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Interamerican drug abuse control commission CICAD--regional anti-money laundering organisation feature.

IN line with the growing recognition in the 1980s of anti-money laundering campaigns as a weapon against terrorism and increased knowledge global drug supply routes, (implicating a number of Latin American countries), governments of the western hemisphere concluded that greater formal co-operation was necessary in fighting dirty money. A consequence was that in April 1986 the Organisation of American States (OAS) adopted the "Program of Action of Rio de Janeiro" which established the Inter-American Drug Abuse Control Commission (CICAD) "to establish the hemisphere's response to all aspects of the drug problem". All 34 OAS member states, from Canada and the US in the north down to Chile and Argentina in the south, became members of CICAD. Cuba was not among them, because its communist system was prevented it from fulfilling OAS membership requirements. CICAD's "core mission" was stated in 1986 as aiming "to enhance human and institutional capacities and channel the collective energy of the member states to reduce the production, trafficking and use and abuse of drugs in the Americas." It set as its main objectives, which still apply today:

* To serve as the western hemisphere's policy forum on all aspects of the drug problem;

* To foster multilateral cooperation on drug issues in the Americas;

* To execute action programmes to strengthen the capacity of member states to prevent and treat drug abuse;

* To combat production and trafficking of illicit drugs and deny traffickers their ill-gotten gains;

* To promote illicit drug-related research, information exchange, specialised training, and technical assistance; and

* To develop and recommend minimum standards for drug-related legislation, treatment, the measurement of both drug consumption and the cost of drugs to society, and drug-control measures, among others.

This declaration was followed in 1992 by the adoption of the CICAD 'Model Regulations Concerning Laundering Offenses Connected to Illicit Drug Trafficking and Related Offenses'. These regulations have stood as the regulatory, legal and operational foundation of the fight against money laundering throughout the Americas for the past 14 or so years. They have been amended more than a dozen times by the CICAD Group of Experts, usually in response to recommendations made by a number of international agencies and specialised organisations including the Financial Action Task Force (FATF). The regulations were modified in 1997, for instance, so as to include Financial Intelligence Units (FIUs) as "an appropriate tool for combating money laundering" and again in 1999 to expand the crime of money laundering, when the description was changed to 'laundering offenses connected to illicit drugs and other serious offences'.

In December 1995, ministers representing the 34 OAS states met at Buenos Aires in a ministerial conference 'Concerning the Laundering of Proceeds and Instrumentalities of Crime'. It was there agreed to recommend to governments "a plan of action for a coordinated hemispheric response to combat money laundering." This meeting agreed that member governments should include in their definition of money laundering "as predicate offenses, in addition to drug-trafficking, other 'serious offences, (defined here as crimes punishable by a prison term exceeding six months), and that countries should implement the CICAD model regulations and the members of both FATF and the Caribbean Financial Action Task Force (CFATF) should implement the 40 recommendations and the 19 recommendations, respectively."

The 1995 decision of the OAS General Assembly to adopt a 'Anti-Drug Strategy in the Hemisphere' as proposed by CICAD meant that for the first time there was a clearly recognised concept of shared hemisphere responsibility for drug control. CICAD consists of a Commission and an Executive Secretariat. The Commission, made up of one high-ranking representative from each member state, is the hemispheric forum for discussion, debate, decision, and action on all drug-related matters and holds meetings twice a year. The Executive Secretariat, an office of the OAS Department of Multidimensional Security with a permanent staff of approximately 40, carries out programmes under the guidance of the Commission. In 1998, the Second Summit of the Americas agreed to establish the Mutual Evaluation Mechanism (MEM) "to stimulate strengthened multilateral co-operation on drug control, to measure the progress of CICAD member states, and of the hemisphere as a whole, in confronting all aspects of the drug problem, and to make recommendations to member states to improve deficiencies identified in the evaluations." Under MEM each country was made subject to an evaluation every two years by a group composed of one government expert from each member state, focussing on four main topics: institutional development, demand reduction, supply reduction, and control measures. The national evaluation reports carry recommendations for each country as well as one for the hemisphere as a whole. Between evaluation reports, MEM experts assess member countries on the implementation of earlier recommendations. That same summit meeting of 1998 authorised CICAD to liaise with the Inter-American Development Bank (IADB) to provide assistance and support "for the establishment and strengthening of financial intelligence units that uncover crimes of money laundering in various member states."

