit country for illicit goods.

Offshore Center: No

Free Trade Zones: No

Criminalizes narcotics money laundering: Yes

In 2002, the GOAJ passed "Legalization of Money Proceeds or Other Property Obtained Through criminal acts" which criminalizes money laundering. The law is wide in scope and applies to a many methods of obtaining criminally obtained funds, not only drug related.

Criminalizes other money laundering, including terrorism-related: Partially

In February 2009, the long-awaited law on "preventing Legalization of Money and Property Obtained in Criminal Ways and Financing of Terrorism" (AML/CFT Law) was passed. The law covers credit institutions; insurers, re-insurers, and insurance intermediaries; securities brokers; organizations that transfer funds; pawnshops; investment vehicles; dealers of precious stones, precious metals, jewelry or other goods made of precious stones and metals; non-governmental organizations or religious organizations; lottery organizers; and real estate intermediaries. Auto dealers and lawyers are not covered by the law. The GOA executed an Executive Order on October 21 that provides an action plan on improvement of the AML/CFT law.

Criminalizes terrorist financing: No

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/s/ct/rls/crt/)

Know-your-customer rules: Yes

The AML/CFT Law details the "know your client" requirements. All banks and other financial institutions shall identify their customers and beneficial owners before establishing business relations; before carrying out occasional transactions above 20,000 AZN; and before carrying out wire transfers.

Bank records retention: Yes

The identification documents of a customer, beneficial owner, or authorized representative must be kept for five years after the account is closed or the relationship terminated. Documents on specific transactions must be kept for at least five years following completion of the transaction.

Suspicious transaction reporting: Yes

Under the AML/CFT Law all financial institutions are required to report suspicious transactions according to a list of indicators, including any transaction: of 20,000 AZN or greater; associated with the citizens of a particular country deemed to be suspicious by the GOA; involving politically exposed persons of a foreign country; and, to or from anonymous accounts that are out of the jurisdiction of the GOA. The Financial Monitoring Service (FMS) will analyze the information submitted and refer suspected criminal activities to the General Prosecutor's Office for review. Because the law is so new, to date, no reports have actually been filed, therefore making it difficult to assess effectiveness.

Large currency transaction reporting: No

The suspicious transaction reporting system uses a threshold.

Narcotics asset seizure and forfeiture:

New legislation was introduced in October 2009. The Prosecutor General's office is responsible for identifying, tracing, freezing, seizing, and forfeiting narcotics-related assets as well as assets derived from, or intended for terrorist financing and other serious crimes. Any asset can be seized, including instruments of crime such as conveyances used to transport narcotics, property on which illicit crops are grown, or used to support terrorist activity, and intangible assets such as bank accounts. Substitute assets can be seized as well as legitimate businesses if used to launder drug money, support terrorist activity, or otherwise are related to criminal proceeds. In 2009, $100,000 was frozen. The government does not have an independent national system and mechanism for freezing terrorist assets.

Narcotics asset sharing authority:

The country does not have laws for the sharing of seized assets with other governments. At this time, the government is actively engaged in bilateral and multilateral negotiations with other governments to enhance asset tracing, freezing, and seizure.

Cross-border currency transportation requirements: Yes

The currency reporting requirement for both inbound and outbound transportation is 5,000 manat. Mandatory declaration forms are used at border crossings.

Cooperation with foreign governments (including refusals):

Azerbaijan has cooperated with appropriate USG law enforcement agencies and other governments investigating financial crimes. Azerbaijan is currently investigating, along with the USG, a corrupt practice and fraud case against a U.S. business.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

After enactment of the February 2009 law, the Government of Azerbaijan (GOA) decided that the FMS, its new financial intelligence unit (FIU) would be located within the Central Bank. After several months of working on budget issues, amendments, and an action plan, the FMS began operations in late 2009.

One person has been arrested for money laundering since January 1, 2009. This individual was a high ranking government official accused of embezzling and laundering $100,000. The case is currently being investigated.

Azerbaijan has circulated to its financial institutions the names of individuals and entities that have been included on the UN 1267 Sanctions Committee's consolidated list and a list of terrorist organizations/financiers that the USG and the European Union have designated under relevant authorities. Azerbaijan did not identify, freeze, seize, or forfeit related assets in 2009.

U.S.-related currency transactions:

Azerbaijan's financial institutions do not engage in currency transactions involving international narcotics trafficking proceeds that include significant amounts of U.S. currency or currency derived from illegal drug sales in the United States or that otherwise significantly affect the United States.

Records exchange mechanism with U.S.:

The GOA has not reached an agreement for the exchange of records with the United States on investigations and proceedings related to narcotics, all-source money laundering, terrorism, and terrorist financing on a bilateral basis. The United States, however, utilizes agreements with multilateral organizations for the exchange of records.

International agreements:

The FIU was just established in 2009 and is not a member of the Egmont Group. Azerbaijan is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

Azerbaijan is a member of MONEYVAL, a Financial Action Task Force-style regional body. Its most recent mutual evaluation can be found here: http://www.coe.int/t/dghl/monitoring/moneyval/Evaluations /Evaluation_reports_en.asp Recommendations:

The adoption of the new AML/CFT law is a good first step for Azerbaijan. The Government of Azerbaijan must work to fully implement the law and raise the capacity of obligated entities and government agencies, in particular the FIU and other supervisory bodies, to ensure all of them are aware of and fulfill their responsibilities. Azerbaijan should provide the necessary resources and authorities to its new FIU. The GOA should criminalize terrorist financing in line with international standards.

Bahamas

The Commonwealth of The Bahamas is an important regional and offshore financial center. The gross domestic product (GDP) of The Bahamas is heavily reliant upon tourism and tourist driven construction. Eighty percent of tourists who visit The Bahamas are from the United States. The Bahamas is a transshipment point for cocaine bound for the United States and Europe. Money laundering trends include the purchase of real estate, large vehicles and jewelry, as well as the processing of money through a complex web of legitimate businesses, and international business companies registered in the offshore financial sector. Strict know your customer (KYC) laws make it difficult for money launderers to penetrate the Bahamian financial sector.

Offshore Center: Yes

The Bahamas is considered an offshore financial center. Offshore financial institutions include banks and trust companies, insurance companies, securities firms and investment fund administrators, financial and corporate service providers, cooperatives, and societies. There are approximately 160,000 registered international business companies, only 44,000 of which are active.

