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All money laundering and financial crimes countries/jurisdictions.

Egypt

Egypt is not considered a regional financial center or a major hub for money laundering. Egypt has a large informal cash economy, and many financial transactions are undocumented or do not enter the banking system. Cash remains by far the preferred means of payment in Egypt and, despite efforts by the Egyptian authorities, the use of the formal financial sector remains underdeveloped. Reportedly, arms are smuggled across Egypt's border with Gaza; the funding source and the destination of the proceeds are not clear. Authorities report trade-based money laundering is common, reportedly to avoid taxes and customs fees. Tax evasion also is common. Customs fraud and invoice manipulation also are found in regional value transfer schemes. Since the Egyptian revolution, the attention of Egypt's money laundering investigating agencies has been focused almost exclusively on investigating allegations of illicit gains or corruption under the Mubarak regime. The European Union has taken action to freeze the assets of Mubarak and several members of his regime based on their apparent misappropriation from the Egyptian state.

For more information focusing on terrorist financing, please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

KYC covered entities: Banks, foreign exchange companies, money transfer companies, the post office, insurance companies, security firms, leasing companies, factoring companies, and mortgage financing companies

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 2,253 from June 2008-June 2011

Number of CTRs received and time frame: Not applicable

STR covered entities: Banks, foreign exchange companies, money transfer companies, the post office, insurance companies, security firms, leasing companies, factoring companies, and mortgage financing companies

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: One in 2011

Convictions: Seven from January 2008-June 2011

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: YES Other mechanism: YES

With other governments/jurisdictions: YES

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

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of Egypt (GOE) has been hesitant to utilize its money laundering statutes to their full legal extent. Overlapping jurisdiction and poorly defined areas of responsibility have hindered money laundering investigations in Egypt. Egypt's FIU also suffers from a lack of resources and analysts that is likely slowing enforcement efforts. The GOE should work to improve interagency coordination and information-sharing in investigations of suspicious transactions and financial activities. Egypt would benefit from increased funding and a greater number of investigators and prosecutors dedicated to pursuing money laundering crimes.

Specifically, Egypt should work to increase the number of successful money laundering investigations and prosecutions and improve its enforcement of cross-border currency controls, including by providing training on coordinating and conducting complex financial investigations and by enhancing coordination with regional and MENAFATF partners. The GOE should also work to more effectively manage its asset forfeiture regime, including the identification, seizure and forfeiture of assets.

El Salvador

El Salvador has a rapidly growing banking system with little, other than its dollarized economy and remittance flow, to support such growth. The country is part of the transshipment route for South American cocaine and heroin destined for the United States and cash returning to South America. The U.S. dollar is the main currency in El Salvador. The country's dollarized economy and geographic location make it an ideal haven for transnational organized crime groups, including human and drug trafficking organizations. Money laundering is primarily related to proceeds from illegal narcotics and organized crime. There is no indication that money laundering is being used to fund terrorist activities. The Central America Four Agreement among El Salvador, Guatemala, Honduras, and Nicaragua allows for the free movement of citizens of these countries across their respective borders without passing through immigration or customs inspection. As such, the agreement represents a vulnerability to each country for the cross-border movement of contraband and illicit proceeds of crime.

According to authorities, some of the mechanisms used by organized crime to launder money include the use of front companies, parking lots, travel agencies, remittances, the import and export of goods, cargo transportation and smurfing operations.

There are 16 free trade zones operating in the country. There are no reported hawala or other similar alternative remittance systems operating in El Salvador. A significant number of remittances are transferred through banks, and it is possible narcotics trafficking organizations remit illicit proceeds from drug sales in the United States to El Salvador.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: YES

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: All crimes

Legal persons covered: criminally: NO civilly: NO

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

KYC covered entities: Banks, agricultural credit institutions, money exchanges, accountants, notaries, gaming centers, auto dealers, and securities dealers

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 1,172 in 2011

Number of CTRs received and time frame: 3,050 in 2011

STR covered entities: Banks, agricultural credit institutions, money exchanges, accountants, notaries, gaming centers, auto dealers, and securities dealers

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 11 in 2011

Convictions: Four in 2011

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: YES Other: YES

With other governments/jurisdictions: YES

El Salvador is a member of the Caribbean Financial Action Task Force, a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.cfatfgafic.org/downloadables/mer/El Salvador 3rd Round MER (Final) English.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The number of prosecutions relative to the number of crimes which generate illicit funds is low. The regulatory institutions charged with money laundering supervision are weak and lack both human resources and sufficient regulatory powers. In 2010, the government passed asset forfeiture legislation that allows the government to sell property seized in conjunction with narcotics arrests and to use the profits for counter-narcotics efforts. In 2011, assets worth $1,300,000 were criminally forfeited.

El Salvador needs to provide a clear prohibition against tipping off in its legislation and regulations, and clarify and enforce its provisions regarding criminal liability for legal persons. El Salvador should lower its CTR threshold from approximately $57,000 to $10,000 to comport with the international standard.

Equatorial Guinea

Equatorial Guinea (EG) is not a regional financial center. EG is vulnerable to money laundering and terrorist financing. Implementation of its anti-money laundering laws is not complete. EG's greatest concerns in terms of money laundering and terrorist financing are cross-border currency transactions and the illegal international transfer of money by companies or by corrupt individuals. Smuggling is widespread. Financial crimes enforcement is weak.

Equatorial Guinea is a member of the Economic and Monetary Community of Central Africa States (CEMAC) and shares a regional Central Bank (BEAC) with other CEMAC members. The Government of Equatorial Guinea is also a member of the Banking Commission of Central African State (COBAC) within CEMAC.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

KYC covered entities: Central Bank, banks, banking intermediaries, microfinance institutions, insurance companies, investment services, money changers, casinos, notaries, real estate agents, money transfer companies, travel agencies, auditors, accountants, and high-value goods dealers

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: Not available

Number of CTRs received and time frame: Not available

STR covered entities: Central Bank, banks, banking intermediaries, micro finance institutions, insurance companies, investment services, money changers, casinos, notaries, real estate agents, money transfer companies, travel agencies, auditors, accountants, and high-value goods dealers

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: None

Convictions: None

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: NO Other mechanism: YES (through COBAC)

With other governments/jurisdictions: YES

Equatorial Guinea is not a member of a Financial Action Task Force-style regional body.

