money laundering best practices, lessons to be learnt and steps

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According to the Law, subjects are obliged to register cash and non-cash transactions exceeding 2million leke, or any cash and non-cash transactions when there is a suspicion of moneylaundering.The Law obliges attorneys, notaries, and representatives with power of attorney to report to theresponsible authority all transactions in cash and or transfers of funds for amounts greater thanLek 70.000.000 (seventy million) or the counter value in foreign currencies. They should notifythe Responsible Authority when they come into possession of information that either confirms ornegates the suspicion. 49All subjects of the Law must retain the data, information and reports of transactions performed onbehalf of the customers for a period of not less than 5 years from the date the customer terminatescivil and juridical relations with the subject or after the transaction has taken place. The Law doesnot prescribe the period of record keeping after account closing. 50In 2000, Moneyval team of evaluators recommended to the Customs authorities to take a moreproactive and dedicated role in money laundering investigations, i.e. more systematicallyexpanding their own investigations into the economic dimension of crimes within theircompetence and by detecting illegal proceeds in relation to money laundering. One of the biggestareas for improvement according to Moneyval is the introduction of a central police databasewhich would also be beneficial in cases concerning financial crime and money laundering.Until 2004 only one conviction for money laundering has been reached. Under the currentreporting regime by 2004 the FIU received a total of 265 reports, 68 STR’s and 197 CTR’s. Ofthe 265 reports, 36 reports were passed to the police and 8 reports directly to the prosecutor’soffice. Surprisingly, a relatively low percentage is passed on for further investigation. 51As reported in the international press Albania’s five largest commercial banks have installedspecial software to help detect money laundering. It allows suspicious transactions to be verifiedin real time, thus reducing delays in the investigation of suspicious accounts. The financeministry expected the software to be installed in all the country's banks by the end of 2006 butthere is no information on it.49Art 5 of the Law on the Prevention of Money Laundering of Albania50Art 6 of the Law on the Prevention of Money Laundering of Albania51Moneyval Third Round Detailed Assesment Report on AlbaniaMoney Laundering Best Practices,Lessons to be Learnt in the Balkan RegionWritten by Tamara BrneticPage 47 of 58
PONZI’S SCHEMESOne of the very common frauds in the Balkan Region in the 90’s were so called pyramidstructures that draw their origin from the Charles Ponzi scheme which he created and started inBoston in 1920. In his pyramid scheme Ponzi promised to his investors more than 200 % ofannual profit.The scheme was elaborated in a way that Ponzi’s agents were supposed to exchange dollarscollected from investors into European currencies, and then purchase mail coupons for thatmoney. These coupons would be exchanged back to dollars once in the USA. Everything startedbig when first investors confirmed 50 % profit in only 45 days...Charles Ponzi attracted 40.000 investors amounting in total 15 million USD. There was anenormous interest of potential investors to the extent that people were selling their properties andinvesting their life savings, as we shall see happening in the Balkans 70 years later.Although Ponzi was celebrated as the benefactor, several months later there were some criticalarticles in the “Boston Post”. Investors were still interested in the “Securities Exchange Co” andMr. Ponzi was still paying out interests and initial deposits, which was not a problem at the time,as most of the investors were reinvesting their initial deposits.In July 1920 Richard Groazier started a series of articles in Boston Post proving that Ponzi'ssystem will collapse at some stage. These reports in which mathematicians and other expertscontributed to the court decision that Ponzi was not allowed to receive new deposits and that thewhole situation had to be checked.Federal Mail system proved that Ponzi could not have such profits as there were not enough mailcoupons in the float. Ponzi tried to pull out of that saying that profits were coming from twocompanies that he had purchased in the meantime and that the story about coupons was just tofool the competition.Although Ponzi was still paying out the interest rates, investors became discouraged when it wasdiscovered that he had sat in jail for frauds in Canada and the USA. Soon after that, there was acomplete collapse of the empire and there were a large number of investors in total despair. Ponziwas jailed and released only in 1934 to be immediately deported to Italy. 5252Sonja Cindori, Sustav spriječavanja pranja novca, 2004Money Laundering Best Practices,Lessons to be Learnt in the Balkan RegionWritten by Tamara BrneticPage 48 of 58
Page 1 and 2: Money Laundering Best Practices, Le
Page 3 and 4: INTRODUCTIONThere is a saying that
Page 5 and 6: Historically, money laundering beca
Page 7 and 8: promotion of the rule of law has to
Page 9 and 10: MONEYVALMoneyval was formerly known
Page 11 and 12: purchases. There were import/export
Page 13 and 14: Croatia has a preventive system est
Page 15 and 16: In a well known case which took pla
Page 17 and 18: Proceedings and Law on Office for P
Page 19 and 20: However, the Law does not provide f
Page 21 and 22: The last amendments of the Law on P
Page 23 and 24: Croatian Law on Prevention of Money
Page 25 and 26: duties they suspect that transactio
Page 27 and 28: Pursuant to Recommendation No 27, C
Page 29 and 30: the condition of reciprocity. Croat
Page 31 and 32: Croatia is in full compliance with
Page 33 and 34: there is no information on independ
Page 35 and 36: overwhelming model of creation of o
Page 37 and 38: Bosnia also has a wide spread probl
Page 39 and 40: On 19 November 2003, the Macedonian
Page 41 and 42: antiquities, theft of cargo of a ve
Page 43 and 44: about unusual transactions from a v
Page 45 and 46: abroad to the account of an offshor
Page 47: prostitution, trafficking in weapon
Page 51 and 52: foreign currency debt amounts to DM
Page 53 and 54: POSSIBILITIES FOR MONEY LAUNDERERS
Page 55 and 56: to launder monthly, so he starts to
Page 57 and 58: work abroad bring the money into th
Page 59: 24. http://www.vreme.com/cms/view.p

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