Free Trade Zone: Yes

The Bahamas has one free trade zone located in Freeport.

Criminalizes narcotics money laundering: Yes

The Proceeds of Crime Act, 2000 criminalizes three main money laundering offenses: the transfer or conversion of property with the intent to conceal or disguise the property; assisting another to conceal the proceeds of criminal conduct; and the acquisition, possession or use of the proceeds of crime.

Criminalizes other money laundering, including terrorism-related: Yes

See above. Additionally, the Anti-Terrorism Act of 2004 (ATA), as amended in 2008, addresses terrorism-related activity.

Criminalizes terrorist financing: Yes

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state. gov/s/ct/rls/crt/)

The Anti-Terrorism Act of 2004 as amended in 2008.

Know-your-customer rules: Yes

The Financial Transaction Reporting Act, 2000 (FTRA), as amended in 2008, establishes KYC requirements. The FTRA requires the verification of the identity of any customer before establishing a business relationship; executing transactions exceeding $15,000; executing structured transactions in the amount exceeding $15,000; when it is known or suspected a customer's transaction is the proceeds of crime; when there is doubt of a customer's identity; and when transactions are conducted on behalf of a third party.

Bank records retention: Yes

Financial institutions must retain records for a minimum of five years.

Suspicious transaction reporting: Yes

Reporting was established by the FTRA. The 2004 ATA provides for the reporting of suspicious transactions related to terrorist financing. Covered entities include banks and trust companies, insurance companies, securities firms and investment fund administrators, financial and corporate service providers, cooperatives, and societies. Regulated designated non-financial businesses and professions include casinos; lawyers; accountants; real estate agents; and company service providers. Dealers in precious metals and stones are not included. The Bahamian financial intelligence unit (FIU) received approximately 129 STRs in 2008.

Large currency transaction reporting: Yes

Transactions of $10,000 or greater are reported to the Central Bank.

Narcotics asset seizure and forfeiture:

The Bahamas is able to trace, freeze and seize assets. During 2009, nearly $4 million in cash and assets were seized or frozen.

The ATA, as amended in 2008, implements the provisions of UN Security Council Resolution 1373 and provides for the seizure and confiscation of terrorist assets. The 2008 amendments clarify aspects of the legislation and further comply with UN Conventions related to terrorist financing.

Narcotics asset sharing authority: Yes

Seized assets may be shared with other jurisdictions on a case by case basis. Several recent successful cases involving asset sharing have occurred between the United States and The Bahamas resulting in large amounts being shared by each government.

Cross-border currency transportation requirements: No

Persons entering The Bahamas are not required to provide a written declaration. Cooperation with foreign governments (including refusals): Yes

There are no legal issues which would hamper the Bahamian government's ability to assist foreign governments in mutual legal assistance requests.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

No implementation issues were noted.

U.S.-related currency transactions:

The Bahamian dollar is pegged to the U.S. dollar at an exchange rate of one. The U.S. dollar and the Bahamian dollar are universally accepted in The Bahamas. The Bahamas receives a large influx of U.S. dollars from the tourism industry.

Records exchange mechanism with U.S.:

The Bahamas and the United States are parties to a bilateral mutual legal assistance treaty which entered into force in 1990 and provides for exchange of information. The Financial Crimes Enforcement Network (FinCEN) and the Bahamian FIU share information on a routine basis. The Bahamas has an information exchange agreement with the U.S. Securities and Exchange Commission to ensure that requests can be completed in an efficient and timely manner.

International agreements:

The Bahamas is a party to various information exchange agreements with countries in addition to the United States; authorities can share information or provide assistance to foreign jurisdictions in matters relating to money laundering or other financial crimes without need for a treaty.

The Bahamas is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

The Bahamas is a member of the Caribbean Financial Action Task Force, (CFATF), a Financial Action Task Force-style regional body. Its most recent mutual evaluation can be found here: http: //www. cfatfgafic.org/mutual-evaluation-reports.html

Recommendations:

The Government of the Commonwealth of the Bahamas should provide adequate resources to its law enforcement, judicial, and prosecutorial bodies in order to enforce existing legislation and safeguard the financial system from possible abuses. The Bahamas should continue to enhance its anti-money laundering/counter-terrorist financing regime by implementing the National Strategy on the Prevention of Money Laundering. It should also ensure there is a public registry of the beneficial owners of all entities licensed in its offshore financial center.

Bahrain

Bahrain is the leading financial center in the Gulf region. In contrast with its Gulf Cooperation Council (GCC) neighbors, Bahrain has a service-based economy, with the financial sector providing more than 20 percent of GDP. It hosts a diverse group of financial institutions, including 188 banks, 22 moneychangers and money brokers, and several other investment institutions, including 87 insurance companies. The greatest risk of money laundering stems from illicit proceeds of foreign origin that transit the country. The vast network of Bahrain's banking system, along with its geographical location in the Middle East as a transit point along the Gulf and into Southwest Asia, may attract money laundering activities. Bahrain does not have a significant black market of smuggled goods or known linkages to drug trafficking.

Offshore Center: No

Free Trade Zones: Yes

Mina Sulman, Bahrain's major port, provides a free transit zone to facilitate the duty-free import of equipment and machinery. Another free zone is located in the North Sitra Industrial Estate. Raw materials intended for processing in Bahrain, and machinery imported by Bahraini-owned firms, are also exempt from duty; the imported goods may be stored duty-free.

Criminalizes narcotics money laundering: Yes

Criminalizes other money laundering, including terrorism-related: Yes

In January 2001, the Government of Bahrain (GOB) enacted an anti-money laundering law (AML Law) that criminalizes the laundering of proceeds derived from any predicate offense.

Criminalizes terrorist financing: Partially

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state. gov/s/ct/rls/crt/)

The 2001 AML Law was amended in August 2006 by Law 54/2006, which criminalizes the undeclared transfer of money across international borders for the purpose of money laundering or in support of terrorism. A controversial provision of Law 54 is a revised definition of terrorism that is based on the

Organization of the Islamic Conference definition. Article 2 excludes from the definition of terrorism acts of struggle against invasion or foreign aggression, colonization, or foreign supremacy in the interest of freedom and the nation's liberty.