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of Equatorial Guinea should work with CEMAC and BEAC to establish a viable anti-money laundering/counter-terrorist financing (AML/CFT) regime and to strengthen the capacity of the National Agency of Finance Investigation (ANIF). Equatorial Guinea's officers charged with crime prevention, including the police, judicial police and ANIF, need greater training in professionalism and proper investigative techniques. EG is ranked 172 out of 183 countries in Transparency International's 2011 Corruption Perception Index.

Although the AML regulations require reporting entities to implement compliance programs and report large and suspicious transactions, the system is only functioning to a limited degree in banking institutions. EG does not have cross-border currency reporting requirements.

The EG government cooperates with the European Community in terms of money laundering and terrorism financing through the CEMAC financial agreement with the Treasury of France.

Equatorial Guinea should become a party to the 1988 UN Drug Convention and the UN Convention against Corruption.

Eritrea

Eritrea is not a regional financial center. The Government of Eritrea (GOE) has created a strict command economy with nearly every significant economic entity controlled by the government/military. Although reliable figures are unavailable, Eritrea is highly autarchic. Exports are miniscule, generating little hard currency (although expected to grow with development of the mining sector). Eritrea spurned assistance from traditional donors. Aid from its largest benefactors, Qatar and China, is not transparent. The GOE relies in part on the taxation of nationals living abroad to sustain its economy. The level of cross border trafficking of narcotics is not known, but, given the government's tight control of its borders, Eritrea is not believed to be a significant market or transit route for narcotics. However, due to its informal cash economy, limited regulatory structure, alternative remittance systems, and its proximity to regions where terrorist and criminal organizations operate, Eritrea is vulnerable to money laundering and related activities.

The constitution, ratified in 1997, has yet to be implemented. Eritrea professes to operate against money laundering, but the mechanisms by which this is achieved are unclear. Eritrea is one of a few countries that do not publish their national accounts, budget, and trade statistics. Eritrean officials will not discuss the country's anti-money laundering/counter-terrorist financing (AML/CFT) regime.

Eritrea is a haven for organizations affiliated with al-Qaida and al-Shabaab; and Eritrean security forces actively support jihadists in terms of training, supply, and probably finance. Eritrea is a disruptive regional influence and has intervened directly in Somalia.

In December 2011 the UN Security Council toughened existing arms embargo sanctions against Eritrea through Resolution 2011 (2023). The resolution addresses concerns over the potential use of the Eritrean mining sector as a financial source to destabilize the Horn of Africa region.

For additional information focusing on terrorist financing, please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: Not available

Legal persons covered: criminally: Not available civilly: Not available

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: Not available Domestic: Not available

KYC covered entities: Not available

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: Not available

Number of CTRs received and time frame: Not available

STR covered entities: Not available

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: NO Other mechanism: NO

With other governments/jurisdictions: NO

Eritrea is not a member of a Financial Action Task Force (FATF)-style regional body.

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Eritrean banking, legal and regulatory systems are undeveloped and non-transparent. Currently, all laws are issued by proclamation from the GOE. Regulations and procedures appear haphazardly created and irregularly enforced. Enforcement of financial legislation is lax and difficult due to widespread avoidance of the banking system.

The GOE should seek international assistance to help structure an AML/CFT regime that adheres to international standards. Eritrea ranks 134 of 183 countries in Transparency International's 2011

Corruption Perception Index. Eritrea should become a party to the UN Convention against Corruption, the UN Convention against Transnational Organized Crime, and the International Convention for the Suppression of the Financing of Terrorism.

Estonia

Estonia has one of the most developed banking systems of the eastern European Union (EU) countries. Estonia has adopted the universal banking model, which enables credit institutions to participate in a variety of activities such as leasing, insurance, and securities. Transnational and organized crime groups are attracted to the territory due to its location between Eastern and Western Europe. The drug situation in Estonia is similar to that in other EU Member States in the region. Analysis of suspicious transaction reports (STRs) disclose some incidents of transferring the proceeds of Internet crime to Estonia.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

KYC covered entities: Credit and financial institutions; lottery/gambling institutions, real estate firms, high value goods traders, pawnbrokers, auditors and accountants, accounting and tax advisors, providers of trust fund and business association services, notaries, attorneys, bailiffs, and trustees and interim trustees in bankruptcy

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 4,317 from January to October 2011

Number of CTRs received and time frame: 5,449 from January to October 2011

STR covered entities: Credit and financial institutions; lottery/gambling institutions, real estate firms, high value goods traders, pawnbrokers, auditors and accountants, accounting and tax advisors, providers of trust fund and business association services, notaries, attorneys, bailiffs, and trustees and interim trustees in bankruptcy

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 59 from January to October 2011

Convictions: Eight cases involving 33 persons from January to October 2011

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: YES Other mechanism: YES

With other governments/jurisdictions: YES

Estonia is a member of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) a Financial Action Task Force-style regional body. Estonia's most recent mutual evaluation report can be found here:

http://www.coe.int/t/dghl/monitoring/moneyval/ Evaluations/round3/MONEYVAL%282008%2932RepEST3_en.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

On January 1, 2011, Estonia joined the euro zone. Estonia has worked to bring its anti- money laundering regime into compliance with international standards. In 2010 Estonia addressed domestic payment services by enforcing the Financial Institutions and e-Money Institutions Act.

The Estonian penal code establishes asset seizure and forfeiture, with special provisions for money laundering. Estonia established an Asset Recovery Unit under the FIU to concentrate on organized crime, detecting criminal assets from serious crimes, and identifying criminal assets transferred to foreign countries.

Ethiopia

Due primarily to its unsophisticated financial systems and pervasive government controls, Ethiopia is not considered to be a regional financial center. Ethiopia's location within the Horn of Africa makes it vulnerable to money laundering-related activities perpetrated by transnational criminal organizations, terrorists, and narcotics trafficking organizations. Sources of illegal proceeds include corruption, smuggling, and trafficking in narcotics, persons, arms, and animal products. As the economy grows and becomes more liberalized, law enforcement sources believe bank fraud, electronic/computer crimes, and money laundering activities will continue to rise. The financial services sector remains closed to foreign investment.

