Financial Crime World

Title: Bhutan’s Anti-Money Laundering Measures: APG Evaluates Progress Towards Compliance

Background

  • Asia-Pacific Group on Money Laundering (APG) evaluates Bhutan’s progress in addressing technical compliance deficiencies identified in the Mutual Evaluation Report (MER) on Bhutan’s anti-money laundering (AML) and countering the financing of terrorism (CFT) measures, adopted in September 2016.
  • Bhutan committed to implementing internationally accepted AML, CFT, and proliferation financing standards set by the Financial Action Task Force (FATF).

Assessment Scope and Process

  • This report does not analyze Bhutan’s progress in improving effectiveness. Instead, it evaluates the progress made in addressing the technical compliance deficiencies.
  • Experts Jack Matthews from the Attorney General’s Department in Australia and Sarunlarp Sopanik from the Anti-Money Laundering Office in Thailand conducted the assessment.

Bhutan’s Improvements

Recommendation 4 - Criminalization of Predicate Offenses

  • Bhutan was initially rated Partially Compliant (PC) in the MER for Recommendation 4.
  • Following improvements in criminalizing some categories of predicate offenses and asset forfeiture mechanisms, Bhutan has been re-rated to Largely Compliant (LC).

Recommendation 7 - Implementing Effective Sanctions

  • Bhutan was initially rated PC for Recommendation 7 in both its MER and the 2018 Follow-Up Report (FUR).
  • Later efforts resulted in Bhutan being re-rated to LC due to the issuance of AML/CFT Regulations 2022.
  • This set out requirements for reporting entities to update a sanctions database and implement screening and freezing measures without delay.

Current Status - Further Improvements Required

  • Bhutan has strengthened its legal framework and implemented powers for freezing, seizing, managing, and confiscating proceeds and instruments of crime.
  • However, minor gaps remain, including:
    • Limited powers to confiscate property, proceeds or instrumentalities related to foreign maritime piracy, counterfeiting, and proliferation financing crimes.

Conclusion

  • APG’s sixth follow-up report suggests that Bhutan has made significant improvements in its AML/CFT measures, but further attention and dedicated efforts are required to achieve full compliance with internationally accepted standards.