This was far from being a comprehensive financial subsidy however: CICAD authorities determined early as 1986 that because of the limitations on the agency's resources, the main burden of countering money laundering would have to be shouldered by the member states themselves. CICAD's Anti-Money Laundering Unit (AMLU) was established at the end of 1999 to oversee a significant increase in activities to train and assist member states in the control of money laundering. The AMLU aims to provide technical assistance and training to all member states in judicial, financial and law enforcement areas. It was also designed as the secretariat of CICAD's Experts Group to Control Money Laundering, the hemispheric forum set up to debate, analyse and publish conclusions on money laundering. In effect AMLU served to develop and refine the Model Regulations "as permanent legal documents to provide the legal framework to member states."

The collaboration between CICAD-AMLU and the IADB was broadened from the year 2000 to develop training courses for employees of financial service companies like banks and insurance companies and people from the supervisory institutions responsible for money laundering control, such as the FIUs. The courses began in Argentina, Bolivia, Brazil Chile, Ecuador, Paraguay, Peru, Uruguay, and Venezuela. Among other things this meant familiarising staff and regulators with the commonly-used typologies. This was extended to judges and prosecutors in 2001 where, in conjunction with the Spanish National Drug Plan (NDP) and the IADB, a programme to train each country's judicial body on money laundering techniques and their criminalisation was developed.

In 2002 CICAD-AMLU began a long term project to establish and develop FIUs in Argentina, Chile, Ecuador, Bolivia, Brazil, Peru, Uruguay and Venezuela. Working with the IADB, CICAD provided technical assistance to develop training institutions "to control and analyse tendencies in organised crime to launder assets." Where law enforcement agencies are concerned it trains staff in:

1) "Strategic techniques to facilitate financial investigations that reduce the proceeds of all serious crimes and improve prosecutions of money laundering/terrorist financing offences;

2) "The seizure of property related to these criminal activities."

In these efforts CICAD acted in part as a broker to channel expertise and finance from the wealthier and more advanced OAS members like Canada and the US (and Spain's NDP) into training projects in the western hemisphere countries. Training to combat money laundering through the judicial system has recently been carried out in Colombia for the first time as well as Argentina, Bolivia, Chile, Ecuador, Paraguay, Peru, Uruguay, and Venezuela. The joint CICAD/IADB training programmes have been highly successful and have been bought by a number of commercial banks including Banco Bilbao Vizcaya Argentaria which, with CICAD and in collaboration with the government of Brazil, is designing a course for bank officials in the whole of Brazil. "It is estimated that from this starting point, the training course developed by CICAD will reach more than fifty thousand staff members of the BBVA group in South America," a CICAD spokesman said.

Where does all this leave CICAD today in the context of global anti money laundering organisations? At present only five of CICAD's members--the US, Canada, Argentina, Mexico and Brazil--are members of FATF. There are no moves to bring in any more at present said Vincent Schmoll, principal administrator at the FATF secretariat, but the organisation does not seem view this as a matter of any great concern. CICAD itself has observer status at the FATF, which Mr Schmoll said should not be taken to imply a subordinate relationship. Also there are other regional groups in the western hemisphere: the Caribbean Financial Action Task Force which is a sister organisation of the FATF and GAFISUD (the South American financial action task force) which are both also affiliated to FATF.

"They all abide by, and are trying to implement, the FATF 40 recommendations and the nine special recommendations and they do mutual evaluations so they're not only using the FATF standards but using the same methodology," he said. "It's a kind of indirect FATF participation and it's one reason why we feel able to focus on the rest of the world," he added. However CICAD was a little different from other anti money laundering regional bodies in the western hemisphere in that its primary focus was the anti-drugs campaign and "it looks at money laundering mainly in relation to drugs trafficking."
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Author:Osborn, Alan
Publication:International News
Date:Feb 1, 2006
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