1. State Bank of Pakistan National Seminar on Anti-Money Laundering and Counter Terrorist Financing
Anti-Money Laundering and Terrorist Financing Activities in the Asia/Pacific Region
Rick McDonell
Head, Asia/Pacific Group on Money Laundering (APG) Secretariat
Islamabad
29 March 2005
The Asia/Pacific Group on Money Laundering (APG)

2. The Asia/Pacific Group on Money Laundering (APG)
Introduction
The APG
Regional challenges in combating money laundering and terrorism financing
Regional vulnerabilities – typologies
Risks of not responding
Meeting the challenges
The Asia/Pacific Group on Money Laundering (APG)

3. The Asia/Pacific Group on Money Laundering (APG)
The APG
The APG is the FATF-style regional body for the Asia/Pacific region.
The APG does not set the standards against money laundering and terrorist financing.
Those standards are global and are set by the FATF in their Recommendations.
The APG’s main roles are the implementation of the AML/CFT global standards and the regional assessment of compliance.
The Asia/Pacific Group on Money Laundering (APG)

4. The Asia/Pacific Group on Money Laundering (APG)
The APG
As an essential part of its role, the APG coordinates AML/CFT technical assistance and training across the Asia/Pacific region.
The APG also works closely with other international and bodies involved in various legal, financial regulatory and law enforcement aspects of AML/CFT.
The APG undertakes typologies work to study methods and trends of money laundering.
The Asia/Pacific Group on Money Laundering (APG)

5. The Asia/Pacific Group on Money Laundering (APG)
APG Members
The APG presently consists of 28 members:
Australia Marshall Islands, Republic of the
Bangladesh Mongolia
Brunei Darussalam Nepal
Cambodia New Zealand
Chinese Taipei Niue
Cook Islands Pakistan
Fiji Islands Palau
Hong Kong,China Philippines
India Samoa
Indonesia Singapore
Japan Sri Lanka
Korea, Republic of Thailand
Macau,China United States of America
Malaysia Vanuatu
The Asia/Pacific Group on Money Laundering (APG)

6. The Asia/Pacific Group on Money Laundering (APG)
New members expected in 2005:
Canada Myanmar
Lao PDR Vietnam
The Asia/Pacific Group on Money Laundering (APG)

7. APG RELATIONSHIPS WITH INTERNATIONAL AND REGIONAL ORGANISATIONS
APEC
Asia/Pacific Economic
Cooperation
ASEAN
Association of
South East Asian Nations
ARF
ASEAN Regional
Forum
ASEM
Asia Europe
Meetings
ADB
Asian
Development Bank
IMF
International
Monetary Fund
APG
Asia/Pacific Group on
Money Laundering
EGMONT
GROUP
OF FIU’s
THE
WORLD
BANK
WCO
World Customs Organisation
UNODC
United Nations Office on Drugs & Crime
OCO
Oceania Customs Organisation
Pacific Islands Forum
UNCTC
United Nations Counter Terrorism Committee
APG Observers
The Asia/Pacific Group on Money Laundering (APG)
Key:

8. Regional Challenges in AML/CFT
Specific vulnerabilities include:
Relatively low institutional capacity
Corruption (particularly in developing countries)
Major drug producing centres in region
High use of alternative remittance systems
Extensive use of cash and high value items
Serious terrorist activity and on-going threats
The Asia/Pacific Group on Money Laundering (APG)

9. The Asia/Pacific Group on Money Laundering (APG)
Low levels of institutional capacity
Large number of developing countries in the region
Diversity in the levels of institutional development across the region
Many countries are working hard to develop legal and governance structures
The Asia/Pacific Group on Money Laundering (APG)

10. The Asia/Pacific Group on Money Laundering (APG)
Corruption
Corruption generates enormous profits to be laundered
Corruption is a key factor in both predicate criminal activities and money laundering
Systemic corruption undermines regulatory and legislative AML/CFT regimes
Systemic corruption undermines institutional development
The Asia/Pacific Group on Money Laundering (APG)