Since strict foreign exchange controls limit possession of foreign currency, most of the proceeds of contraband smuggling and other crimes are not laundered through the official banking system, composed of three public banks and fourteen private banks. High tariffs encourage customs fraud and trade-related money laundering. Law enforcement sources indicate that money and value transfer systems, particularly hawala, are widely used. The Ethiopian Government has closed a number of illegal hawala operations and attempts to monitor hawala networks within the country.

In October 2011, the Financial Action Task Force (FATF) included Ethiopia in its Public Statement for its lack of sufficient progress in addressing longstanding anti-money laundering/combating the financing of terrorism (AML/CFT) deficiencies. The FATF has called upon its members to consider the risks arising from these deficiencies.

For additional information focusing on terrorist financing, please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OFMONEYLAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: NO

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: NO

KYC covered entities: Banks, money transfer agents, foreign exchange bureaus, financial leasing companies, Ethiopian Revenue and Customs Authority, notary offices, licensing authorities, Ethiopian Investment Agency, non-governmental organizations, auditors, accountants, persons engaged in real estate business, precious metal dealers, and broker/investment advisors

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: None

Number of CTRs received and time frame: None

STR covered entities: Banks, money transfer agents, foreign exchange bureaus, financial leasing companies, Ethiopian Revenue and Customs Authority, notary offices, licensing authorities, Ethiopian Investment Agency, non-governmental organizations, auditors, accountants, persons engaged in real estate business, precious metal dealers, and brokers/investment advisors

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Four in 2011

Convictions: None in 2011

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: NO Other mechanism: NO

With other governments/jurisdictions: YES

Ethiopia is not a member of a Financial Action Task Force (FATF)-style regional body (FSRB). Ethiopia was granted observer status with the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), an FSRB, in September 2011.

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

An action plan developed by the Ministry of Finance aims to improve Ethiopia's AML/CFT capabilities through the implementation of a variety of measures. In 2011, Ethiopia implemented various specific directives in accordance with its 2009 AML/CFT law, such as KYC laws and the reporting of suspicious and large cash transactions. Ethiopia should take additional steps to adequately criminalize money laundering and terrorist financing; establish and implement an adequate legal framework and procedures to identify and freeze terrorist assets; ensure a fully operational and effectively functioning financial intelligence unit (FIU); and, implement effective, proportionate and dissuasive sanctions in order to deal with natural or legal persons that do not comply with the national AML/CFT requirements.

The Financial Intelligence Center (FIC), Ethiopia's new FIU established in December 2011, lacks sufficient resources and trained personnel, particularly analysts. The FIC is working to develop its investigative and referral capacity. The Ethiopian law enforcement community, from investigators to prosecutors to judges, remains deficient in its awareness of AML/CFT issues and its understanding of how to address them. A lack of data and the lack of a systematic, investigative approach make it difficult for the federal police to identify money laundering. Further, inadequate police training and lack of resources significantly diminish the federal police's financial investigative abilities.

As of the end of 2011, Ethiopia is not yet a party to the International Convention for the Suppression of the Financing of Terrorism, but the government is taking steps to meet this goal.

Fiji

The Republic of Fiji is a small country with a population of less than one million. It is not a regional financial center, but serves as a regional hub for transportation and shipping for other Pacific island nations. The country's geographical location makes it a convenient potential staging post for criminal activities in Australia and New Zealand, which is demonstrated by some significant drug related cases and a noted increase in the number of human smuggling cases. Cross-border criminal gangs involving individuals from neighboring Asian countries also operate in Fiji.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

KYC covered entities: Banks, foreign exchange dealers, money remittance service providers, law firms, real estate agencies, accountants

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 728 in 2011

Number of CTRs received and time frame: 144,191 in 2011

STR covered entities: Banks, foreign exchange dealers, money remittance service providers, law firms, real estate agencies, accountants

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Two in 2011

Convictions: Four in 2011

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: YES Other: YES

With other governments/jurisdictions: YES

Fiji is a member of the Asia/Pacific Group on Money Laundering (APG), a Financial Action Task Force-style regional body. Its most recent mutual evaluation report can be found here: http://www.apgml .org/documents/docs/17/Fij i%20DAR%20Final.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Fiji's financial intelligence unit does not have budgetary independence. Fiji should continue to implement anti-money laundering and counter-terrorist financing measures that adhere to international standards. Fiji also should become a party to the UN Convention against Transnational Organized Crime.

Finland

Finland is not a regional center for money laundering, financial crime or illegal commerce. Over the past decade, Finland repeatedly has placed first or second on Transparency International's Corruption Perceptions Index (CPI). The major sources of illegal proceeds in Finland relate to financial crimes, and the majority of suspicious financial activities investigated have an international dimension. These funds are normally laundered through currency exchangers and gambling establishments. The number of organized crime groups has grown slightly in the past few years, as has the number of their members. Terrorism related fund-raising, to the extent it exists, appears to be less of a problem than in other European countries.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

KYC covered entities: Credit and financial institutions; investment firms, fund management companies and custodians; the central securities depository and book entry registrars; payment institutions and money remitters; insurance companies, local mutual insurance associations, and insurance intermediaries; authorized pension insurance companies; apartment rental agencies and real estate agents; auditors, lawyers, notaries, and accountants; pawn shops and dealers in high value goods; casinos and gaming entities

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 14,213 from January to June 2011

Number of CTRs received and time frame: Not applicable

STR covered entities: Credit and financial institutions, investment and fund management companies, insurance brokers and insurance companies, apartment rental agencies and real estate agents, pawn shops, betting services, casinos, non-bank financial institutions, management companies, custodians of mutual funds, auditors, auctioneers, lawyers, notaries, accountants, dealers in high value goods, money remitters, tax advisory and financial management services, repossession agents and bankruptcy ombudsmen

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: One in 2010

Convictions: One in 2010

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: YES Other mechanism: YES

With other governments/jurisdictions: YES

Finland is a member of the Financial Action Task Force (FATF). Its most recent evaluation can be found here: http://www.fatf-gafi.org/document/58/ 0,3343,en_32250379_32236963_39535482_1_1_1 _1,00.html

The Government of Finland (GOF) has a comprehensive anti-money laundering/counter- terrorist financing regime. It should continue to enhance its laws and regulations as necessary to adhere to international standards.