Know-your-customer rules: Yes

Customer due diligence (CDD) is covered briefly in Decree Law 4/2001, which is applicable to all financial institutions. CDD must be performed before an account is opened and must also be carried out on occasional transactions above BD 6,000 (approximately $15,915). Anonymous accounts are not permitted in Bahrain. Outbound wire transfers are required to include details of the originator's information; records of all originator information must be maintained for incoming transfers.

Bank records retention: Yes

Obligated entities must maintain records of the identity of their customers for five years or in accordance with the Central Bank's AML regulations, as well as the exact amount of transfers.

Suspicious transaction reporting: Yes

The 2001 AML law provided for the creation of the Anti-Money Laundering Unit (AMLU) as Bahrain's financial intelligence unit (FIU). The AMLU receives STRs from banks and other financial institutions, investment houses, broker/dealers, moneychangers, insurance firms, real estate agents, gold dealers, financial intermediaries, and attorneys. Filing entities must also file STRs with their respective supervisors. From January through November 2009, the AMLU received and investigated 243 STRs, 46 of which have been forwarded to the courts for prosecution.

Large currency transaction reporting: No

Narcotics asset seizure and forfeiture: Yes

Under the provisions of DL 4/2001 it is possible to confiscate all property directly or indirectly derived from any criminal activity, as well as substitute assets and income yields. Alternatively, all other property belonging to the convicted person, his spouse, or minor children is subject to confiscation up to the value equivalent of the laundered assets.

Narcotics asset sharing authority:

The Bahrain authorities have not considered the establishment of an asset forfeiture fund.

Disposal of confiscated assets are devolved to the Treasury. In theory, asset sharing with other countries is made possible by Article 8.6 of DL 4/2001. However, there is no information that assets have ever been shared.

Cross-border currency transportation requirements: No

Law 54 also codified a legal basis for a disclosure system for cash couriers, though supporting regulations still must be enacted. In June 2008, the government moved to increase supervision of its borders, by placing ports and customs inspections under the Ministry of Interior which subsequently instructed its officials to strictly enforce laws against the illegitimate movement of currency.

Cooperation with foreign governments:

Mutual legal assistance between judicial authorities is generally governed by Article 426--428 of the 2002 Code of Criminal Procedure ("Letters rogatory"). In money laundering related matters, Article 8 of the AML Law 4/2001 gives the AMLU a specific responsibility in the execution of foreign assistance requests that goes beyond cooperation at the FIU level.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

The system of requiring dual STR reporting is described as a backup system.

In June 2008, authorities arrested two Bahrainis and one Syrian on charges of financing terrorism. In February 2009 all three suspects were convicted of financing terrorism. The one Bahraini in custody was sentenced to a one-year prison term; the other two, tried in absentia, were both sentenced to prison terms of five years. In April 2009, the Bahraini in custody was released several weeks early as part of a general pardon of 177 other security detainees.

U.S.-related currency transactions:

No information available.

Records exchange mechanism with U.S.:

Bahrain does not have a mutual legal assistance agreement with the United States. Bahrain is able to share financial intelligence with the Financial Crimes Enforcement Network (FinCEN).

International agreements:

Bahrain is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--No

In December 2009, the government announced that Bahrain would become a party to the UN Convention against Corruption in the first half of 2010.

Bahrain hosts the Secretariat and is a member of the Middle East and North Africa Financial Action Task Force (MENFATF), a FATF-style regional body. Its most recent mutual evaluation can be found here: http://www.menafatf.org/images/UploadFiles/MutualEvaluation ReportOfBahrain.pdf

Recommendations:

The Government of Bahrain (GOB) has demonstrated a commitment to establishing an AML/CFT system and appears determined to engage its large financial sector in this effort. The AMLU should maintain its efforts to obtain and solidify the necessary expertise to track suspicious transactions. Nevertheless, there should not be an over-reliance on suspicious transaction reporting to initiate money laundering investigations. Authorities should continue to raise awareness within the capital markets and designated non-financial businesses and professions regarding STR reporting obligations and consider applying sanctions for willful noncompliance. Adequate resources should be devoted to the Ministry of Social Development to increase its oversight of NGOs and charities. Regulations should be enacted and enforced governing bulk cash smuggling and requiring the declaration of cash both going into and leaving Bahrain. The GOB should follow through to ensure Bahrain becomes a party to the UN Convention against Corruption. Bahrain should consider revising its definition of terrorism.

Bangladesh

Bangladesh is not a regional financial center. Money transfers outside the formal banking and foreign exchange licensing system are illegal and therefore not regulated. The principal money laundering vulnerability remains the widespread use of the underground hawala or "hundi" system to transfer money and value outside the formal banking network. The vast majority of hundi transactions in Bangladesh are used to repatriate wages from expatriate Bangladeshi workers. The Central Bank (CB) reports a considerable increase in remittances since 2002 through official channels; in 2009, remittances through official channels were $ 9.78 billion between January and November. The increase is due to competition from commercial banks through improved delivery time, guarantees, and value-added services such as group life insurance. However, hundi remains entrenched because it is used to avoid taxes, customs duties, and currency controls. The non-convertibility of the local currency (the taka) coupled with intense scrutiny on foreign currency transactions in formal financial institutions also contribute to the popularity of hundi and black market money exchanges. In 2009, Bangladesh was ranked 139 out of 180 countries surveyed, an improvement on its ranking of 147 in 2008.

Offshore Center: No

Free Trade Zones: Yes

Bangladesh has three Export Processing Zones (EPZs), in Chittagong, Mongla and Dhaka. The EPZs offer tax breaks and other incentives to export-oriented industries.

Criminalizes narcotics money laundering: Yes

Criminalizes other money laundering, including terrorism-related: Yes

In 2009, the Money Laundering Prevention Act (MLPA 2009) and the Prevention of Terrorism Act (PTA) were enacted. Although not fully compliant with international standards, the laws address many flaws in the preceding 2002 money laundering law. Under the provisions of the MLPA 2009, money laundering is a criminal offense. The MLPA 2009 applies to money laundering through the commission of a predicate offense. A list of offenses is detailed in the MLPA 2009, and includes corruption and bribery; counterfeiting currency, deeds and documents; extortion; fraud; forgery; illegal trade in narcotics, arms and stolen goods; kidnapping; murder; black marketing; theft; illegal immigration; dowry crimes; and any other offense the GOB subsequently declares to be a predicate offense. Terrorism is not among the listed predicates.

