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Exchange or any transfer of money or other property originating from criminal offence; Exchange or any transfer of money or other property originating.

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Presentation on theme: "Exchange or any transfer of money or other property originating from criminal offence; Exchange or any transfer of money or other property originating."— Presentation transcript:

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2 Exchange or any transfer of money or other property originating from criminal offence; Exchange or any transfer of money or other property originating from criminal offence; Concealment of illegally acquired property and capital obtained by privatization of state capital. Concealment of illegally acquired property and capital obtained by privatization of state capital. Acquisition, possession or use of money or other property proceeding from criminal offence ; Acquisition, possession or use of money or other property proceeding from criminal offence ; Concealment of the true nature, origin, place where the money is deposited, movement, use, ownership or rights concerning money or other property originating from criminal offence; Concealment of the true nature, origin, place where the money is deposited, movement, use, ownership or rights concerning money or other property originating from criminal offence;

3 Provision or gathering, i.e. attempted provision or gathering of money or other property, direct or indirect, with the aim or knowing that it will be, entirely or partially, used to conduct a terrorist act or used by a terrorist or a terrorist organization; Inciting or assisting in the provision or gathering of funds or property.

4 Out of 300 billion$ billion come from drugs US Congress Bulletin, July 1997) Out of 1 trillion $ billion come from drugs (Interpol, Sept. 1997) 2 – 5 % of world GDP (FATF)

5 Sectors Particularly at Risk: Banking sector Capital market Real estate market Markets in valuable products (cars, yachts, art works etc.) Insurance business Gambling houses Investment construction Import-export business Industries that may serve as cover up (tourism and hospitality)

6 Ways to Combat Money Laundering: Adoption of all international standards in this field; Development of an internal system for combating money laundering; Full cooperation with international actors that belong to the AML system, especially those from the region.

7 THE NATIONAL SYSTEM FOR COMBATING MONEY LAUNDERING AND TERROSRISM FINANCING consists of: AML Administration; AML Administration; Reporting entities; Reporting entities; Supervisory agencies (Central Bank, Securities Commission, Department for Games of Chance etc); Supervisory agencies (Central Bank, Securities Commission, Department for Games of Chance etc); Customs Administration; Customs Administration; Tax Administration; Tax Administration; Police Department; Police Department; National Security Agency; National Security Agency; Prosecutors Office; Prosecutors Office; Courts Courts

8 Montenegrin AML Administration - Formally started operation in February July, 2004 – operative beginning (start of reporting) (start of reporting)

9 Organization and Functioning An independent administrative authority An independent administrative authority An administrative type of FIU An administrative type of FIU In compliance with FATF recommendations In compliance with FATF recommendations

10 DIRECTOR Analytics Dept Independent Advisor I Senior Advisor I Senior Advisor II Senior Advisor III Suspicious Transactions Dept Independent Advisor I Senior Advisor I Senior Advisor II Senior Advisor III International and National Cooperation Dept Independent Advisor I Senior Advisor I Senior Advisor III Reporting Entity Control Dept Chief Iinspector Inspector I Inspector III IT and Data Reception Dept Independent Advisor I Senior Advisor III Employee VI Authorized Officer for Managing Misdemeanor Procedure III General Affairs, Finance and PR office Independent Employee II I Senior Employee I Employee VI Employee IV Employee VI DEPUTY ADVISOR

11 Legal Grounds Law on the Prevention of Money Laundering (Official Gazette of RM, no. 55/03), effective as of 8 October, 2003 Law on the Prevention of Money Laundering (Official Gazette of RM, no. 55/03), effective as of 8 October, 2003 Law on the Prevention of Money Laundering and Terrorism Financing (Official Gazette of RM, no.14/07), effective as of 21 December, 2007 Law on the Prevention of Money Laundering and Terrorism Financing (Official Gazette of RM, no.14/07), effective as of 21 December, 2007