Amendments to the scope of the money laundering offense entered into force on June 1, 2011, based on the recommendations of an inter-ministerial working group. The amendments add possession of criminal proceeds to the essential elements of money laundering and include negligent money laundering within the scope of criminal liability of a legal person.

The fact self-laundering of funds is not a crime in Finland, and that it is not possible to prosecute for self-laundering, has an impact on the low number of cases. Individuals suspected of laundering money are often convicted for other crimes. A working group was appointed by the Ministry of Justice in December 2010 to consider criminal sanctioning of self-laundering. The group released its report on May 31, proposing criminalization of self-laundering in the most severe cases. The amendment proposal was circulated for comments. With the comments completed, it could take several months or even up to a year before the amendment comes up for a vote.

The financial intelligence unit has the ability to freeze a transaction for up to five business days in order to determine the legitimacy of the funds. Funds can remain frozen for an extended period when linked to a criminal investigation. According to the Coercive Measures Act, all restraining and freezing orders must be presented to the court every four months. A new order can be given for a "reasonable time," but it is yet unclear how long that time can ultimately be.

France

France remains an attractive venue for money laundering because of its sizable economy, political stability, and sophisticated financial system. Narcotics and human trafficking, smuggling, and other crimes associated with organized crime are among its vulnerabilities.

France can designate portions of its customs territory as free trade zones and free warehouses in return for commitments in favor of employment. France has taken advantage of these regulations in several specific instances. The French Customs Service administers these zones.

For additional information focusing on terrorist financing, please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: All serious crimes Legal persons covered: criminally: YES civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

KYC covered entities: Banks, credit institutions, money-issuing institutions, investment firms, money exchangers, investment management companies, mutual insurers and benefit institutions, insurance brokers and intermediaries, notaries, receivers and trustees in bankruptcy, financial investment advisors, real estate brokers, chartered accountants, auditors, dealers in high-value goods, auctioneers and auction houses, bailiffs, lawyers, participants in stock exchange settlement and delivery, commercial registered office providers, gaming centers, and companies involved in sports bets and horse-racing tips

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 20,252 in 2010

Number of CTRs received and time frame: Not available

STR covered entities: Banks, credit institutions, money-issuing institutions, investment firms, money exchangers, investment management companies, mutual insurers and benefit institutions, insurance brokers and intermediaries, notaries, receivers and trustees in bankruptcy, financial investment advisors, real estate brokers, chartered accountants, auditors, dealers in high-value goods, auctioneers and auction houses, bailiffs, lawyers, participants in stock exchange settlement and delivery, commercial registered office providers, gaming centers, and companies involved in sports bets and horse-racing tips

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 276 in 2010

Convictions: 35 in 2010

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: YES Other mechanism: YES

With other governments/jurisdictions: YES

France is a member of the Financial Action Task Force (FATF). France is also a Cooperating and Supporting Nation to the Caribbean Financial Action Task Force (CFATF), a FATF-style regional body. Its most recent mutual evaluation can be found here: http://www.fatfgafi.org/dataoecd/3/18/47221568.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The French government has a comprehensive anti-money laundering/counter-terrorist financing (AML/CFT) regime and is an active partner in international efforts to control money laundering and terrorist financing. France maintains the ability to designate individuals or entities under French domestic authorities in addition to those designated by European Union (EU) regulations. France and the Unites States have exchanged large amounts of data in connection with money laundering and terrorist financing. France still does not have the capacity to share forfeited assets with other jurisdictions.

France applies the 2006/70/CE European Union directive by which politically exposed persons from the EU states may benefit from simplified vigilance procedures, but only in a limited number of cases.

In September 2011 the Prudential Control Authority (ACP) took several measures to improve its ability to fight money laundering and terrorism financing. The ACP has provided guidelines to help financial institutions define and research "the effective beneficiary" of money laundering or terrorism financing. The ACP also has defined new reporting obligations for money exchangers.

France should continue its active participation in international organizations and its outreach to lower-capacity recipient countries to combat the domestic and global threats of money laundering and terrorist financing.

Gabon

Gabon is not a regional financial center. However, Gabon suffers from porous borders; and smuggling, which is facilitated by organized criminal groups, is widespread. Despite a new administration professing dedication to improving the fiscal management of the country, entrenched corruption still exists. Embezzlement of state funds, including by politically exposed persons (PEPs), reportedly gives rise to money laundering. There is a large Lebanese expatriate community in Gabon engaged in the timber industry, construction, and general trade. In order avoid tight fiscal controls for the repatriation of profits, many Lebanese families have obtained Gabonese nationality. Hawala and trade are also used to transfer funds and value from Gabon to Lebanon.

The Bank of Central African States (BEAC), based in Yaounde, Cameroon, is a regional Central Bank that serves six Central Africa countries and supervises Gabon's banking system. BEAC's Economic Intervention Service harmonizes the regulation of currency exchanges in the member states of the Central African Economic and Monetary Community (CEMAC).

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

KYC covered entities: Banks, exchange houses, stock brokerages, casinos, insurance companies, lawyers and accountants

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 80 from 2006-2010

Number of CTRs received and time frame: Three from 2006-2010

STR covered entities: Banks, exchange houses, stock brokerages, casinos, insurance companies, lawyers and accountants, jewelry shops, car dealers, and casinos

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Eight from January-November 2011

Convictions: None in 2011

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: NO Other mechanism: YES

With other governments/jurisdictions: YES

Gabon is a member of the Central African Action Group against Money Laundering and Terrorist Financing (GABAC), an organization in the process of becoming a FATF-style regional body. To date, there is no mutual evaluation for Gabon.