11. The Asia/Pacific Group on Money Laundering (APG)
Major drug production centres
and trafficking points in the region
Heroin, opium, amphetamine type substances (including precursor chemicals), ecstasy, cannabis
Increasing domestic drug consumption within Asia, particularly heroin & amphetamine type stimulants.
Major drug transport ‘hubs’ and drug distribution points
The Asia/Pacific Group on Money Laundering (APG)

12. The Asia/Pacific Group on Money Laundering (APG)
Significant levels of other
profit-driven crime
People smuggling and human trafficking
Arms trafficking
Fraud
Smuggling
Other profit driven crimes – eg Illegal logging
The Asia/Pacific Group on Money Laundering (APG)

13. The Asia/Pacific Group on Money Laundering (APG)
High use of cash and alternative
remittance systems (ARS)
ARS has a legitimate role in many countries to remit monies to/from developing countries
Cash economies and large ARS sectors are highly vulnerable to exploitation for money laundering and terrorist financing
Cash couriers seen as a particular vulnerability
Cash economies and ARS reflects relatively low levels of trust in regulated financial sector
The Asia/Pacific Group on Money Laundering (APG)

14. The Asia/Pacific Group on Money Laundering (APG)
Cash and alternative remittance
systems typologies
Use of informal channels (ARS and cash / gold smuggling) is a common typology to remit money - often mingling legitimate remittances and ‘black’ monies
ARS and cash couriering linked to other trade-based money laundering typologies
The Asia/Pacific Group on Money Laundering (APG)

15. The Asia/Pacific Group on Money Laundering (APG)
Serious terrorist activity &
on-going terrorists threats
Terrorist acts occurring across the region
High use of informal channels for terrorist financing (especially ARS & cash couriers)
Terrorists using non-profit organisations for raising and moving terrorist funds
Terrorists identifying and exploiting ‘weak link’ economies
The Asia/Pacific Group on Money Laundering (APG)

16. Risks of non-compliance
Increased criminal and terrorist
activity
Stability of the banking system
& reputation damage
Negative economic effects
Sanctions / threat of actions by the international community
Weak links attract money launderers and terrorists
National security issues
The Asia/Pacific Group on Money Laundering (APG)

17. The Asia/Pacific Group on Money Laundering (APG)
APG Regional Progress
AML Laws
In 1995, 5 jurisdictions
In 2005, over 30 jurisdictions
FIUs
In 2005, 17 APG member or observer jurisdictions have an established FIU
The Asia/Pacific Group on Money Laundering (APG)

18. Meeting the Challenges
APG Mutual Evaluations
Provide peer reviews of compliance with the global standards by relevant experts from member countries’ legal, financial and law enforcement systems
Includes suggesting areas for improvement and technical assistance through mutual feedback
The Asia/Pacific Group on Money Laundering (APG)

19. Meeting the Challenges Capacity Building
Technical Assistance and Training
Regional coordination role for AML/CFT through the APG Donor & Provider Group
Resources such as model laws, training programs, mentoring etc
Country projects via multilateral & bilateral cooperation
Regional projects involving e.g. ADB, IMF, World Bank, UNODC, Commonwealth Secretariat
The Asia/Pacific Group on Money Laundering (APG)

20. Meeting the Challenges
Regional linkages to global initiatives
Maintaining close links with the international community
Keeping members up to date with international standards
Participating in global standard setting
Engaging in typologies research of methods and emerging trends – eg APG has an ongoing Typologies Working Group and an Annual Typologies Workshops of money laundering experts
Proposed Regional Workshop
The Asia/Pacific Group on Money Laundering (APG)

21. The Asia/Pacific Group on Money Laundering (APG)
Useful websites
For more information on AML/CFT visit:
APG -
FATF -
UNODC Global Programme Against Money Laundering -
The Egmont Group of FIUs -
The Asia/Pacific Group on Money Laundering (APG)

22. Useful sources for typologies information
APG typologies reports
FATF typologies reports
Egmont Group of FIUs – 100 Case Studies
International Narcotics Control Strategy Report (INCSR) 2005
The Asia/Pacific Group on Money Laundering (APG)

23. For more information contact the APG Secretariat via mail@apgml.org
The Asia/Pacific Group on Money Laundering (APG)