To counteract the process of internationalization of criminal activities within the Organization for Economic Cooperation and Development set up a special organization to combat money laundering - FATF (Financial Action Task Force on Money Laundering).
This typical informal sector
Along with walking rapidly evolving globalization processes affecting the growth of national economies. This is typical for most states today, including for Russia. Even developed countries have a strong informal sector, where the thriving illegal trade in arms, human beings, drugs, prostitution.
Combating money laundering is to exclude the possibility of legal circulation of illegally earned money. Ideally, the suppression of illegal use of dirty money to prevent the overflow of capital between the official and shadow sectors, however, as the chronicle of crime, have not yet been able to find and eliminate patterns of laundering of funds derived from illegal transactions. Despite considerable efforts by the relevant authorities in all countries of the world, criminal cash flow became a pressing objective of socio-economic development of society. He has acquired international shape, sometimes ahead of the processes of economic integration. Very often the informal sector is associated with us since tax evasion, the shadow organization of production that do not exist officially mills, factories and shops. At the post-Soviet non-payment of taxes is not exposed to public condemnation of the hard and often does not lead to criminal liability, but as far away from the tax crimes of the arms trade, human beings and drugs?
The recommendations proposed
The decision to establish a special organization to combat money laundering - FATF - was adopted in Paris in 1989 at the summit of «G». The main task of the new organization set tracking technologies and trends in informal business. The role of FATF recommendations is limited. Today, the activities of FATF focuses on three main areas: dissemination of information on money laundering worldwide, monitor and create countermeasures, monitoring the execution of recommendations.
The main requirements of FATF are:
- The parties should include money laundering in a serious crime, which must provide for the confiscation of a crime;
- Financial institutions must identify all their clients, without exception, and maintain appropriate monitoring of them, must inform authorities of suspicious transactions, while it goes without saying that the state is an adequate monitoring system for financial institutions and regulatory authorities have sufficient powers to implement the full monitoring;
- Must be brought into effect the international agreements that define the interaction of the participants in the disclosure of money laundering schemes.
In June 2003, the FATF invited member countries to review the measures, in particular, to improve the effectiveness of controls gave the following recommendations:
- To strengthen accountability for violations of money laundering;
- Provision of financial institutions in a separate category (risk), risk and suspicious customers;
- Expansion of entities with which the work on money-laundering (FATF previously focused on financial institutions, it has been criticized, and now the organization's activities has shifted towards the so-called consumer trends: casinos, real estate, precious stones and metals , legal services, etc.);
- Enhance transparency in transactions between entities.
Fighting windmills?
It is clear that different levels of stranahchlenah FATF anti-money laundering is different, and there is no standardization in the procedural order. FATF is trying to standardize the law, but the responsibility for the same offense in the different countries remains uneven. For the same offense in China, for example, you can get a death sentence, but escaped with minor Nauru fright. This lack of comparability of responsibility and determines the higher interests of the shadow economy in certain regions. The level of monitoring of the processes also differ in different countries, not to compare, say, Argentina and the United States. So it really FATF now represents a kind of club interest.
The authorities in different ways relate to the processes of money laundering, sometimes putting the issue of measures to combat the international scourge of parallel development of the investment climate in the country. Indeed, the poorer the country, the more it needs investment. Huge undeveloped areas in Brazil, Argentina, Russia creates a high level of demand for foreign investment, forcing the government to one degree or another to treat mildly suspicious capital.
So what are wants FATF? This organization understands that the struggle with the processes of legalization of shadow capital in the world - the fight against windmills. Only the unification of trade regulations and about the same level of developed countries can ensure normal conditions under which the processes of money-shadow, will be significantly reduced. Meanwhile, the FATF has gone on the low road, trying to force member countries to establish a system for monitoring the income in the image and likeness of an American.
