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US International Narcotics Control Strategy Report 2007

The International Narcotics Control Strategy Report (INCSR) that was released last March is an annual report by the Department of State to Congress prepared in accordance with the Foreign Assistance Act. It describes the efforts of key countries to attack all aspects of the international drug trade in Calendar Year 2006.

Jérôme Turquey
Jérôme Turquey
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Copied bellow are the last paragraphs of the report relating to every financial center in the framework of this blog except Cyprius and Malta that are not analysed in the report.

The Government of Luxembourg has enacted laws and adopted practices that help to prevent the abuse of its bank secrecy laws, and it has enacted a comprehensive legal and supervisory anti-money laundering regime. However, further action should be taken to address the lack of a distinct legal framework for the financial intelligence unit. The financial intelligence unit staff should have its other judicial responsibilities curtailed and be freed to focus solely on financial crimes. Regarding regulations, Luxembourg should continue to strengthen enforcement to prevent abuse of its financial sector. Specifically, Luxembourg should pass legislation creating the authority for it to independently designate those who finance terrorism. Luxembourg should also enact legislation to address the continued use of bearer shares. Per FATF Special recommendation Nine, Luxembourg should initiate and enforce cross-border currency reporting requirements and the data should be shared with the financial intelligence unit. Luxembourg's anti-money laundering regime may be relying too heavily on the filing of suspicious transaction reports to generate investigations. Although Luxembourg has steadily enacted anti-money laundering and terrorist finance laws, policies, and procedures, the lack of prosecutions and convictions is telling, particularly for a country that boasts such a large financial sector.

The Government of Liechtenstein has made progress in addressing shortcomings in its anti-money laundering regime. It should continue to build upon the foundation of its evolving anti-money laundering and counterterrorist financing regime. Liechtenstein should become a party to the 1988 UN Drug Convention and the UN Convention against Transnational Organized Crime. Per FATF Special Recommendation Nine, Liechtenstein should require reporting of cross-border currency movements. The data should be shared with EFFI, the financial intelligence unit. Authorities should ensure that trustees and other fiduciaries comply fully with all aspects of the new anti-money laundering legislation and attendant regulations, including the obligation to report suspicious transactions. The EFFI should be given access to additional financial information. While Liechtenstein recognizes the rights of third parties and protects uninvolved parties in matters of confiscation, the government should distinguish between bona fide third parties and others. There appears to be an over-reliance on STRs to initiate money laundering and financial crimes investigations; Liechtenstein law enforcement entities should become more pro-active in this regard. The GOL should criminalize "negligent money laundering" and should publish the annual number of arrests, prosecutions, and convictions for money laundering.

The Government of Gibraltar should continue its efforts to implement a comprehensive anti-money laundering regime capable of thwarting terrorist financing. Gibraltar should put in place reporting requirements for cross-border currency movements. The GOG should pass legislation implementing the Financial Action Task Force's Nine Special Recommendations on Terrorist Financing. Gibraltar should also institute a regulatory scheme for its internet gaming sector in addition to its licensing regime. The GOG should work to implement the standards in the UN Convention against Corruption, the UN Convention against Transnational Organized Crime, and the UN Convention for the Suppression of the Financing of Terrorism.

The Government of Ireland should enact legislation to disallow the establishment of "shell" companies. Law enforcement should have a stronger role in identifying the true beneficial owners of shell companies as well as of trusts in the course of investigations. Ireland should increase the technical and human resources provided to the FIU in order to manage and evaluate STRs effectively. The GOI should enact legislation that covers funding of a terrorist acting alone and funding of two terrorists acting in concert, as well as legislation fully implementing UNSCR 1373. To this end, Ireland should remove the evidentiary requirements acting as obstacles to full compliance, as well as circulate the UN and the U.S. lists to its regulators and obligated entities.

Isle of Man officials should continue to support and educate the local financial sector to help it combat current trends in money laundering. The authorities should continue to protect the integrity of the Island's financial system by aggressively identifying, investigating, and prosecuting those involved with money laundering and other financial crimes. The Isle of Man should continue to work with international anti-money laundering authorities to deter financial crime and the financing of terrorism and terrorists.

The Bailiwick of Jersey has established an anti-money laundering program that in some instances exceeds international standards, and addresses its particular vulnerabilities to money laundering. However, Jersey should establish reporting requirements for the cross-border transportation of currency and monetary instruments, and set penalties for violations. Jersey should also take steps to force its obligated entities to obtain verification documents for customers preceding the 1999 requirements. The BOJ should introduce civil asset forfeiture, and implement its new corruption law. Jersey should also ensure that supervisory authorities exist to apply standards and regulations to its port activity and "exempt companies" that are identical to those used in the rest of the jurisdiction. Jersey should take steps toward a more proactive role in fighting terrorism financing by circulating the UNSCR 1267 list as well as other lists, instead of relying on the entities to research names through online public sources. Jersey should continue to demonstrate its commitment to fighting financial crime by enhancing its anti-money laundering/counterterrorist financing regime in these areas of vulnerability.

Monaco should amend its legislation to implement full corporate criminal liability. The Principality should continue to enhance its anti-money laundering and confiscation regimes by applying its AML reporting, customer identification, and record keeping requirements to all trustees, as well as Monegasque gaming houses. Monaco should also eliminate the ability to open and maintain accounts using an alias, and banks should include their cashiers in customer identification responsibilities. Monaco should become a party to the UN Convention against Corruption. SICCFIN should have the authority to forward reports and disseminate information to law enforcement even when the report or information obtained does not relate specifically to drug trafficking, organized crime, or terrorist activity or financing.

The United Kingdom should develop legislation and implementing regulations to ensure that the gaming and betting industries are completely covered in the same manner as the financial and designated nonfinancial businesses and professions. This should include a legal requirement to disclose suspicious transactions rather than relying on the industries' own codes of practice. In addition, authorities should track and examine the effects of the SOCAP change regarding acts and assets in or from foreign jurisdictions, and revisit this legislation to determine whether it has been effective, or whether it has enabled exploitation.

Jérôme Turquey Jérôme Turquey - Ethiques et gouvernance des places financières

Lundi 5 Novembre 2007

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