In September 2005, the Government of Gabon (GOG) created the National Financial Investigations Agency (ANIF), a body designed to lead the fight against money laundering and terrorist financing. Though ANIF is now functional, it not only is hampered by the law, which merges suspicious activity reporting with currency transaction reporting and only requires reporting of suspicious activity for deposits over 5,000,000cfa (approximately $10,000), but it also lacks the necessary resources (both human and financial) to be effective in its mission. Ten of the 80 ANIF STRs have been sent to the Attorney General; however, the Attorney General has not yet reached a decision on these cases. The Gabonese judicial system has been slow to process money laundering cases because the process is slow and cumbersome despite ongoing reform efforts, and judges are not trained to hear such cases. Moreover, the judiciary remains inefficient and susceptible to inappropriate influence. Police inefficiency, corruption, and impunity remain serious problems; although the government is stepping up its efforts against corrupt officials. Collection of evidence is also difficult.

The Gabonese are willing to cooperate on international law enforcement matters via exchange of diplomatic notes and letters. The GOG should continue working with the CEMAC, BEAC, and international organizations to establish a viable anti-money laundering/counter-terrorist financing regime.

Gambia

The Republic of The Gambia, the smallest African nation with a population of approximately 1.6 million people, is at risk for increased narcotic trafficking and money laundering. The Gambia derives most of its GDP from agriculture, tourism, remittances, and the re-export trade, with most transactions conducted in cash. Although not considered a money laundering hub, the true extent of such activity is unknown. The rapid increase in commercial banks entering the local market in the past few years, currently 13, adds to possible money laundering concerns. The seizure of two tons of cocaine in June 2010 (the biggest ever in West Africa), raised concerns that narcotic trafficking and corresponding money laundering could be bigger problems than initially thought. Since the seizure, the Government of The Gambia (GOTG) has strengthened the National Drug Enforcement Agency and publicly condemned narcotic use and trafficking. Despite these efforts, the country remains under-resourced to combat international traffickers.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: List approach

Legal persons covered: criminally: YES civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO

KYC covered entities: Banks and microfinance entities; money remitters and exchanges; financial instrument and securities brokers/dealers; real estate agents; bullion dealers; casinos; insurance companies and intermediaries; and, trusts

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: Not available

Number of CTRs received and time frame: Not available

STR covered entities: Banks and microfinance entities; money remitters and exchanges; financial instrument and securities brokers/dealers; real estate agents; bullion dealers; casinos; insurance companies and intermediaries; and, trusts

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: One from July 2008 to December 2011

Convictions: None

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: YES Other mechanism: YES

With other governments/jurisdictions: YES

The Gambia is a member of the Inter Governmental Action Group against Money Laundering in West Africa (GIABA), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here:

http://www.giaba.org/media/ M_evalu/The%20Gambian%20Detailed%20Mutual%20Evaluation%20%20 Report].pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Despite the will to combat trafficking, money laundering, and terrorist financing, the GOTG lacks the necessary resources to fully implement enforcement programs. The amended 2003 Money Laundering Act includes a comprehensive range of predicate offenses and designated non-financial businesses and professions. Although no U.S. or international sanctions are known to exist against the government, several prominent businessmen operating in the country are known to be financial supporters of terrorism and are subject to U.S. sanctions. In addition, the local affiliate of Lebanese Canadian Bank (LCB), known as Prime Bank Ltd, is currently subject to USA PATRIOT Act Section 311 sanctions for money laundering activity.

There are no known issues with non-profit organizations, alternative remittance systems, offshore sectors, free trade zones, bearer shares, or other specific sectors. The Gambia participates regularly in anti-money laundering/counter-terrorist financing (AML/CFT) training and conferences.

The GOTG should provide adequate resources and capacity to its law enforcement, supervisory and customs personnel so they are able to effectively fulfill their responsibilities. Its fledgling financial intelligence unit should be given autonomy and should be strengthened both in terms of personnel and training to help it operate effectively. The GOTG should become a party to the UN International Convention for the Suppression of the Financing of Terrorism and the UN Convention against Corruption.

Georgia

Illegal income in Georgia derives from tax evasion, falsification of documents, embezzlement, misappropriation of funds, corruption, illegal entrepreneurship, intellectual property rights violations, customs fraud, environmental crimes, and theft. According to the Georgian Ministry of Justice, the bulk of criminal proceeds laundered in Georgia are derived from domestic criminal activity and only a small portion of money laundering is related to narcotics trafficking. Yet there is a market for narcotics based on the number of arrests for drug abuse. South Ossetia and Abkhazia fall outside the control of Government of Georgia authorities and are not subject to monitoring.

According to the Investigation Service of the Ministry of Finance, there is a small black market for smuggled goods in Georgia. There is little evidence to suggest it is significantly funded from narcotics proceeds, or that the funds generated by smuggling are laundered through the formal financial system. Smuggled goods are sold in black or gray markets to avoid tax and customs duties. The extent of black market trading in the breakaway territories of Abkhazia and South Ossetia is unknown.

For additional information focusing on terrorist financing, please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES

KYC covered entities: Banks, currency exchange bureaus, non-bank depository institutions and microfinance organizations; money remitters; securities brokers and registrars; insurance companies and non-state pension scheme founders; organizers of lotteries and other commercial games; entities engaged in activities related to antiquities, precious metals, precious stones and products thereof; customs authorities; entities engaged in extension of grants and charity assistance; notaries; and the National Agency of the Public Registry

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 11,616 from January 1 to July 31, 2011

Number of CTRs received and time frame: 65,427 from January 1 to July 31, 2011

STR covered entities: Banks, currency exchange bureaus, non-bank depository institutions and microfinance organizations; money remitters; securities brokers and registrars; insurance companies and non-state pension scheme founders; organizers of lotteries and other commercial games; entities engaged in activities related to antiquities, precious metals, precious stones and products thereof; customs authorities; entities engaged in extension of grants and charity assistance; notaries; and the National Agency of the Public Registry

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 63 from January to July, 2011

Convictions: 54 from January to July, 2011

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: YES Other mechanism: YES

With other governments/jurisdictions: YES

Georgia is a member of the 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/Georgia_en.asp

In 2011, Georgia achieved better results in detection, investigation and prosecution of money laundering, and training and awareness improved. There are a large number of autonomous money laundering prosecutions and convictions. Georgian law enforcement authorities should put more emphasis on pursuing the link between organized crime and money laundering. For example, investigations into narcotics, extortion, weapons of mass destruction, and smuggling rarely pursue financial components. Georgia recognizes an existing drug problem, yet narcotics trafficking is rarely recognized as a predicate offense for money laundering. In 2010-2011 the seizure of bulk currency on the borders increased significantly compared to previous years. Between October 2006 and July 2008 only one individual was interdicted attempting to smuggle currency from Georgia. In 2010-2011 there were 14 cases. The currency smuggling cases are not being investigated for possible money laundering.