Criminalizes terrorist financing: Yes

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state. gov/s/ct/rls/crt/)

The PTA introduces terrorist financing into the Bangladeshi legal system for the first time. The PTA authorizes the filing of suspicious transaction reports (STRs) related to terrorist financing, empowers the Central Bank (CB) to monitor suspect financial transactions related to terrorist financing and prohibits a person from using or possessing property or the proceeds of terrorist activity.

Know-your-customer rules: Yes

Since Bangladesh only began in mid-2007 to develop a national identity card (in the form of a voter registration card) and because the vast majority of Bangladeshis do not have a passport, there are difficulties in enforcing customer identification requirements. In most cases, banking records are maintained manually.

Bank records retention: Yes

Banks must keep customer identification and transaction records for five years after termination of the relationship with the customer.

Suspicious transaction reporting: Yes

Banks and financial institutions are required to report suspicious transaction reports (STRs) to the Central Bank. The MLPA 2009 also lists other reporting organizations that are required to submit STRs; these include: insurance companies, money changers and remitters, fund-transfer companies or organizations, and companies permitted to operate as business organizations under the CB's authority. The CB also has the right to notify other organizations that they must function as reporting entities for purposes of the MLPA 2009.

In May 2007, the GOB identified the CB's Anti-Money Laundering Department (AMLD) as Bangladesh's financial intelligence unit (FIU). The FIU depends on the CB for its operation and budget. In the first ten months of 2009, the AMLD received 37 STRs, all of which are currently under analysis nd have not as yet been forwarded to the law enforcement agencies.

Large currency transaction reporting:

The CB mandates cash transaction reports (CTRs). In September 2007, the CTR threshold increased from 500,000 to 700,000 takas (approximately $10,200).

Narcotics asset seizure and forfeiture:

The MLPA 2009 allows the CB, without a court order, to order any bank or financial institution to suspend a transaction or freeze an account for a period of 30 days when there are reasonable grounds to suspect that a transaction involves the proceeds of a crime. The CB may extend such orders for an additional 30 days for the purpose of further investigation.

Narcotics asset sharing authority:

No information available.

Cross-border currency transportation requirements: No

Bangladeshis are not allowed to carry cash outside of the country in excess of the equivalent of $3,000 to South Asian Association for Regional Cooperation (SAARC) countries and the equivalent of $5,000 to other countries. The reporting requirements are not geared towards detecting money laundering but rather enforce currency exchange controls. The GOB does not place a limit on how much currency can be brought into the country, but amounts over $5,000 must be declared within 30 days. The Customs Bureau is primarily a revenue collection agency, accounting for 40-50 percent of Bangladesh's annual government income.

Cooperation with foreign governments:

The Attorney General's Office is the central authority for mutual legal assistance requests. In August 2008, the GOB signed the South Asian Association for Regional Cooperation (SAARC) Convention on Mutual Assistance in Criminal Matters. The government has so far sent Mutual Legal Assistance Requests on tracing, freezing and seizure to foreign jurisdictions. The MLPA of 2009 allows the FIU to enter into agreements with foreign FIUs to exchange information. However, many counterparts require that the Bangladesh FIU be a member of the Egmont Group before negotiating MOUs with Bangladesh.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

In Bangladesh, the hawala/hundi system is the primary means to transfer money and value. Although primarily used to remit wages, the system is also used by criminals and criminal organizations. The regional hundi system primarily uses trade goods to provide counter valuation or a method of balancing the books in transactions. It is part of trade-based money laundering and a compensation mechanism for the significant amount of goods smuggled into Bangladesh. An estimated $1 billion dollars worth of dutiable goods are smuggled every year from India into Bangladesh. A comparatively small amount of goods are smuggled out of the country into India. Hard currency and other assets flow out of Bangladesh to support the smuggling networks.

Bangladesh authorities have not yet tried any cases under the newly enacted PTA 2009. However, in October the government declared the militant outfit Hizb-ut-Tahrir to be a banned organization under the PTA 2009, and CB issued an order to all banks across the country to freeze all accounts of the organization. In November 2009, the CB ordered accounts of three members of Lashkar-e-Tayyiba to be frozen in conjunction with ongoing investigations. Since 2003, Bangladesh has frozen nominal sums in accounts of three designated entities on the UNSCR 1267 Sanctions Committee's consolidated list.

U.S.-related currency transactions:

No information available.

Records exchange mechanism with U.S.:

The Bangladeshi FIU does not currently have an information sharing agreement with the Financial Crimes Enforcement Network.

International agreements:

The Bangladeshi FIU is not a member of the Egmont Group of FIUs. Bangladesh is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--No

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

Bangladesh is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial Action Task Force-style regional body. The 2009 mutual evaluation will be available here: http://www.apgml.org/documents/default.aspx?DocumentCategoryID=17

Recommendations:

Although positive legislation has been passed and progress has been made, the Government of

Bangladesh (GOB) should continue to strengthen its anti-money laundering/counter-terrorist financing regime so that it adheres to international standards. While the FIU is growing steadily, the FIU analysts and investigators need to enhance their ability to conduct analysis and investigations, understand money laundering and terrorist financing methodologies and guide the reporting entities. Other key challenges the GOB must address include encouraging cooperation among myriad GOB entities and increasing the capacities of investigators and prosecutors. Bangladeshi law enforcement and customs should examine forms of trade-based money laundering and proactively initiate money laundering and financial crimes investigations. A crackdown on pervasive customs fraud would add new revenue streams for the GOB. Continued efforts should be made to fight corruption, which is intertwined with money laundering, smuggling, customs fraud, and tax evasion. The GOB should ratify the UN Convention against Transnational Organized Crime and encourage international cooperation through the establishment of a functioning mutual legal assistance regime.

Barbados

Barbados remains vulnerable to money laundering, primarily in the formal banking system.

Domestically, money laundering is largely drug-related and appears to be derived from the trafficking of cocaine and marijuana, as Barbados is a transit country for illicit narcotics. There is also evidence of Barbados being exploited in the layering stage of money laundering with funds originating abroad. The major source of these funds appears to be connected to fraud.

