In September 2018, StAR published “Financial Intelligence Units Working With Law Enforcement”, to support the implementation of the international anti-money laundering/countering financing of terrorism (AML/CFT) standards promulgated by the Financial Action Task Force (FATF) and other international organizations, and to propose good practices in cooperation among financial intelligence units (FIUs), law enforcement agencies and prosecutors (LEAs). The publication is based on a joint study by StAR, the Egmont Group, and United Nations Office on Drugs and Crime - Global Programme against Money Laundering (UNODC GPML).
Financial intelligence is collected by both public and private organizations to investigate money laundering, associated predicate offences (such as corruption), and terrorist financing. Most countries establish FIUs in compliance with the FATF1 Recommendations2 and other international AML/CFT standards as central national agencies responsible for receiving suspicion transaction reports and other information from financial institutions and other reporting entities (e.g., casinos, precious gem dealers, and real estate brokers). The FIUs conduct analysis and disseminate their analysis to authorities (typically, LEAs and foreign FIUs) to combat money laundering and terrorist financing. FIUs have been established in more than 160 jurisdictions and, as of September 2018, FIUs from 159 jurisdictions have been admitted to the Egmont Group.3 The latest countries to have joined Egmont are Azerbaijan, Republic of Congo, Benin and Zambia.
FIUs may be helpful partners for asset recovery practitioners in initiating a case and conducting an investigation. Where their analysis indicates money laundering or other criminal activity, FIUs will proactively provide intelligence reports to LEAs or to foreign FIUs. Most FIUs maintain a central database of all Suspicious Transaction Reports (STRs), Currency Transaction Reports (CTRs), cross-border currency reports, intelligence reports, and any queries received from LEAs or foreign FIUs. Such intelligence may be used by LEAs to understand the activities of an investigation’s targets, identify associates, and form links with the investigations of other agencies. With their expertise of financial services and products, money laundering typologies, and analysis of financial records and flows, FIU analysts may be a helpful resource in financial investigations. Finally, some FIUs have the power to administratively freeze funds for a brief period, allowing practitioners to preserve assets prior to obtaining a formal court order.
In many jurisdictions, the level of cooperation between FIUs and LEAs could be significantly improved. StAR’s new publication examines how the FIUs and LEAs cooperate with one another and identifies the impediments to their closer cooperation. Based on findings among a survey of FIUs and LEAs, and extensive consultations, the publication sets forth practical solutions to improve cooperation and the effective management of financial intelligence. In addition, the publication presents recommendations for policy makers to improve their policies related to the cooperation among FIUs and LEAs. The publication is available on the StAR website.
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[1] The FATF is an intergovernmental body established by the ministers of its member jurisdictions. The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system. See http://www.fatf-gafi.org/about/.
[2] See FATF Recommendation 29 and the related Interpretative Note.
[3] The Egmont Group was established in 1995 as an informal international association of FIUs. Its goal is to provide a forum for FIUs around the world to improve cooperation in the fight against money laundering and financing of terrorism and to foster the implementation of domestic programs in this field. Egmont Group members are FIUs that comply with the criteria of the Egmont Group. See http://www.egmontgroup.org.