In 2011, a large number of STRs and CTRs were filed by casinos in Georgia but there were no resulting investigations. Similarly, the reports filed by financial institutions, notaries, broker companies and micro finance organizations generate few inquiries. The data compiled by the Financial Monitoring Service, the financial intelligence unit, remains an untapped tool for discovering money laundering from a variety of predicate offenses. There is a lack of information sharing between concerned government agencies and departments.

Germany

While not an offshore financial center, Germany is one of the largest financial centers in Europe. Although not a major drug producing country, Germany continues to be a consumer and a major transit hub for narcotics. Organized criminal groups involved in drug trafficking and other illegal activities are an additional source of laundered funds in Germany. Trends in money laundering include electronic payment systems; financial agents, i.e., persons who are solicited to make their private accounts available for money laundering transactions; and trade in C[O.sub.2] emission certificates. Free Zones of control type I exist in Bremerhaven, Cuxhaven, and Hamburg, i.e., freeports. Deggendorf and Duisburg are control type II Free Zones (unfenced inland ports).

For additional information focusing on terrorist financing, please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZA TION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: Both

Legal persons covered: criminally: NO civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO

KYC covered entities: Credit institutions, financial services institutions, payment institutions and e-money institutions as well as their agents; financial enterprises; insurance companies and intermediaries; investment companies; lawyers, legal advisers, auditors, chartered accountants, tax advisers and tax agents; trust or company service providers; real estate agents; casinos; and persons trading in goods

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 11,042 in 2010

Number of CTRs received and time frame: Not applicable

STR covered entities: Credit institutions, financial services institutions, payment institutions and e-money institutions as well as their agents; financial enterprises; insurance companies and intermediaries; investment companies; lawyers, legal advisers, auditors, chartered accountants, tax advisers and tax agents; trust or company service providers; real estate agents; casinos; and persons trading in goods

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 684 in 2010

Convictions: 606 in 2010

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: YES Other mechanism: YES

With other governments/jurisdictions: YES

Germany is a member of the Financial Action Task Force. Its most recent mutual evaluation can be found here: http://www.fatf-gafi.org/dataoecd/44/19/44886008.pdf

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Germany strengthened its AML/CFT regime in 2011, including by: amending AML/CFT provisions governing the financial sector through the Act to Implement the Second E-Money Directive which entered into force at the end of April 2011; extending the list of predicate offenses to include market manipulation, product piracy and insider trading through the Act to Improve the Combating of Money Laundering and Tax Evasion, effective May 3, 2011; clarifying the powers--such as the right to obtain information and enter premises--of the supervisory authorities responsible for non- financial institutions; and submitting the draft Act to Optimize the Prevention of Money Laundering to the German parliament, with adoption envisaged before the end of 2011. While Germany has no automatic CTR requirement, large currency transactions frequently trigger a STR.

Tipping off is a criminal offense only if it is committed with the intent to support money laundering or obstruct justice, and applies only to previously-filed STRs. Otherwise, it is an administrative offense that carries a fine of up to [euro] 50,000 (approximately $68,000) under the Money Laundering Act; draft legislation would increase the fine up to [euro] 100,000 (approximately $133,000). Legal persons are only covered by the Administrative Offenses Act, and are not criminally liable under the Criminal Code.

The numbers of prosecutions and convictions included in this report only reflect cases in which the money laundering violation carried the highest penalty of all the crimes of which the offender was convicted.

Notably, on March 10, 2011, a German-Lebanese criminal group was sentenced for laundering money from narcotics sales throughout Europe by transporting it to Lebanon. Assets amounting to [euro] 9.2 million (approximately $12.271 million) were forfeited. Germany has no federal statistics on the amount of assets forfeited in criminal money laundering cases. Assets can be forfeited as part of a criminal trial or through administrative procedures such as claiming back taxes.

Germany should become a party to the UN Convention against Corruption.

Ghana

Ghana is becoming an important regional financial center. Most of the money laundering in Ghana involves narcotics, various forms of fraud, and public corruption. Ghana is a significant transshipment point for cocaine and heroin transiting from South America, Iran, and Afghanistan to Europe and the United States. Criminals also launder illicit proceeds through investment in banking, insurance, real estate, automotive import, and general import businesses, and reportedly, donations to religious institutions. Financial crimes such as advance fee fraud, known as Sakawa in Ghana, stolen credit and ATM cards originating in Ghana, and check cloning continue to increase. Public corruption is a major source of money laundering in Ghana, occurring mainly through public procurements and the award of licenses.

Informal financial activity accounts for about 45% of the total Ghanaian economy. Some traders import counterfeit goods or smuggle goods to evade taxes. In most cases, the smugglers bring the goods into the country in small quantities, and Ghanaian authorities have no indication these smugglers have links to criminals who want to launder proceeds from narcotics or corruption. Trade-based money laundering is sometimes used to repatriate "profit" and also for payment of lower customs duties and other taxes.