All under the tax cap
Confess June FATF recommendations strongly favored bureaucracy typical of large international organizations. However, consumer direction deserves more detailed consideration. One of the basic postulates in the fight against laundering of funds - are not allowed to spend part legalized capital. The main task of the state in this case - to strengthen control over the taxation of the people, inviting individuals to make tax returns on his personal property, and major purchases. But in order to build a system of total control, it is necessary to observe a minimum of two conditions: a full account of the taxpayers and accountability of trade organizations. Then all the tax inspector will be able to compare your income and the value of the property. Of course, the State has an interest in a rigid system of control and the maximum amount of collected taxes. If the banks will certainly fulfill legalized fiscally-information functions, the population will be planted under the tax cap. Note that the construction of such a system of income tax has already begun in most countries of the CIS. However, not all tax offices are ready to give the keys from their databases and systems into the hands of international organizations and even their national authorities for combating money laundering. The structures involved in the fight against laundering of funds by obtaining information from the tax field, have the opportunity to compare it with the holy of holies of the banking system - information about the passage of payments, which makes and bankers, and tax officials in many countries of toys in the hands of politicians. Nevertheless, the FATF has not yet thinking about the internal problems associated with the development of national systems for combating money laundering, and in the best traditions of the bureaucracy do not hesitate to carry out public executions, showing the effectiveness of their international public reference manuals.
Through the black list
Despite its bureaucratic functions, after 11 September 2001 FATF has gained new perspectives on the impact of the country who are not members of the organization. He was elected an efficient and simple mechanism: the organization has issued a number of requirements for national legislation, where that State prevent the uncontrolled laundering of funds. In the event of failure of national laws in conformity with the requirements of FATF country placed in the blacklist and is not recommended that FATF member countries to work with the residents of those countries. And because members of FATF are the most developed countries in the world, such a mechanism has proven very effective.
The first victims of such a preventive mechanism to launder funds were several countries and territories: Cook Islands, Egypt, Nigeria, Philippines, St. Vincent, Mayanmar, Nauru, Grenada and the Ukraine. Special interest is the manner in which the cost to Ukraine. Official representative of the Ministry of Finance of the USA, commenting in March 2003, a blacklist FATF, literally said the following: «With this list, we seek to show the world that a system of financial control in Ukraine and Nauru ineffective». Despite the fact that Ukraine has fulfilled the requirements of FATF and changed its law, from its black list and not removed. And that means a delay of payments for many export contracts, enhanced monitoring of the residents of Ukraine in member FATF.
Russia was in that role a few years ago, and only in October 2002, we excluded from the black list of FATF. Indeed, last June at a meeting in Berlin, Russia accepted as a member of FATF. Bone of contention when taking Russia as a full member of the organization became our Penal Code. The point is that article 174 of the Criminal Code provides for criminal liability only for those who launder money in a large scale. Particularly large, we considered the amount of 900 thousand rubles. So, according to Russian law, all those who have been engaged in money laundering of up to 30 thousand U.S. dollars, can get away fine. FATF experts considered this flaw in the Russian legislation, they are not arranged as they are convinced that criminal responsibility should occur for any amount of money-laundering, proceeds of crime. Now in the FATF are 30 full members. They are mostly economically developed countries. Clearly, such consolidation may be an effective force in combating the laundering of funds, forcing the country out of the black list to change its position on the national monitoring systems. One of the challenges posed by a FATF, is to combat terrorist financing. Who knows, perhaps the organization will be able to have a lot of feats, using state of the general hysteria over terrorist groups. But now see the attack on the major offshore zone and the pressure on member countries to eliminate anonymity when dealing with offshore.
On a gray and black pattern
Despite the fact that in the organization recently, a political subtext, it can be assessed as effective in the study of money-laundering schemes. A recent report FATF divides all the schemes of several subspecies: the financing of terrorism, the laundering of funds in the securities market, money market funds in precious metals and stones. In the area of financing of terrorism the most prevalent scheme «revolutionary taxes», when the legally operating companies are charged either on the good will, whether vymoganiem of such resources under threat of punishment. Among the smaller methods of legal capital in the financing of terrorism can be called religious donations, income from publications, «party» contributions. Interestingly, in most cases, donors, and no idea that their purchases or transfers finance terrorism.