12 Reporting Entities 1 ) Banks and branch offices of foreign banks and other financial institutions; 2) Savings banks and savings and loan institutions; 3) Organizations that perform payment operations; 4) Post offices; 5) Investment fund managing companies and branch offices of foreign investment fund managing companies; 6) Pension fund managing companies and branch offices of foreign pension fund managing companies ; 7) Stock brokers and branch offices of foreign stock brokers; 8) Insurance companies and branch offices of foreign insurance companies that provide life insurance; 9) Organizers of traditional and special games of chances; 10) Exchange offices; 11) Pawn shops; 12) Auditing companies, independent auditor and legal or physical persons that provide accounting services and tax advice; 13) Companies that issue e-money; 14) Charities, NGOs and other non-profit organizations.

13 15) Other businesses, legal persons, entrepreneurs and physical persons that perform the following activities or operations: - Selling and buying claims; - Factoring; - Managing property on behalf of third parties; - Issuance of pay and credit cards and card transactions;; - Financial leasing; - Travel organization; - Real estate transactions; - Trade in motor vehicles; - Trade in vessels and aircraft; - Safe-deposit box services; - Issuance of guarantees and other warranties; - Lending and lending intermediation; - Granting loans and intermediating in closing lending transactions; - Intermediation or representation in life insurance business; - Organizing and conducting, trade in art works, precious metals, and stones and products made of precious metals and stones, as well as other commodities, if payment of 15,000 Eur or more is made in cash, in one or more related transactions.

14 Banks are key reporting entities under the Law on the Prevention of Money Laundering and Financing of Terrorism, because : Money, including dirty money, mainly circulates through the banking channels. Highly qualified staff and good equipment enable early detection of unusual transaction patterns. Their records are complete and available; they provide for prompt reconstruction of individual transactions and can provide evidence for prosecution.

15 Key role and responsibility of banks in combating money laundering, through : Preventing dirty money from entering the system; Preventing money laundering itself. BANK

16 It is necessary for the bank to completely realize its role in the AML system from the aspect of: Creating a favorable business environment; Preserving its own business reputation.

17 Once the bank realizes and accepts its role in the AML system, it then: Treats this activity as an integral part of the overall business activity, not as an extra burden, Does not feel the conflict between the main goal of maximizing income and profit and the measures that prevent entry of dirty money, which may imply sacrifice of charges and profit.

18 Reporting Officer The position of the reporting officer is the best indicator of the banks attitude towards the problem of money laundering and terrorism financing.

19 What does the FIU Possess, Who Can Use It and How? Database (contents) : 1. Data from regular reports of reporting entities: - Cash transactions over 15,000 euros and related transactions exceeding this amount in total, - All suspicious transactions regardless of the amount and type, - Data on persons (physical and legal persons that carried out the transactions above).

20 DATABASE (continued): 2. Data from additional reports of reporting entities: -All transactions of a specific person in a specific time period, - Transactions of all persons connected in some way with a specific person; 3. Data obtained from other state authorities; 4. Data obtained from foreign FIUs; 5. Data obtained from other sources.

21 Data collection system consists of: Database Links with databases

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23 Supplementary database (courts-property) (courts-property) Reporting entities databases Databases of other institutions Real Estate Administration Administrationdatabase Central Register of the Commercial Court Publicly available databases - Ministry of Interior and the Police Department, -Tax Administration, -Customs Administration, -National Security Agency -Databases of foreign FIUs -Open sources /Internet, media.../ FIU DATABASE

24 Links with Databases Direct access On request

25 The Procedure to Initiate and Process a Case Initiative: By a reporting entity, Analysis of own database, By another authority, By FIU.

26 Processing: Own database search, Search of supplementary database and public databases, Additional data on initial transaction from reporting entities, Additional data from reporting entities on the person in question, Data from other authorities: - Police, - Customs, - Tax authority Data from foreign FIUs.

