Money laundering through money remittance ... - Council of Europe

Money Laundering through Money Remittance and Currency Exchange Providers - 2010
EXECUTIVE SUMMARY
1. This joint FATF/MONEYVAL report contains information on money laundering and
terrorist financing methodologies associated with the money remittance and currency exchange sector.
The findings contained in the report derive from information provided by 61 FATF, MONEYVAL and
Egmont Group member States and other open source material. Though the focus of the report is to a
certain degree on the MONEYVAL region and the wider European area, the experience of countries
from other regions of the world was actively sought and integrated into the report.
2. Apart from providing a useful general overview of the sector of money transfer remittances
and currency exchange providers, the regulatory framework, the supervision and sanctioning regimes,
the report sets out identified money laundering and terrorist financing methods and techniques
involving money remittance and currency exchange providers.
3. Several case studies described in this report illustrate that money remittance and currency
exchange businesses have been both witting and unwitting participants in laundering activities, in all
three stages of the process (placement, layering and integration), and in certain instances, for terrorist
financing purposes. The identified risks of ML/TF through the sector detailed in the report are related
to clients, owners or agents. The cases highlight also the links between money laundering in the
money remittance sector and other criminal activities (e.g., fraud, trafficking in human beings,
smuggling, drug trafficking, economic crime).
4. A number of vulnerabilities to money laundering across the sector that make up the money
remittance and currency exchange sector were identified. The analysis of the case studies and other
materials enabled the project team to compile numerous examples of indicators of potential money
laundering activities related to transactions, customer profile and behaviour as well as specific
indicators for bureaux de change and money remittance providers that may help the industry to
identify and describe suspicious behaviours and protect themselves against money launderers and
other criminals.
5. Clearly, laundering through money remittance and currency exchange providers poses a
number of regulatory and enforcement challenges. At the same time, it was observed that there is low
detection of money laundering in comparison to the size of the industry as a whole. The money
laundering and terrorist financing threat in the sector not only results from direct penetration of
criminals into operations of money remittance or currency exchange providers. The absence or lax
implementation of AML/CFT standards and adequate related policies provide opportunities which are
being exploited by money launderers and other criminals.
6. Finally, the report maps also a number of issues and areas which were identified in this
context as appearing to require additional efforts, both from regulatory and supervisory authorities as
well as from the industry, in order to reduce the misuse of the sector and ensure that ML/TF risks are
adequately addressed. These issues will likely require further investigation together and updating
research, not only to continue the development of a better understanding of specific money laundering
and terrorist financing risks in the money remittance and currency exchange sector but also to ensure
that regulatory responses are proportionate and effective.
© 2011 MONEYVAL and FATF/OECD - 7