International institutions and groups engaged in the combat of money laundering and terrorist financing

Published: 25/5/2015 Modified: 17/2/2021
The United Nations (UN) began the combat against money laundering by adopting conventions, and it directs its combat against terrorism by resolutions of its Security Council. All countries in the world are gradually transposing such documents into their legal systems. By the establishment of the International Money Laundering Information Network (IMoLIN), the UN connects and encourages other international organisations to cooperate in the joint combat against money laundering and terrorism. In addition to conventions, the EU adopts directives which are the source of legislation for the Republic of Croatia. Directives are aligned with the recommendations of the Financial Action Task Force (FATF), the most important international body for the introduction of standards concerning measures, procedures and recommendations for an active involvement and assessment of the anti money laundering and terrorist financing system. The FATF acts through regional bodies. MONEYVAL is one of them, and the Republic of Croatia is its member. MONEYVAL periodically evaluates the system of prevention of money laundering and terrorist financing of its members and publishes reports. The latest country report for the Republic of Croatia was in 2013. Council of Europe Committee on Counter-Terrorism (CDCT) is a special Committee of the Council of Europe that publishes reports on counter-terrorism measures implemented by each of the countries, while the Wolfsberg Group, which comprises eleven leading global banks, is useful to the financial sector because it issues guidelines for the prevention of money laundering and terrorist financing in different segments of banking services industry.

Money laundering and terrorist financing is globally detrimental, even disastrous for some economies. For this reason, many international institutions and groups are constantly dealing with the problem of money laundering and lately increasingly with the problem of terrorist financing, maintaining an intensified cooperation.

At the very beginnings of combating money laundering the United Nations (UN) adopted the United Nations Convention against illicit traffic in narcotic drugs and psychotropic substances, which was ratified for the Republic of Croatia in 1990. It was followed by many others in related areas, e.g. in transnational organised crime, corruption and others. An overview of the UN Conventions (An overview of the UN Conventions and Other International Standards Concerning Anti-Money Laundering and Countering the Financing of Terrorism) was issued in Vienna in January 2007. The International Money Laundering Information Network (IMoLIN) is an international organisation established in 1998 by the United Nations on behalf of a partnership of international organisations involved in the prevention of money laundering and financing of terrorism. The IMoLIN collects information on national anti money laundering and financing of terrorism laws and identifies areas for improvement in these laws and international cooperation.

For the European Union more recent conventions include the Convention on Cybercrime from 2002 and the Council of Europe Convention on laundering, search, seizure and confiscation of the proceeds from crime and on the financing of terrorism from 2005.

However, the most important for this area is Directive (EU) 2015/849 of the European Pariliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC (Text with EEA relevance) (OJ L 141, 5.6.2015.). Following is Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU (Text with EEA relevance) (OJ L 156, 19.6.2018.).
These directives have been transposed into the Croatian legislative framework within the Anti Money Laundering and Terrorist Financing Law and its subordinate legislation - ordinances.

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The Financial Action Task Force (FATF) is an international body established in Paris in 1989 at the meeting of G-7 countries whose task is to monitor the implementation of measures for the prevention of money laundering and terrorist financing. The FATF mandate up to 2020 includes the introduction of standards for combating money laundering, terrorist financing, the financing of proliferation of weapons of mass destruction, assessing compliance with the FATF standards, identifying threats to the integrity of the international financial system and responding to them through studying high risk jurisdictions and typologies. 37 jurisdictions and 2 regional authorities are members of the FATF. The Recommendations issued by the FATF represent the standards for combating money laundering and terrorist financing at a global level.

FATF is organised in more detail through eight regional bodies, which operate in the same way as the FATF world organisation. These regional bodies are Asia/Pacific Group on Money Laundering (APG), Caribbean Financial Action Task Force (CFATF), Eurasian group on combating money laundering and financing of terrorism (EAG), Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), Intergovernmental Action Group against Money-Laundering in Africa (GIABA), Financial Action Task Force on Money Laundering in South America (GAFILAT), Middle East and North Africa Financial Action Task Force (MENAFATF) and Council of Europe Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures (MONEYVAL), with Croatia as its member.

This Council of Europe Select Committee of Experts on the Evaluation of Anti-Money Laundering Measures, MONEYVAL, established in 1997 and responsible for monitoring the implementation of measures for the prevention of money laundering and terrorist financing comprises 30 countries and a large number of observers including representatives of FATF member states, the World Bank, the International Monetary Fund, the European Union, Interpol, the European Bank for Reconstruction and Development and others.

In November 2012, a team of MONEYVAL experts paid a visit to Croatia in the context of the 4th round of evaluations. In contacts with government and private sector representatives, the evaluators gathered information to evaluate compliance of the Croatian legislation and its implementation in the field of prevention of money laundering and terrorist financing, while assessing the level of compliance with the FATF recommendations. Based on their findings, they prepared the 4th Round Evaluation Report on Croatia which was adopted at MONEYVAL's 42nd plenary session held in Strasbourg in September 2013. All Evaluation reports on the Republic of Croatia with accompanying Progress Reports (2000, 2003, 2008 and 2013) are available to the public on the official MONEYVAL website.

The Council of Europe Committee on Counter-Terrorism (CDCT), formerly called the Committee of Experts on Terrorism (CODEXTER), is an intergovernmental body coordinating the Council of Europe's action against terrorism. Based on the principles of prevent, prosecute and protect, the CDCT is tasked with developing appropriate and practical soft law instruments such as recommendations and guidelines for member States to consider and apply in the fight against terrorist activity. Some of the CDCT’s main priorities are developing a Council of Europe Counter-Terrorism Strategy 2018-2022, addressing the phenomena of foreign terrorist fighters and returnees, the use and abuse of the internet by terrorists, the roles of women and children in terrorism, links between terrorism and organised crime . CDCT also provides a platform for country profiles on legislative and institutional counter-terrorism situation in member States, and helps exchange best practices and promote the effective implementation of Council of Europe instruments applicable to the fight against terrorism.

The Wolfsberg Group is an association of eleven leading global banks: ABN AMRO, Banco Santander, Bank of Tokyo-Mitsubishi-UFJ, Barclays, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, J. P. Morgan Chase, Société Générale and UBS. The Wolfsberg Group came together in 2000 in Switzerland with the aim of developing and promoting banking services industry standards and related products. The Group issued the Wolfsberg Anti-Money Laundering Principles for Private Banking in 2000 (revised in 2002 and 2012), subsequently accepted as banking industry standards. The Group also issues other guidelines related to the prevention of money laundering and terrorist financing in the area of correspondent banking, private banking, access based on risk assessment and in other areas, e.g. Wolfsberg Guidance on Mobile and Internet Payment Services (MIPS).