In order to prevent and combat Money Laundering, Financing of Terrorism and Financing of Proliferation of Weapons of Mass Destruction (ML/FT/FPADM) the US should have a joint vision involving all States to cope with said crimes, which go beyond all borders becoming transnational networks.

Therefore, the existence of a set of rules and regulations shared by the States – which establish a system to detect, prevent and suppress the mentioned rimes – turns into a coordinated response to face such threats for isolated efforts are ineffective in a globalized world.

The best-known international standards to combat ML, FT and FPWMD are the 40 Recommendations from the Financial Action Task Force (FATF). They include a number of financial, legal and conduct measures which countries should implement in order to increase transparency and be able to take actions and apply sanctions against the illicit use of the financial system.

The FATF is an inter-governmental body which was established in 1989 by the Group of Seven, also known as G-7. Argentina has been a full member of FATF since 2000. The organization develops international standards and promotes the effective implementation of policies, legal and regulatory measures to prevent and combat money laundering, financing of terrorism and financing of the proliferation of weapons of mass destruction as well as other threats to the integrity of the international financial system, security and world peace.

There are several worldwide legal, administrative and operational frameworks which regulate different financial systems, and the FATF Recommendations make up a comprehensive and robust scheme of measures which the countries adapt to their own necessities and put into practice to combat such crimes.

 Below are the principal Recommendations which are directly aimed at dealing with risks:

Recommendation 1 on Anti-Money Laundering and Combating Financing of Terrorism (AML/CFT) sets out that the countries have to identify, assess and understand their ML/FT risks and adopt measures, including the appointment of an authority or a mechanism to coordinate risk assessment and resource implementation actions to ensure risk mitigation.

The FATF Recommendation 2 on national cooperation and coordination establishes that countries should have national AML / CFT policies taking into account the identified risks, which should be subject to periodic reviews. They should also designate an authority or have a coordination or other sort of mechanism in charge of such policies.

Recommendation 3 specifically deals with money laundering, establishing that countries should criminalize it on the basis of the Vienna Convention and the Palermo Convention. In addition, it sets out that countries should apply the crime of money laundering to all serious offences, with a view to including the widest range of predicate offences.

The FATT Recommendation 4 refers to confiscation and establishes that countries should adopt measures to enable competent authorities to freeze or seize and confiscate specific property, including: laundered property, proceeds from, or instrumentalities used in or intended for use in money laundering or predicate offences, and property that is the proceeds of, or used in, or intended or allocated for use in, the financing of terrorism, terrorist acts or terrorist organizations.

Furthermore, as regards standards linked to the Financing of Terrorism (FT), Recommendation 5 provides that countries should not only criminalize FT on the basis of the International Convention for the Suppression of the Financing of Terrorism but also the financing of terrorist organizations and individual terrorists even in the absence of a link to a specific terrorist act or acts. In addition, countries should ensure that such offences are designated as money laundering predicate offences.

Recommendation 6 refers to the financial sanctions related to terrorism and FT, and establishes that countries should implement financial sanction regimes. The United Nations Security Council Resolutions with which they should comply require to freeze without delay the funds or other assets of, and to ensure that no funds or other assets are made available, directly or indirectly, to or for the benefit of, any person or entity.

Recommendation 7 gives similar stipulations as regards the financial sanctions related to the proliferation of weapons of mass destruction, making reference to the United Nations Security Council Resolutions on prevention, suppression and disruption of the proliferation of weapons of mass destruction and its financing.

Finally, the FATF Recommendation 8 on FT and proliferation of weapons focuses on the role of non-profits organizations and establishes that countries should review the adequacy of the laws and regulations related to such organizations which they have identified as being vulnerable to terrorist financing abuse, and should establish measures to protect them from said abuse.

G5 Integritas can help you with the design, implementation and independent review of your AML/ CFT compliance program. Do not hesitate to contact us at info@g5integritaslatam.com

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