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HEADLINE NEWS
FATF cracks down on cash movements
By Des Ferriols
The Philippine Star 10/25/2004
The Paris-based Financial Action Task Force (FATF) against money laundering
has passed a new measure requiring countries to crack down on the movement
of cash across borders.
The measure came in the wake of the scandal involving Armed Forces of the
Philippines (AFP) Maj. Gen. Carlos Garcia, whose two sons were apprehended
by US Customs personnel for failure to declare $100,000 in cash as they
entered the US through Los Angeles in December last year.
Officials said they expected the Philippines' Anti-Money Laundering Council
(AMLC) to use the Garcia case as an example in persuading Congress to pass
new legislative measures that would strengthen the Anti-Money Laundering
Act (AMLA).
Meeting for its October plenary session, the FATF passed a measure known
as Special Recommendation IX calling on countries to stop cross-border
movements of currency and monetary instruments related to terrorist
financing and money laundering.
The FATF said countries should confiscate such funds while sharing
information on the movement of illicit cash related to terrorist financing
or money laundering.
"We want to put an end to cash smuggling used to fund terrorism and
criminal activities," said FATF president Jean-Louis Fort. "We're going to
make it tougher to move terrorist money across borders and make it harder
for terrorists to operate."
According to Fort, the FATF would now require countries to institute
measures to detect the physical cross-border transportation of currency and
bearer-negotiable financial instruments. This would include a declaration
system or other disclosure obligation.
The FATF's Recommendation IX also required countries to ensure that their
competent authorities have the legal muscle to stop or restrain currency or
bearer-negotiable instruments that are suspected to be related to terrorist
financing or money laundering, or that are falsely declared or disclosed.
"Countries should ensure that effective, proportionate and dissuasive
sanctions are available to deal with persons who make false declaration(s)
or disclosure(s)," the FATF said. "In cases where the currency or bearer
negotiable instruments are related to terrorist financing or money
laundering, countries should also adopt measures, including legislative
ones consistent with Recommendation III and Special Recommendation III,
which would enable the confiscation of such currency or instruments."
During the meeting, the FATF announced that it was withdrawing the
counter-measures against Myanmar and Nauru, as these countries have now
introduced new measures to remedy anti-money laundering deficiencies.
The FATF said Myanmar enacted rules for the Mutual Assistance in Criminal
Matters Law on Oct. 14, while the rich island nation of Nauru has taken
several significant steps to ensure that offshore banks previously licensed
in Nauru no longer exist and no longer conduct banking activity there.
However, both countries will remain on the list of non-cooperative
countries and territories (NCCTs) until they address the remaining
deficiencies and adequately implement the necessary laws, the FATF said.
Fort also said the FATF welcomed the additional progress made by the Cook
Islands, Indonesia and the Philippines, confirming that the task force
planned to visit these countries to confirm the effective implementation of
their reforms.
The current list of NCCT countries includes: The Cook Islands, Indonesia,
Myanmar, Nauru, Nigeria and the Philippines. The FATF said these countries
would be delisted after working towards ensuring that they were
implementing effective anti-money laundering/counter-terrorist financing
systems.
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R. A. Hettinga