Offshore Center: Yes

As of October 2009, the offshore sector includes 2,927 international business companies (IBCs), compared to 4,635 in 2008; 153 exempt insurance companies and 73 qualified exempt insurance companies; ten mutual funds companies and two exempt mutual fund companies; nine trust companies; five finance companies; and 52 offshore banks. There are no domestic or offshore casinos, or internet gaming sites. The International Business Companies Act (1992) provides for the general administration of IBCs. The International Business (Miscellaneous Provisions) Act 2001 enhances due diligence requirements for IBC license applications and renewals. Bearer shares are not allowed. The International Financial Services Act (IFSA) requires offshore applicants to disclose directors' and shareholders' names and addresses; companies are not allowed to have anonymous directors. The Central Bank regulates and supervises domestic and offshore banks, trust companies, and finance companies. Offshore banks must submit quarterly statements of assets and liabilities and annual balance sheets to the Central Bank, which has the mandate to conduct on-site examinations of offshore banks. Financial statements of IBCs are audited if total assets exceed $500,000.

Free Trade Zones: No

Criminalizes narcotics money laundering: Yes

The Government of Barbados (GOB) criminalizes drug money laundering through the Proceeds of Crime Act and the Drug Abuse (Prevention and Control) Act, 1990-14.

Criminalizes other money laundering, including terrorism-related: Yes

The Money Laundering (Prevention and Control) Act 1998 (MLPCA) and subsequent amendments extend the offense of money laundering by criminalizing the laundering of proceeds from unlawful activities. However, it is unclear whether human trafficking and some corruption categories, such as bribery, have been made predicate offenses for money laundering in Barbados. The MLPCA applies to a wide range of financial institutions, including domestic and offshore banks, IBCs, insurance companies, money remitters, investment services, and any other services of a financial nature.

Criminalizes terrorist financing: Yes

The Anti-Terrorism Act of 2002, as well as provisions of the Money Laundering Financing of Terrorism (Prevention and Control) Act (MLFTA), criminalizes the financing of terrorism.

The GOB circulates to financial institutions the names of suspected terrorists and terrorist organizations listed on the UNSCR 1267 Sanctions Committee's Consolidated List and the list of Specially Designated Global Terrorists designated by the United States. In 2009, the GOB found no evidence of terrorist financing.

Know-your-customer rules: Yes

The MLPCA requires covered institutions to identify their customers. Customer due diligence (CDD) measures include customer identification; beneficial ownership requirements; and enhanced due diligence for new technologies, correspondent banking, and high risk customers such as politically exposed persons and non-face-to-face customers. Financial institutions are required to conduct ongoing due diligence on business relationships engaging in exchanges of $10,000 or more, and all international funds transfers of $10,000 or more, or those transiting Barbados. However, Barbados does not have stringent beneficial ownership identification requirements or strong CDD regulations regarding non-customer transactions of a suspicious nature.

Bank records retention: Yes

Covered institutions must maintain records of all transactions exceeding $5,000 for a period of five years.

Suspicious transaction reporting: Yes

Under the MLPCA, covered institutions must report suspicious transactions, including those that may be indicative of terrorist financing, to the Barbados Financial Intelligence Unit (BFIU). Between January 1, 2009 and November 30, 2009, the FIU received 125 Suspicious Activity Reports; one was referred to the Commissioner of Police.

Under the MLPCA, covered institutions must report all transactions exceeding $5,000 Narcotics asset seizure and forfeiture:

The MLPCA provides for criminal asset seizure and forfeiture; however it applies only to traceable proceeds of crime, and not to instrumentalities or other assets of a convicted defendant. In 2001, the GOB amended legislation to shift the burden of proof to the accused to demonstrate that property in his or her possession is derived from a legitimate source. The law also enhances the GOB's ability to freeze bank accounts. Tracing, seizing and freezing assets may be done by the FIU and the police. Freezing orders are usually granted for six months after which they need to be reviewed. Frozen assets may be confiscated by the Director of Public Prosecutions and are paid into the National Consolidated Fund. Despite the use of freezing mechanisms, and having both criminal and civil asset forfeiture laws, Barbados has not completed any forfeitures, either domestically or at the request of the United States.

In 2009, the Chief Parliamentary Counsel (CPC) drafted new legislation to strengthen the existing MLFTA. One significant change would provide for payment to the government of an amount equal to the value of the property where the property is no longer available for forfeiture. This legislation is pending action by the Cabinet and is expected to proceed with no obstacles.

Narcotics asset sharing authority: Yes

No asset sharing law has been enacted, but bilateral treaties as well as the Mutual Assistance in Criminal Matters Act have provisions for asset tracing, freezing and seizure between countries.

Cross-border currency transportation requirements:

Barbados has a cross-border reporting system for all persons carrying BDS 10,000 (approximately $5,000) entering or leaving Barbados. It should be noted that suspicion of money laundering, terrorist financing, or making a false declaration does not provide a basis for stopping a person and seizing currency and negotiable instruments. The MLFTA contains provisions to control bulk cash smuggling and the use of cash couriers. The international transportation of currency and monetary instruments is limited by the Exchange Control Cap Act 71 and the MLPCA Act Cap 129. Permission must be obtained from the Central Bank to move currency in excess of $10,000 abroad.

Cooperation with foreign governments (including refusals):

Barbados' inability to freeze terrorist assets could hinder its cooperation with investigations of terrorist financing. Although Barbados has frozen some funds at the request of foreign governments, it has not yet obtained final forfeiture or sharing of any of those assets.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

The FIU is inadequately staffed to meet growing demands.

There is no requirement to freeze terrorist funds or other assets of persons designated by the UNSCR 1267 Sanctions Committee.

The GOB has not taken any specific initiatives focused on alternative remittance systems or the misuse of charitable and nonprofit entities.

U.S.-related currency transactions:

No information available.

Records exchange mechanism with U.S.:

A Mutual Legal Assistance Treaty (MLAT) and an extradition treaty between the United States and Barbados entered into force in 2000. Barbados has a bilateral tax treaty with the United States. The Barbados FIU is able to exchange information with the Financial Crimes Enforcement Network through the Egmont Group.

International agreements:

Barbados has bilateral tax treaties that eliminate or reduce double taxation with the United Kingdom, Canada, Finland, Norway, Sweden, and Switzerland. The treaty with Canada currently allows IBCs and offshore banking profits to be repatriated to Canada tax-free after paying a much lower tax in Barbados. The FIU has entered into memoranda of understanding with other FIUs.