There are several schemes of money-laundering:
- Establishment of a company which is able to combine legal and illegal activities (in this case, terrorists are able to quickly change the direction of cash flows);
- Creation of the so-called shell-company, or registered in offshore jurisdictions;
- Collecting money through payment systems of the type of semi Nawala;
- Registration of the company to family members and third parties;
- Falsification of credit cards, cash.
FATF experts noted that in many cases, charitable organizations have been observed in aiding terrorism. Those charitable entities that are created on religious grounds, and have an extensive network of branches all over the world are now special suspicion. In this regard, especially look suspicious Islamic organization, where donations to the classical form (in accordance with the laws of the Koran) must be made in gold, the movement which in the future it is very difficult to trace. By the methods of money-laundering in the securities market FATF still includes theft, embezzlement of funds, insider trading, manipulation of information in the market. In all cases, the securities market could allow bidirectional movement of cash flows - between the legitimate economy and the black market. In addition to the abuse of professional actors, the greatest evil is an absence in most of the limitations for receiving cash from the transaction. The reduction in cash payments in the stock markets to narrow the enormous hole in which today ooze from legitimate traffic. One of the biggest challenges in combating money laundering - operations on the market of precious metals and gemstones. Gold in a position to carry the cost, has a compact and is not subject to strict regulation.
Typically, large amounts of the yellow metal are purchased for the funds derived from illegal activities, and then used in the calculation of the arms trade, drugs, funding terrorist groups.
Now FATF insists that managers and the bank checks the origin of large gold and refused to work schemes, where the object of sale becomes a metal, which is not in the territory of member countries.
So today, after more than ten years after the creation, FATF has received a second wind. Organization to effectively influence the independent states to prevent money-laundering on an international scale. And it is quite possible that in the near future we will witness growth in the number of members of FATF and the introduction of more effective mechanisms to combat the shadow economy.
This typical informal sector
Along with walking rapidly evolving globalization processes affecting the growth of national economies. This is typical for most states today, including for Russia. Even developed countries have a strong informal sector, where the thriving illegal trade in arms, human beings, drugs, prostitution.
Combating money laundering is to exclude the possibility of legal circulation of illegally earned money. Ideally, the suppression of illegal use of dirty money to prevent the overflow of capital between the official and shadow sectors, however, as the chronicle of crime, have not yet been able to find and eliminate patterns of laundering of funds derived from illegal transactions. Despite considerable efforts by the relevant authorities in all countries of the world, criminal cash flow became a pressing objective of socio-economic development of society. He has acquired international shape, sometimes ahead of the processes of economic integration. Very often the informal sector is associated with us since tax evasion, the shadow organization of production that do not exist officially mills, factories and shops. At the post-Soviet non-payment of taxes is not exposed to public condemnation of the hard and often does not lead to criminal liability, but as far away from the tax crimes of the arms trade, human beings and drugs?
The recommendations proposed
The decision to establish a special organization to combat money laundering - FATF - was adopted in Paris in 1989 at the summit of «G». The main task of the new organization set tracking technologies and trends in informal business. The role of FATF recommendations is limited. Today, the activities of FATF focuses on three main areas: dissemination of information on money laundering worldwide, monitor and create countermeasures, monitoring the execution of recommendations.
The main requirements of FATF are:
- The parties should include money laundering in a serious crime, which must provide for the confiscation of a crime;
- Financial institutions must identify all their clients, without exception, and maintain appropriate monitoring of them, must inform authorities of suspicious transactions, while it goes without saying that the state is an adequate monitoring system for financial institutions and regulatory authorities have sufficient powers to implement the full monitoring;
- Must be brought into effect the international agreements that define the interaction of the participants in the disclosure of money laundering schemes.