27 Processing Dynamics Standard Accelerated (for temporary 72-hour blocking)- accelerating the concrete procedure General acceleration of the process – intelligence center model

28 8. of the Law on Prevention of Money Laundering Article 58. of the Law on Prevention of Money Laundering Request for information/data and forwarding information/data exclusively to competent state authorities of other countries and international organizations Reciprocity – condition for exchange Information/data may be used ONLY for analysis/intelligence purposes (further use exclusively with explicit FIU consent)

29 Cooperation with other State Authorities 23 July, 2004, Agreement on Cooperation - Ministry of Interior – 23 July, 2004, Agreement on Cooperation 5 Oct, 2004, Agreement on Cooperation - Tax Administration – 5 Oct, 2004, Agreement on Cooperation 20 Oct, 2004,Agreement on Cooperation - Customs Administration – 20 Oct, 2004, Agreement on Cooperation 19 July, 2005, Agreement on Cooperation - Basic Court, Podgorica - 19 July, 2005, Agreement on Cooperation 13 April, 2006, Agreement on Cooperation - Central Bank - 13 April, 2006, Agreement on Cooperation 21 June, 2006, Agreement on Cooperation - Securities Commission - 21 June, 2006, Agreement on Cooperation

30 International Cooperation 15 April, 2004, Agreement on Cooperation FIU Serbia - 15 April, 2004, Agreement on Cooperation 3 June, 2004, Agreement on Cooperation FIU Albania – 3 June, 2004, Agreement on Cooperation 19 April, 2005, Agreement on Cooperation FIU B&H - 19 April, 2005, Agreement on Cooperation 29 Oct, 2004, Agreement on Cooperation FIU Macedonia – 29 Oct, 2004, Agreement on Cooperation 7 Dec, 2004, Agreement on Cooperation FIC-UNMIK Kosovo - 7 Dec, 2004, Agreement on Cooperation 28 Dec, 2004, Agreement on Cooperation FIU Slovenia - 28 Dec, 2004, Agreement on Cooperation 25 March, 2005, Agreement on Cooperation FIU Croatia - 25 March, 2005, Agreement on Cooperation 11 April, 2006Agreement on Cooperation FIU Bulgaria - 11 April, 2006, Agreement on Cooperation 11 June, 2007, Agreement on Cooperation FIU Portugal - 11 June, 2007, Agreement on Cooperation 7 Sept, 2007, Agreement on Cooperation FIU Russi - 7 Sept, 2007, Agreement on Cooperation 15 Nov, 2007, Agreement on Cooperation FIU Poland – 15 Nov, 2007, Agreement on Cooperation

31 Delivery of Information under Articles 50 and 56 When the Administration determines that there are grounds to suspect money laundering When the Administration determines that there are grounds to suspect money laundering When the Administration determines that there are grounds to suspect another criminal offence When the Administration determines that there are grounds to suspect another criminal offence

32 Data Storage: - T imeframe - Security - Secrecy

33 New Law: Key Improvements Enhancing the pool of reporting entities (PEP, real owners ), Expanding the analytical approach with the reporting entities (due diligence ), Faster and more complete reporting (order for continuous account monitoring), Blocking upon international FIU requests, Inspection by the Administration, for a specific category of reporting entities.

34 Role in the System (Clear Distinction) Intelligence function Intelligence function Implementation of measures Implementation of measures

35 TOTAL NUMBER OF CASES PROCESSED AND REFFERRED TO COMPETENT STATE AUTHORITIES- POLICE DEPT/ PROSECUTOR (Article 26, par. 1 of AML Law – Grounds for suspecting the criminal offence of ML) 27 (2005) + 29 (2006) + 43 (2007) + 6 (2008) = 105 For other criminal offences / 13-notifications TOTAL NUMBER OF REPORTED SUSPICIOUS TRANSACTIONS ( ) 857 TOTAL NUMBER OF BLOCKED TRANSACTIONS ( ) 105 BLOCKED TRANSACTIONS – TOTAL AMOUNT ( )

36 AML system is one of the most recent sub-systems within the integrated security system (public and national)

37 Montenegro, as a developing and transition country, has fully applied the given standards in the development and operation of the AML and CFT systems.

38 THANK YOU FOR YOUR ATTENTION


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