Barbados is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--No

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--No

Barbados is a member of the Organization of American States Inter-American Drug Abuse Control Commission (OAS/CICAD) Experts Group to Control Money Laundering. Barbados also is a member of the Caribbean Financial Action Task Force (CFATF), a Financial Action Task Force-style regional body. Its most recent mutual evaluation can be found here: http://www.cfatf-gafic.org/mutual-evaluationreports.html

Recommendations:

The Government of Barbados has taken a number of steps in recent years to strengthen its anti-money laundering/counter-terrorist financing legislation, and should continue to implement these reforms. The GOB should devote sufficient resources to ensure the FIU, law enforcement, supervisory agencies, and prosecutorial authorities are properly staffed and have the capacity to better perform their duties. The GOB should amend its legislation to allow for the seizure of suspected illegal funds at the border and to allow the freezing of funds or assets linked to terrorist financing, al-Qaida or the Taliban. Barbados should consider the adoption of civil forfeiture and asset sharing legislation. Supervision of nonprofit organizations, charities, designated nonfinancial businesses and professions, and money transfer services should be strengthened, as should information sharing between regulatory and enforcement agencies. Finally, to further enhance its legal framework against money laundering, Barbados should move expeditiously to become a party to the UN Convention against Transnational Organized Crime and the UN Convention against Corruption.

Belarus

A general lack of transparency throughout the Belarus financial sector means that assessing the level of or potential for money laundering and other financial crimes is difficult. Corruption and illegal narcotics trafficking are primary sources of illicit proceeds. Due to excessively high taxes, underground markets, and the dollarization and eurozation of the economy, a significant volume of foreign-currency cash transactions eludes the banking system, and smuggling is widespread. Corruption is a serious problem in Belarus, which hinders law enforcement and impedes much-needed reforms. Economic decision-making in Belarus is highly concentrated within the top levels of government. Recent decrees, although substantially liberating the country's business climate, have nevertheless left all major economic levers in the hands of the president and the Government of Belarus (GOB).

Offshore Center: No

Free Trade Zones: Yes

Based on a 1996 Presidential Decree, Belarus has established one free economic zone (FEZ) in each of Belarus' six regions. The president creates FEZs upon the recommendation of the Council of Ministers and can dissolve or extend the existence of a FEZ at will. The Presidential Administration, the State

Control Committee (SCC), and regional authorities supervise the activities of companies in the FEZs. According to the SCC, applying organizations are fully vetted before they are allowed to operate in an FEZ. Presidential Decree 66 tightens FEZ regulations on transaction reporting. Banks in the zones are currently subject to all regulations that apply to banks outside the zones.

Criminalizes narcotics money laundering: Partially

Belarus' "Law on Measures to Prevent the Laundering of Illegally Acquired Proceeds" (AML/CFT Law), most recently amended in 2005, establishes the legal and organizational framework to prevent money laundering and terrorist financing. The AML/CFT Law does not fully incorporate provisions necessary to adequately criminalize all aspects of drug money laundering. Belarus criminalizes self-laundering, but restricts the self-laundering offense to cases that involve using the illicit proceeds to carry out entrepreneurial or other business activities.

Criminalizes other money laundering, including terrorism-related: Yes

Although Belarus has adopted an all crimes approach to money laundering predicate offenses (with some exceptions for tax evasion crimes), it does not criminalize insider trading and market manipulation, and therefore does not meet international standards. The law defines "illegally acquired proceeds" as currency, securities or other assets, including real and intellectual property rights, obtained in violation of the law. A money laundering conviction does not require conviction of the predicate offense.

Criminalizes terrorist financing: Yes

Terrorism is a crime in Belarus and the willful provision or collection of funds in support of terrorism by Belarus nationals or persons in its territory constitutes participation in terrorism by aiding and abetting. In December 2005, the Parliament amended the Criminal Code to explicitly define terrorist activities and terrorism finance. Article 290-1 of the Criminal Code explicitly criminalizes terrorist financing. However, the law does not criminalize indirect provision of money; provision of funds for a terrorist organization or an individual terrorist, if the funds are not intended for a specific act of terrorism; or the financing of theft of nuclear materials for terrorist purposes. Legal entities are not criminally liable for terrorist financing but may be liquidated upon indictment by the General Prosecutor.

Know-your-customer rules: Yes

Belarusian AML/CFT legislation does not contain a clear requirement to perform customer due diligence upon establishing business relations with a customer. However, under Article 5, persons carrying out transactions subject to mandatory suspicious or large currency transaction reporting must be identified.

Bank records retention: Yes

Article 5 of the AML/CFT Law requires all financial institutions to retain documents relating to financial transactions for at least five years from the date of their completion--not from the end date of a business relationship as recommended by the relevant international standard.

Suspicious transaction reporting: Yes

Under Article 1 of the AML/CFT Law, the following are subject to suspicious transaction reporting requirements (STRs): banks and non-bank financial credit institutions; professional operators of the securities market; persons engaged in exchange transactions, including commodity exchanges; insurance firms and insurance brokers; postal service operators; and firms leasing out property. All financial institutions are obligated to report suspicious transactions regardless of value to the financial intelligence unit (FIU)--the Financial Monitoring Department (DFM). The AML/CFT Law exempts most government transactions and those sanctioned by the President from reporting requirements. The government also has used the AML/CFT Law as a pretext for preventing several pro-democracy NGOs from receiving foreign assistance.

Large currency transaction reporting: Yes

Belarus has created a system of mandatory reporting whereby financial institutions must report to the DFM all large-value transactions over 2,000 basic units for natural persons or over 20,000 basic units (approximately $24,500 and $245,000, respectively) for organizations and individual entrepreneurs. However, presidential edict 601 signed on November 4, 2008 exempts Belarusian banks from this requirement and introduces a requirement for banks to identify one-time clients with transactions equal to or exceeding $12,280.

Narcotics asset seizure and forfeiture: Yes

Belarusian legislation provides for broad seizure powers enabling law enforcement to identify and trace assets. The Criminal Code provides for asset forfeiture for all serious offenses, including money laundering where narcotics trafficking is the predicate offense. Seizure of assets from third parties appears possible but is not specifically codified. The seizure of funds or assets held in a bank requires a court decision, a decree issued by a body of inquiry or pre-trial investigation, or a decision by the tax authorities.

