Money-Laundering Terrorist Financing
UN Instruments and Other Relevant International Standards on Money-Laundering and Terrorist Financing
Money-Laundering Terrorist Financing – three major instruments and international standards involved:
- The United National Conventions and Resolutions
- UN Counter-Terrorism Strategy
- FATF Standards
The United Nations Conventions and Resolutions
Nations are sharing efforts to curb money-laundering and stopping terrorism by attacking the economic powers of criminals and terrorist groups and individuals who are making use of or benefiting from legal economy.
One of such conventions is The 1988 United Nations Convention against the Illicit Traffic in Narcotic Drugs and Psychotropic Substances. This convention is considered the first international legal instrument that embody the issue of money-laundering and the first that criminalizes money-laundering.
The UN Convention against Transnational Organized Crime (2003) and the UN Convention against Corruption (2005) came into force. These two instruments both expanded the scope of money-laundering issues by mentioning that it should not apply only to illicit drug trafficking’s proceeds but also apply to the proceeds through any serious crimes.
The UNCTOC and the UNCAC urge member States to establish their own “comprehensive domestic supervisory and regulatory regime for banks and non-bank financial institutions (www.unodc.org) including persons and entities susceptible to money-laundering plots. The establishment of Financial Intelligence Units (FIUs) are also being called for.
A Financial Intelligence Unit serves as national center for receiving and analyzing the following: (a) suspicious transaction reports; and (b) other information relevant to money laundering, associated predicate offences and financing of terrorism, and for the dissemination of the results of that analysis (http://www.egmontgroup.org/about/financial-intelligence-units-fius).
Third, the International Convention for the Suppression of the Financing Terrorism (2002) came into force. This convention requires member States to establish measures that protect their financial systems from being used by terrorist persons or groups.
The UN Security Council adopted “Resolution 1373” which imposed specific obligations on Member States such as “prevention and the suppression of the financing of terrorist acts, the criminalization of terrorism-related activities…, the denial of funding and safe haven to terrorists and the exchange of information to prevent the commission of terrorist acts” (http://bit.ly/1JYcnSO).
The United Nations Global Counter-Terrorism Strategy
This Strategy was adopted by the UN General Assembly in 2006. It is a form of a resolution and plan of action that can “enhance national, regional and international efforts to counter terrorism”.
Financial Action Task Force (FATF) Standards
FATF issued recommendations (40 recommendations) as guides to enhance national legal systems that would help strengthen the financial sector and intensify collaboration in the fight against money-laundering activities. The most updated 2003 Recommendations are more detailed, for example, requiring customer identification and due diligence, suspicious transactions reporting, seizing and freezing, etc.
More details can be found at: www.unodc.org