In June 2003, the FATF invited member countries to review the measures, in particular, to improve the effectiveness of controls gave the following recommendations:
- To strengthen accountability for violations of money laundering;
- Provision of financial institutions in a separate category (risk), risk and suspicious customers;
- Expansion of entities with which the work on money-laundering (FATF previously focused on financial institutions, it has been criticized, and now the organization's activities has shifted towards the so-called consumer trends: casinos, real estate, precious stones and metals , legal services, etc.);
- Enhance transparency in transactions between entities.
Fighting windmills?
It is clear that different levels of stranahchlenah FATF anti-money laundering is different, and there is no standardization in the procedural order. FATF is trying to standardize the law, but the responsibility for the same offense in the different countries remains uneven. For the same offense in China, for example, you can get a death sentence, but escaped with minor Nauru fright. This lack of comparability of responsibility and determines the higher interests of the shadow economy in certain regions. The level of monitoring of the processes also differ in different countries, not to compare, say, Argentina and the United States. So it really FATF now represents a kind of club interest.
The authorities in different ways relate to the processes of money laundering, sometimes putting the issue of measures to combat the international scourge of parallel development of the investment climate in the country. Indeed, the poorer the country, the more it needs investment. Huge undeveloped areas in Brazil, Argentina, Russia creates a high level of demand for foreign investment, forcing the government to one degree or another to treat mildly suspicious capital.
So what are wants FATF? This organization understands that the struggle with the processes of legalization of shadow capital in the world - the fight against windmills. Only the unification of trade regulations and about the same level of developed countries can ensure normal conditions under which the processes of money-shadow, will be significantly reduced. Meanwhile, the FATF has gone on the low road, trying to force member countries to establish a system for monitoring the income in the image and likeness of an American.
All under the tax cap
Confess June FATF recommendations strongly favored bureaucracy typical of large international organizations. However, consumer direction deserves more detailed consideration. One of the basic postulates in the fight against laundering of funds - are not allowed to spend part legalized capital. The main task of the state in this case - to strengthen control over the taxation of the people, inviting individuals to make tax returns on his personal property, and major purchases. But in order to build a system of total control, it is necessary to observe a minimum of two conditions: a full account of the taxpayers and accountability of trade organizations. Then all the tax inspector will be able to compare your income and the value of the property. Of course, the State has an interest in a rigid system of control and the maximum amount of collected taxes. If the banks will certainly fulfill legalized fiscally-information functions, the population will be planted under the tax cap. Note that the construction of such a system of income tax has already begun in most countries of the CIS. However, not all tax offices are ready to give the keys from their databases and systems into the hands of international organizations and even their national authorities for combating money laundering. The structures involved in the fight against laundering of funds by obtaining information from the tax field, have the opportunity to compare it with the holy of holies of the banking system - information about the passage of payments, which makes and bankers, and tax officials in many countries of toys in the hands of politicians. Nevertheless, the FATF has not yet thinking about the internal problems associated with the development of national systems for combating money laundering, and in the best traditions of the bureaucracy do not hesitate to carry out public executions, showing the effectiveness of their international public reference manuals.
Through the black list
Despite its bureaucratic functions, after 11 September 2001 FATF has gained new perspectives on the impact of the country who are not members of the organization. He was elected an efficient and simple mechanism: the organization has issued a number of requirements for national legislation, where that State prevent the uncontrolled laundering of funds. In the event of failure of national laws in conformity with the requirements of FATF country placed in the blacklist and is not recommended that FATF member countries to work with the residents of those countries. And because members of FATF are the most developed countries in the world, such a mechanism has proven very effective.
The first victims of such a preventive mechanism to launder funds were several countries and territories: Cook Islands, Egypt, Nigeria, Philippines, St. Vincent, Mayanmar, Nauru, Grenada and the Ukraine. Special interest is the manner in which the cost to Ukraine. Official representative of the Ministry of Finance of the USA, commenting in March 2003, a blacklist FATF, literally said the following: «With this list, we seek to show the world that a system of financial control in Ukraine and Nauru ineffective». Despite the fact that Ukraine has fulfilled the requirements of FATF and changed its law, from its black list and not removed. And that means a delay of payments for many export contracts, enhanced monitoring of the residents of Ukraine in member FATF.