In September 2007, the first offshore banking facility in Ghana was established. Regulations governing domestic and offshore banks are largely similar. Both are required to perform customer due diligence and file suspicious transaction reports (STRs). Ghana has designated four free trade zone (FTZ) areas, but the Tema Export Processing Zone is currently the only active FTZ. Ghana also licenses factories outside the FTZ area as free zone companies. Free zone companies, most of which produce garments and processed foods, must export at least 70% of their output. The Ghana Free Zone Board and the immigration and customs authorities monitor these companies. There are identification requirements for companies, individuals, and their vehicles in the free zone; however, monitoring and due diligence procedures are lax.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: Combination approach

Legal persons covered: criminally: YES civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: NO Domestic: YES

Covered entities: Banks, insurance and securities firms, casinos, auctioneers, notaries, lawyers, nongovernmental organizations (NGOs), accountants, religious bodies, real estate developers, operators of games of chance, trust and company service providers, businesses engaged in providing financial services that involve the remittance or exchange of funds, dealers in motor vehicles, dealers in precious minerals and stones

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 105 from January-November 2011

Number of CTRs received and time frame: Not applicable

Covered entities: Banks, non-bank financial institutions, auctioneers, lawyers, notaries, accountants, religious bodies, NGOs, money remitters, securities, casinos, insurance and real estate companies, dealers in precious metals and stones, car dealers, and trust and company service providers

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: None

Convictions: None

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: NO Other mechanism: YES

With other governments/jurisdiction: YES

Ghana is a member of the Inter Governmental Action Group against Money Laundering in West Africa (GIABA), a Financial Action Task Force (FATF)-style regional body. Its most recent mutual evaluation can be found here: http://www.giaba.org/index.php?type=c&id=43 &mod=2&men=3

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Ghana has developed an action plan to address its identified deficiencies, but in 2011, the Government of Ghana (GOG) did not make significant progress on implementing its action plan. While regulations to implement the AML Act were passed in March, Ghana still lacks implementing regulations for the Anti-Terrorism Act, Economic and Organized Crime Act, and Mutual Legal Assistance Act. Ghana lacks adequate criminalization of terrorism financing, and there are doubts whether the legislation is enforceable. Consequently, Ghana does not have adequate procedures to freeze, seize, and confiscate terrorist assets or confiscate the proceeds of money laundering. Furthermore, the Ghana Financial Intelligence Centre and Bank of Ghana have drafted AML/CFT guidelines, but they merely replicate the FATF Recommendations and guidance from a neighboring jurisdiction, and do not correspond with Ghana's AML Regulations and other Ghanaian legislation. Additionally, the GOG should institute a beneficial ownership identification requirement and require that the true names of all onshore and offshore entities and their beneficial owners be held in a registry accessible to law enforcement.

Ghana should also take the necessary steps to promote public awareness and understanding of financial crime, money laundering, and terrorist financing activities. There is a general need to strengthen the financial investigation and analytical skills of officers across all law enforcement and intelligence agencies, as well as to increase staffing and training in the prosecutorial and judicial institutions, and in the Financial Intelligence Centre itself.

Ghana has entered into a Customs Mutual Assistance Agreement with the U.S., which facilitates information sharing between the customs administrations of the two countries.

Ghana should ratify the United Nations Convention against Transnational Organized Crime and criminalize other predicate offenses in line with international standards.

Gibraltar

Gibraltar, an overseas territory of the United Kingdom (UK), is part of the European Union. A November 2006 referendum resulted in constitutional reforms transferring powers exercised by the UK government to Gibraltar. Gibraltar has an international financial center which is small internationally, but large in comparison to its domestic economy. The financial services sector has strong ties to London, the Crown Dependencies, Israel and other financial centers. Bordering Spain and near the north coast of Africa, Gibraltar is adjacent to known drug trafficking and human smuggling routes and is heavily policed on land and at sea because of the risk of these activities occurring within its borders or territorial waters.

Gibraltar is exposed to money launderers located in drug producing centers in Morocco and drug consumption and distribution networks in Spain. With the establishment in southern Spain of organized criminal activities from Eastern Europe, there is potential for launderers to use Gibraltar as a base for money laundering. These risks are mitigated by the small coastline and effective policing. Border controls between Gibraltar and Spain also help deter potential money launderers wishing to use Gibraltar for their activities.

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: All serious crimes

Legal persons covered: criminally: YES civilly: Not available

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO

KYC covered entities: Banks, mutual savings companies, insurance companies, financial consultants, investment businesses, postal services, exchange bureaus, attorneys, accountants, financial regulatory agencies, unions, casinos, lotteries, charities, car dealerships, yacht brokers, company formation agents, political parties, real estate agents, notaries, and dealers in gold bullion and high value goods

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 362 in 2011

Number of CTRs received and time frame: Not available

STR covered entities: Any legal person, whether or not they conduct financial services

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: Not available

Convictions: Not available

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: YES Other mechanism: YES

With other governments/jurisdictions: YES

Gibraltar is not a member of a Financial Action Task Force (FATF)-style regional body.

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

Gibraltar has a comprehensive range of anti-money laundering/counter-terrorist financing (AML/CFT) laws. The criminal laws on money laundering have been consolidated in draft form, and powers presently available only in drug-related money laundering cases are being extended to money laundering cases involving the proceeds of other crimes. The Financial Services Commission (FSC), a unified regulatory and supervisory authority for financial services, notes the increasing sophistication of money launderers. The FSC should continue to review regulatory and supervisory practices to keep pace with new developments.

Gibraltar, as a UK overseas territory, cannot sign or ratify international conventions in its own right. Rather, the UK is responsible for Gibraltar's international affairs and may arrange for the ratification of any convention to be extended to Gibraltar. The UN Convention against Transnational Organized Crime was extended to Gibraltar in 2007. The 1988 Drug Convention, the UN Convention against Corruption, and the International Convention for the Suppression of the Financing of Terrorism have not yet been extended to Gibraltar, although the legislation for such extension is in place.

Greece

Greece is considered to be a regional financial center in the developing Balkans, as well as a bridge between Europe and the Middle East. Official corruption, the presence of organized crime, and a large shadow economy make the country vulnerable to money laundering and terrorist financing. Greek law enforcement proceedings indicate that Greece is vulnerable to narcotics trafficking, trafficking in persons and illegal immigration, prostitution, smuggling of cigarettes and other contraband, serious fraud or theft, illicit gaming activities, and large scale tax evasion. Anecdotal evidence of illicit transactions suggests an increase in financial crimes in the past few years and that criminal organizations (some with links to terrorist groups) increasingly are trying to use the Greek banking system to launder illicit proceeds. Criminally-derived proceeds historically are most commonly invested in real estate, the lottery, and the stock market. Criminal organizations from southeastern Europe and the Balkan region are responsible for a large percentage of the crime that generates illicit funds. The widespread use of cash facilitates a gray economy as well as tax evasion, though as part of Greece's reform commitments under its European Union (EU)-IMF bailout program, the government is trying to crack down on both trends. Due to the large informal economy--estimated by the Organization for Economic Co-operation and Development and others to be between 25 and 37 percent of GDP--it is difficult to determine the value of goods smuggled into the country, including whether any of the smuggled goods are funded by narcotic or other illicit proceeds. There is increasing evidence that domestic terrorist groups are involved with drug trafficking.

