Upgrading/Consolidation of AML Laws and CFT Regimes

As part of the Work Programme for 2001/2002, the Secretariat began collecting the laws and regulations governing Money Laundering. Following the September 11 events, the activity also I ncluded the collection of (CFT) laws and regulations relating to the Combating of the Financing of Terrorism, as part of monitoring the implementation of the UN Resolution 1373 and the 8 FATF Special Recommendations agreed at the Special FATF plenary in October, 2001.

So far, regulations and laws from 6 countries - Swaziland, Botswana, Seychelles, Mauritius, Zambia, and Tanzania have been collected.

The programme activity proposed for year 2002/2003 will involve the collection, compilation and consolidation of all the laws and regulations in an electronic format. This would enable immediate sharing of information between member countries and cooperating nations and organizations on the existing legal and regulatory regime. It is suggested that for those countries that have not yet submitted laws and regulations to the Secretariat should do so not later than 30 November, 2002.

The Secretariat proposes to commission a comprehensive Expert Study of these laws and regulations to determine the gaps that exist in each jurisdiction, weaknesses in their ability to target ML and CFT crimes and make recommendations on changes that are required and the technical assistance needs of each jurisdiction.

Progress on the implementation of this project will be reported to the March 2003 Task Force Meeting and a Preliminary final Report submitted to the August 2003 Meeting.

SAQs on FATF recommendations/CFT

The on going exercise of completing the Self Assessment questionnaires on the 40 FATF recommendations on Money Laundering and the additional 8 special recommendations on Combating of the Financing of Terrorism (CFT) should be speeded up for those countries that have not done so. Out of the 10 countries that have already signed the Mou, seven countries Kenya, Mauritius, Namibia, South Africa, Swaziland, Tanzania and Uganda have already completed the SAQ on ML and only 4 have completed the SAQ on CFT (Mauritius, Seychelles, Uganda and South Africa). All the remaining countries including those who have not signed the MOU should finalise this task on or before 30th September 2002. After completion of the SAQs, the UNGPML (Global Programme against Money Laundering) Mentor and the current Advisor will compile and do an analysis to establish where each country stands and assess any gaps in the respective jurisdictions. This task should be implemented in house probably with the assistance of FATF for standardization purpose. A report will be submitted to the Task Force.

Depending on the findings the Task Force of Senior officials will decide on the way forward in their March 2003 meeting.

Mutual Evaluation Programme

The expected completion and analysis of the Self Assessment questionnaires during the year 2002/03 will provide the necessary inputs for launching the process of Mutual Evaluation. Mutual evaluation utilizes the advantage of peer pressure as the most successful mechanism of efforts to improve member countries commitment to the fight against money laundering. The introduction of mutual evaluation was discussed by the Task Force at its meetings in Windhoek, Namibia (August 2001) and at Dar es Salaam (March 2002). The Task Force, sitting in Dar es Salaam in March 2002, requested FATF to make a presentation on what Mutual Evaluation meant and entailed. The Secretariat’s reading of the mood in that meeting was a mixed one and it would be presumptuous to expect very easy take off in this area. It is being proposed to the Ministers that a series of workshops be commissioned on Mutual evaluation by the FATF or other cooperating partners along the lines of the Commonwealth Secretariat workshops on the Best practices on Money Laundering. The aim of such workshops will be to dimistify member countries negative notion of Mutual evaluation, pointing out the benefits to be drawn from such an exercise. In this regard, ministers may wish to note that Mutual Evaluations are voluntary and mutual. Assessment is therefore done by a group of experts called evaluators from the regional countries including one from the host country, besides the one from the FATF or other FSRBs so it takes the character of peer review. At this stage countries determine the nature and pace of their evaluation. It is important to note that given the current global trends in enhancing AML and CFT Standards, it would be in the interest of ESAAMLG members to embark on a process of mutual evaluation because it provides the basis on which to improve national standards in a cooperative manner. This would enable jurisdictions in the region to move cooperatively together and to avoid the possibility of lagging behind and the danger of being listed as non cooperating.

Training of Mutual Evaluators

Ministers will be requested to approve a programme of training of mutual evaluators including the system of appointing them as a natural off shoot of the above. It is expected that supporting nations and organizations will assist in developing the programme. The Task Force is invited to suggest ways in which this activity can be developed. Programme activities for 2002/03 would involve selection and training of mutual evaluators and the drawing up of a roster covering all countries on mutual evaluation. A report of these evaluations would be considered by the Council of Ministers in 2002.

Identification of Training Technical Assistance needs of member countries:

One of the major functions of the Secretariat is to develop a profile of training and technical assistance needs of member countries. This would facilitate the development of comprehensive capacity building programme that could use skills that are available within member countries and those that can be sourced outside the region. With 10 of the potential 14 member countries as current signatories of the MOU, the Secretariat will initiate a study/survey aimed at identifying the training and technical assistance needs of the member countries who have signed the MOU. The survey will also make proposals on how these needs might be met. A preliminary report of the survey will be presented to the March 2003 Task Force meeting and will provide the basis for the Task Force to develop a programme of capacity building.

The survey will be conducted by the Secretariat working closely with the National Multidisciplinary Anti-Money Laundering Co-coordinating committees. The Committees will be requested to initially submit to the Secretariat the skill gaps that exist in their jurisdictions. Through consultations with the National Committees the Secretariat will then develop a profile for each country of training needs and Technical assistance. Where necessary follow-up visits will be made to the capitals to finalise the profile for each country. Most of the work will be undertaken by the UN Mentor/Consultant.

Regional Standing Subgroups

The Secretariat is a bit uncomfortable with the progress made on the selection, establishment and take off of the standing sub groups on Legal, financial and law enforcement matters. These sub groups are supposed to be the think tanks of the Task Force of Senior officials in their specialised areas but for some reason, this fact has not been borne out. Ministers will therefore be requested to direct that these groups be expeditiously formed. They should all meet and table reports of their work and work programmes in the Task Force meeting in March 2003. As only the nucleus was mentioned in the formative stage, all countries now need to express which sub group they would want to join so that each country belongs to at least one sub group.

Research on M.L. Typologies

Research Work and Typology exercises will continue to be part of the work programme of the group. As we now have a starting point with the collaboration with the Institute of Securities (ISS), the Task Force (TF) will be briefed on the research project by lead Researcher. It is proposed that Ministers will be requested to designate countries to participate in the further work of the ISS Research for both learning purposes and incorporate issues that ESAAMLG feels are gaps and need further work. Ministers may also at this stage wish to pronounce themselves on the way they would like to work with SADC so that some of the good work being done by these organization is focused and does not overlap.

Raising awareness on ML/CFT issues at political level

The Secretariat feels strongly that the current debate on money Laundering and Combating of Financing of Terrorism has not been pitched high enough in the right corridors. There is a feeling that if this debate is not elevated to policy makers and politicians, the outcome will be dismal. It is therefore being proposed that the Task Force advise Ministers that means should be found of taking this dialogue that far to make progress in this important area.

Membership

ESAAMLG is a group of 14 countries 10 of whom have signed the MOU. The remaining 4 countries need to finalise arrangements to sign. At the Arusha launch meeting, Minister encouraged all members to join the group. Following recent developments and world wide campaign against ML and CFT, it is important that all countries should belong to an FRSB. The Task Force may wish to propose to Minister that the President of Council make direct contact with those countries that have not yet signed the MOU, urging them to do so. This will complement the efforts that the Secretariat has put in.

Annual Contributions

In order to implement the agreed work progamme it will be necessary for all signed up members to meet their obligations with regards to the payment of their annual contributions.