Russia was in that role a few years ago, and only in October 2002, we excluded from the black list of FATF. Indeed, last June at a meeting in Berlin, Russia accepted as a member of FATF. Bone of contention when taking Russia as a full member of the organization became our Penal Code. The point is that article 174 of the Criminal Code provides for criminal liability only for those who launder money in a large scale. Particularly large, we considered the amount of 900 thousand rubles. So, according to Russian law, all those who have been engaged in money laundering of up to 30 thousand U.S. dollars, can get away fine. FATF experts considered this flaw in the Russian legislation, they are not arranged as they are convinced that criminal responsibility should occur for any amount of money-laundering, proceeds of crime. Now in the FATF are 30 full members. They are mostly economically developed countries. Clearly, such consolidation may be an effective force in combating the laundering of funds, forcing the country out of the black list to change its position on the national monitoring systems. One of the challenges posed by a FATF, is to combat terrorist financing. Who knows, perhaps the organization will be able to have a lot of feats, using state of the general hysteria over terrorist groups. But now see the attack on the major offshore zone and the pressure on member countries to eliminate anonymity when dealing with offshore.
On a gray and black pattern
Despite the fact that in the organization recently, a political subtext, it can be assessed as effective in the study of money-laundering schemes. A recent report FATF divides all the schemes of several subspecies: the financing of terrorism, the laundering of funds in the securities market, money market funds in precious metals and stones. In the area of financing of terrorism the most prevalent scheme «revolutionary taxes», when the legally operating companies are charged either on the good will, whether vymoganiem of such resources under threat of punishment. Among the smaller methods of legal capital in the financing of terrorism can be called religious donations, income from publications, «party» contributions. Interestingly, in most cases, donors, and no idea that their purchases or transfers finance terrorism.
There are several schemes of money-laundering:
- Establishment of a company which is able to combine legal and illegal activities (in this case, terrorists are able to quickly change the direction of cash flows);
- Creation of the so-called shell-company, or registered in offshore jurisdictions;
- Collecting money through payment systems of the type of semi Nawala;
- Registration of the company to family members and third parties;
- Falsification of credit cards, cash.
FATF experts noted that in many cases, charitable organizations have been observed in aiding terrorism. Those charitable entities that are created on religious grounds, and have an extensive network of branches all over the world are now special suspicion. In this regard, especially look suspicious Islamic organization, where donations to the classical form (in accordance with the laws of the Koran) must be made in gold, the movement which in the future it is very difficult to trace. By the methods of money-laundering in the securities market FATF still includes theft, embezzlement of funds, insider trading, manipulation of information in the market. In all cases, the securities market could allow bidirectional movement of cash flows - between the legitimate economy and the black market. In addition to the abuse of professional actors, the greatest evil is an absence in most of the limitations for receiving cash from the transaction. The reduction in cash payments in the stock markets to narrow the enormous hole in which today ooze from legitimate traffic. One of the biggest challenges in combating money laundering - operations on the market of precious metals and gemstones. Gold in a position to carry the cost, has a compact and is not subject to strict regulation.
Typically, large amounts of the yellow metal are purchased for the funds derived from illegal activities, and then used in the calculation of the arms trade, drugs, funding terrorist groups.
Now FATF insists that managers and the bank checks the origin of large gold and refused to work schemes, where the object of sale becomes a metal, which is not in the territory of member countries.
So today, after more than ten years after the creation, FATF has received a second wind. Organization to effectively influence the independent states to prevent money-laundering on an international scale. And it is quite possible that in the near future we will witness growth in the number of members of FATF and the introduction of more effective mechanisms to combat the shadow economy.
Vitaly Shapran
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