For additional information focusing on terrorist financing, please refer to the Department of State's Country Reports on Terrorism, which can be found here: http://www.state.gov/j/ct/rls/crt/

DO FINANCIAL INSTITUTIONS ENGAGE IN CURRENCY TRANSACTIONS RELATED TO INTERNATIONAL NARCOTICS TRAFFICKING THAT INCLUDE SIGNIFICANT AMOUNTS OF US CURRENCY; CURRENCY DERIVED FROM ILLEGAL SALES IN THE U.S.; OR THAT OTHERWISE SIGNIFICANTLY AFFECT THE U.S.: NO

CRIMINALIZATION OF MONEY LAUNDERING:

"All serious crimes" approach or "list" approach to predicate crimes: Combination approach

Legal persons covered: criminally: NO civilly: YES

KNOW-YOUR-CUSTOMER (KYC) RULES:

Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: NO

KYC covered entities: Banks, savings banks, and cooperative banks; credit companies, money remitters, financial leasing and factoring companies, bureaux de change, and postal companies; stock brokers, investment services firms, and collective and mutual funds; life insurance companies and insurance intermediaries; accountants, auditors, and audit firms; tax consultants, tax experts, and related firms; real estate agents and companies; casinos (including internet casinos) and entities engaging in gaming activities; auction houses, dealers in high value goods, auctioneers, and pawnbrokers; notaries, lawyers, and persons providing services to companies and trusts

SUSPICIOUS TRANSACTION REPORTING (STR) REQUIREMENTS:

Number of STRs received and time frame: 3,479 in 2011

Number of CTRs received and time frame: Not available

STR covered entities: Banks, savings banks, and cooperative banks; credit companies, money remitters, financial leasing and factoring companies, bureaux de change, and postal companies; stock brokers, investment services firms, and collective and mutual funds; life insurance companies and insurance intermediaries; accountants, auditors and audit firms; tax consultants, tax experts and related firms; real estate agents and companies; casinos (including internet casinos) and entities engaging in gaming activities; auction houses, dealers in high value goods, auctioneers, and pawnbrokers; notaries, lawyers, and persons providing services to companies and trusts

MONEY LAUNDERING CRIMINAL PROSECUTIONS/CONVICTIONS:

Prosecutions: 134 in 2011

Convictions: 58 in the first half of 2011

RECORDS EXCHANGE MECHANISM:

With U.S.: MLAT: YES Other mechanism: YES

With other governments/jurisdictions: YES

Greece is a member of the Financial Action Task Force (FATF). Its most recent mutual evaluation can be found here: http://www.fatf afi.org/document/23/0,3343,en_32250379_32236963_38916695_1_1_1_1,00.html

ENFORCEMENT AND IMPLEMENTATION ISSUES AND COMMENTS:

The Government of Greece (GOG) has been working to improve the effectiveness of the Greek financial intelligence unit (FIU). Greek authorities have hired sufficient staff to carry out the extensive functions with which the FIU is tasked. The GOG has also made available adequate financial resources to ensure the FIU is able to fulfill its responsibilities, ensure its powers are in line with the international standards related to a financial intelligence unit, and ensure its technical and data management systems and capacities support its functions.

Greece still needs to ensure that its confiscation regime is more effectively implemented and used. While the 2008 anti-money laundering/countering the financing of terrorism (AML/CFT) law contains provisions allowing civil asset forfeiture under special circumstances, Greek authorities advise it is not practical to launch civil procedures and currently do not do so. The government also should develop an arrangement for the sharing of seized assets with third party jurisdictions that assist in the conduct of investigations.

In March 2011, an amendment to the 2008 AML/CFT law (Law 3932/A49/10-3-2011) established a new entity, the Financial Sanctions Unit (FSU). The FSU is tasked with designating terrorists in accordance with UNSCR 1373, outside the EU listing system, and issuing executive orders to freeze the assets of internationally designated terrorists. It is unclear if the executive order procedure applies to suspected terrorists designated domestically. The GOG has provided guidance to financial institutions and designated non-financial businesses and professions on freezing assets without delay, and has begun to monitor for compliance, though the effectiveness of the monitoring is still undetermined. The GOG is authorized to impose sanctions on entities for noncompliance with freeze orders.

While Greece has made positive strides in the supervision area, particularly with its transfer of supervisory powers over the insurance sector to the Bank of Greece, a shortage of personnel at the Hellenic Capital Markets Commission (which supervises securities firms, brokers, other financial intermediaries, and clearing houses) remains, but is difficult to address in light of a general hiring freeze in the public sector due to Greece's debt crisis. It also remains unclear whether the Ministry of Justice has enough resources available to deal with money laundering or terrorist finance related cases.

The GOG has instituted regulatory measures requiring that transactions above 3,000 [euro] (approximately $3,850) be executed with credit cards, checks or cashiers' checks and that all business- to-business transactions in excess of 3,000 [euro] (approximately $3,850) be carried out through checks or bank account transfers. All credit and financial institutions, including payment institutions, must also report on a monthly basis all transfers of funds abroad executed by credit card, check or wire transfer. Nevertheless, the GOG should adopt a system for reporting large currency transactions across all regulated sectors and explicitly abolish company-issued bearer shares. It should also continue to improve enforcement of its cross-border currency reporting requirements and improve efforts to deter the smuggling of currency across its borders. Greece also should ensure that companies operating within its free trade zones are subject to the same level of enforcement of AML/CFT controls as other sectors and work steadfastly to bring charitable and nonprofit organizations under the AML/CFT regime.
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Title Annotation:Egypt-Greece
Publication:International Narcotics Control Strategy Report
Article Type:Report
Geographic Code:1USA
Date:May 1, 2012
Words:10419
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