Narcotics asset sharing authority:

No information available.

Cross-border currency transportation requirements: Yes

Upon entry into or departure from the country, travelers must declare in writing any sum over $3,000. Travelers departing Belarus with sums exceeding $10,000 are required to secure permission from the National Bank to carry that amount of currency. However, the declaration system was not designed nor is it used to prevent and interdict bulk cash smuggling. Individuals may import or export securities certificates and payment instruments denominated in foreign currencies without any limitations on the amount and without the declaring them. Customs authorities are unable to apply sanctions on the basis of suspicion of money laundering or terrorist financing against persons moving funds cross-border.

Cooperation with foreign governments:

Belarusian legislation does not contain any conditions that would excessively restrict the provision of mutual legal assistance. The GOB has entered into a number of bilateral agreements. Within the Commonwealth of Independent States (CIS) mutual legal assistance is provided under the Convention on Legal Assistance and Legal Relations in Civil, Family, and Criminal Cases.

U.S. or international sanctions or penalties: Yes

After a presidential election in 2006 that was condemned as fraudulent, senior Belarusian officials were barred from traveling to the United States and the European Union.

In 2007, the United States imposed sanctions on the state petrochemical conglomerate, Belneftekhim, which U.S. officials believe is personally controlled by President Alexander Lukashenko. The company accounts for about one-third of Belarus' foreign currency earnings.

In December 2009, the European Parliament adopted a resolution that supports maintaining sanctions against Belarusian officials in order to prompt greater democratization.

Enforcement and implementation issues and comments:

Belarus has made an effort to ensure cooperation and coordination between state bodies through the Interdepartmental Working Group established specifically to address AML/CFT issues.

Although the DFM is an autonomous unit within the State Control Committee of Belarus with the rights of a legal entity, it does not have an independent budget and cannot independently hire staff.

Belarus does not have an adequate system in place to freeze without delay terrorist assets. The AML/CFT Law (Article 5) requires banks and designated non-bank financial institutions to suspend a financial transaction if one of its participants is a person suspected of being involved in terrorist activities or controlled by terrorists. The National Bank provides banks with the State Security Committee's lists of persons suspected of being involved in terrorist activities or controlled by persons engaged in terrorism--including persons on the UNSCR 1267 Sanctions Committee's consolidated list. Other non-bank financial institutions do not receive the terrorist lists and have little awareness of freezing requirements.

U.S.-related currency transactions:

The U.S. dollar is commonly used in both the legitimate and underground economies and, together with the euro, is the currency of choice for money laundering.

Records exchange mechanism with U.S.:

The United States and Belarus do not have a mutual legal assistance agreement in place.

International agreements:

Belarus has signed bilateral treaties on law enforcement cooperation with Afghanistan, Bulgaria, India, Latvia, Lithuania, the People's Republic of China, Poland, Romania, Syria, Turkey, the United Kingdom, and Vietnam. In 2009, the DFM signed an AML agreement with its Macedonian counterpart. The DFM cooperates with counterparts in foreign states and with international organizations.

Belarus is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

Belarus is a member of the Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG), a Financial Action Task Force-style regional body. Its mutual evaluation can be found here: http://www.eurasiangroup.org/en/mers.html

Recommendations:

The Government of Belarus (GOB) has taken steps to construct a legal and regulatory framework to fight money laundering and terrorist financing. It should focus on the full implementation of existing legislation and enact amendments to its laws, where necessary, to accomplish the following: implementing strict regulation of industries operating within the FEZ areas; reinstating the identification requirement for foreign currency exchange transactions; extending the AML/CFT Law's application to the governmental transactions that are currently exempted under the law; and honing its guidance on and enforcement of suspicious transaction reporting. The GOB also should bring the non-financial sectors under the same AML/CFT requirements that it imposes on the financial sector, and ensure resources for supervision, monitoring and a sanctions regime for noncompliance. Belarus' AML/CFT legislation should be further amended to comport with international standards and to provide for more transparency and accountability. The GOB should ensure the regulations and guidance provided by the National Bank and other regulators are legally binding. Similarly, the National Bank should be given the authority to carry out its responsibilities, and not be subject to influence by the Presidential Administration. The GOB should provide law enforcement agencies and the judiciary with appropriate resources and training to increase their capacity to investigate and prosecute money laundering and terrorist financing offenses. Belarus should provide adequate staff, tools, training and financial resources to its FIU so it can operate effectively. The GOB must work to further improve the coordination among agencies responsible for enforcing AML/CFT measures. Belarus should implement measures to provide for the timely freezing of assets of individuals and entities designated by the UNSCR 1267 Sanctions Committee. The GOB should take serious steps to combat corruption in commerce and government. The GOB also should take steps to ensure the AML/CFT framework operates more objectively and less as a political tool.

Belgium

Belgium's banking industry is of medium size, with assets of over $2 trillion dollars in 2009. Illicit funds, formerly consisting mostly of narcotics trafficking proceeds, now derive mainly from serious forms of financial crime, including tax crime. Other noteworthy predicate offenses include trafficking in persons and goods. Authorities note that criminals are increasing their use of remittance transactions and shell companies, and are abusing non-financial sectors, in particular lawyers, real estate and nonprofit organizations to launder money. The Belgian diamond industry also has been used to launder money.

Offshore Center: No

Free Trade Zones: No

Criminalizes narcotics money laundering: Yes

Criminalizes other money laundering, including terrorism-related: Yes

Article 505 of the Belgian Penal Code criminalizes laundering of money derived from any criminal offense. Belgium's anti-money laundering/counter-terrorist financing (AML/CFT) system is contained in its Law of 11 January 1993 (AML/CFT Law) on preventing use of the financial system for the purpose of money laundering or terrorist financing.

Criminalizes terrorist financing: Yes

(Please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state. gov/s/ct/rls/crt/)

In January 2004, the Belgian Parliament passed legislation criminalizing terrorist acts and material support (including financial support) for terrorist acts, and allowing judicial freezes on terrorist assets. The law prohibits the provision of material support to terrorists groups by nonprofit organizations. Article 140 of the Penal Code criminalizes participation in the activity of a terrorist group, and Article 141 criminalizes the provision of material resources, including financial assistance, to terrorist groups.

Know-your-customer rules: Yes

Belgium's AML/CFT law mandates customer due diligence and reporting requirements that apply to the formal financial sector as well as non-financial businesses and professions, including estate agents, private security firms, funds transporters, diamond merchants, notaries, bailiffs, auditors, chartered accountants, tax advisors, certified accountants, surveyors, lawyers and casinos. Financial institutions must comply with know your customer principles, regardless of transaction amount.

Bank records retention: Yes

Institutions must maintain records on the identities of clients engaged in transactions that are considered suspicious or that involve an amount equal to or greater than 10,000 euros (approximately $15,000) as well as retain records of suspicious transactions reported to the financial intelligence unit (FIU) for at least five years.

Suspicious transaction reporting: Yes

Belgian law mandates reporting of suspicious transactions to the FIU by a wide variety of financial institutions and non-financial entities, including notaries, accountants, bailiffs, real estate agents, casinos, cash transporters, external tax consultants, certified accountant-tax experts, and lawyers. The FIU's primary mission is to receive, analyze, and disseminate all suspicious transaction reports (STRs) submitted by obligated entities. In 2008, the FIU received 15,554 disclosures and transmitted 937 cases to the public prosecutor.

Large currency transaction reporting: Yes

Narcotics asset seizure and forfeiture:

The Government of Belgium (GOB) has created a sophisticated and comprehensive confiscation and seizure regime, encompassing the Central Office for Seizure and Confiscation (COSC), operating under the auspices of the Ministry of Justice. The COSC ensures that authorities execute confiscations and seizures smoothly and efficiently in accordance with the law. Belgian law requires a judicial order to execute confiscations and seizures, and allows civil as well as criminal forfeiture of assets. Seizures in Belgium can be direct or indirect. Direct seizures involve the seizure of items linked directly to a crime. Indirect seizures are "seizures by equivalence," usually of homes, cars, jewels and other items not directly linked to the crime in question.

The Ministry of Finance can administratively freeze assets of individuals and entities who are on the UNSCR 1267 Sanctions Committee's consolidated list and/or those covered by a European Union (EU) asset freeze regulation.

Narcotics asset sharing authority:

A law passed in July 2006 allows for the possibility of the sharing of seized assets from serious crimes, including those related to narcotics, on a reciprocal basis.

Cross-border currency transportation requirements: Yes

A Royal decree on measures to control cross-border transportation of cash came into force on June 15, 2007. The Royal decree stipulates the obligation to declare transportation of currency worth 10,000 euros or more entering or leaving the EU/Belgium. In cases of failure to declare, or if there is a suspicion that the cash declared originates from illegal activities or is intended to finance such activities, the Belgian Customs and Excise administration may confiscate the cash for up to 14 days and send a report to the FIU. From June 2007 to December 2008, Belgian Customs filed 815 reports with the FIU, representing 37.2 billion euros.

Cooperation with foreign governments:

Belgium is a cooperative and reliable partner in law enforcement efforts. The federal police enjoy crossborder cooperation with other police and investigative services in neighboring countries. Belgium does not require an international treaty as a prerequisite to lending mutual assistance in criminal cases.

U.S. or international sanctions or penalties: No

Enforcement and implementation issues and comments:

Authorities believe that 3,500 phone shops, small businesses where customers can make inexpensive phone calls and access the internet, are operating in Belgium. Only an estimated one-quarter of these shops are formally licensed. Since 2004, Belgian police have made a series of raids on these businesses. In some phone shops, authorities uncovered money laundering operations and hawala-type banking activities. Raids in some locations uncovered numerous counterfeit phone cards in addition to evidence of money laundering activities. Authorities have closed more than 200 such shops since 2004, and estimate that the Belgian state loses up to $256 million in tax revenue each year through tax evasion by these businesses. Authorities report that phone shops often declare bankruptcy and later reopen under new management, making it difficult for officials to trace ownership and collect tax revenues.

Fully 80 percent of the world's rough diamonds and 50 percent of polished diamonds pass through Belgium. The GOB recognizes the particular importance of the diamond industry, as well as the potential vulnerabilities it presents to the financial sector. Belgium's robust diamond industry presents special challenges for law enforcement, but authorities have transmitted a number of cases relating to diamonds to the public prosecutor, and they monitor the sector closely in cooperation with local police and diamond industry officials.

Money laundering legislation imposes restrictions on cash payments for real estate. Only an amount not exceeding 10% of the sales price, up to a maximum of 15,000 euros (approximately $22,500), can be paid in cash. The agreement and deed of sale must specify the number of the financial account from which the amount was or will be debited. Cash payments over $25,000 for goods are also illegal.

In 2008 the federal police referred to the public prosecutor 385 individual cases involving money laundering, fraud, and corruption.

U.S.-related currency transactions:

No reliable estimates exist for the amount of US currency in circulation in Belgium. However, US currency in Belgium does not significantly affect the U.S. market or impact the number of dollars in circulation. Belgium has an open market economy and received $21 billion worth of goods from the U.S. in 2009, exporting $13 billion back to the U.S. Remittances both ways are insignificant. Belgium does not produce illegal drugs or counterfeit items for sale in the U.S., and despite being a transport hub for Europe, does not export or re-export significant amounts of these items directly to the U.S.

Records exchange mechanism with U.S.:

A mutual legal assistance treaty (MLAT) between Belgium and the United States has been in force since 2000. Belgium and the United States have since amended and supplemented this treaty, in implementation of the U.S.--EU extradition and mutual legal assistance agreements.

International agreements:

The FIU shares information with its European colleagues. Belgium is a party to:

* the UN Convention for the Suppression of the Financing of Terrorism--Yes

* the UN Convention against Transnational Organized Crime--Yes

* the 1988 UN Drug Convention--Yes

* the UN Convention against Corruption--Yes

Belgium is a member of the Financial Action Task Force. Its most recent mutual evaluation can be found here: http://www.fatf-gafi.org/dataoecd/40/39/42761756.pdf

Recommendations:

The Government of Belgium's (GOB) continuing implementation of the international standards complements an already solid anti-money laundering regime and a clear official commitment to fighting financial crimes, including the financing of terrorism. The GOB should expedite the adoption of legislation aligning the country's laws with the third EU Directive.
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Title Annotation:Afghanistan-Belgium
Publication:International Narcotics Control Strategy Report
Geographic Code:9AFGH
Date:Jan 1, 2010
Words:24783
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