Financial Crime World

Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) Measures in Bhutan

Key Findings:

The Asia-Pacific Group on Money Laundering has assessed the AML/CTF measures in Bhutan, highlighting several key findings:

  • Indian Insurgent Groups (IIGs) and Radical Groups (RGs): There is no evidence that IIGs and RGs receive support from within Bhutan or use the country’s banking system.
  • Al Qaeda, Taliban, and Islamic State in Iraq and the Levant (ISIL): No reported or identified instances of these groups’ activities in Bhutan have been found.
  • Money Laundering (ML) Risks: Corruption and bribery are the top proceeds generating crime, with some authorities exhibiting satisfactory levels of understanding.
  • Terrorist Financing (TF) Risks: Key authorities demonstrated a sound understanding of terrorist threats, but not all competent authorities or reporting entities exhibited such awareness.
  • National Strategy: No comprehensive national strategy to address ML/TF in Bhutan exists, although the country has a draft National Strategy and Action Plan.
  • Financial Intelligence: Financial intelligence is not being used to initiate ML/TF or predicate crime investigations, and the FIU conducts limited operational analysis and no strategic analysis.
  • Sanctions: Sanctions applied in two ML convictions in 2008 cast doubt on their dissuasive effect.

Recommendations:

To address these findings, several recommendations have been made:

  1. Improve Understanding of ML Risks: Enhance the understanding of ML risks, including the use of new technologies and trends.
  2. Enhance Investigative Capacity: Strengthen investigative capacity to address complex cases and improve TF offence.
  3. Develop National Strategy: Develop a comprehensive national strategy to address ML/TF threats.
  4. Implement Financial Intelligence: Implement financial intelligence to support ML/TF investigations.
  5. Strengthen Sanctions: Strengthen sanctions to ensure their dissuasive effect.

Action Plan:

The report outlines an action plan for Bhutan, including:

  1. Develop a National Strategy: Develop a comprehensive national strategy to address ML/TF threats.
  2. Enhance Investigative Capacity: Strengthen investigative capacity to address complex cases and improve TF offence.
  3. Implement Financial Intelligence: Implement financial intelligence to support ML/TF investigations.
  4. Strengthen Sanctions: Strengthen sanctions to ensure their dissuasive effect.

Timeline:

The report provides a timeline for implementation, including:

  1. Short-term (6-12 months): Develop and implement a national strategy to address ML/TF threats.
  2. Medium-term (1-3 years): Enhance investigative capacity to address complex cases and improve TF offence.
  3. Long-term (3-5 years): Implement financial intelligence to support ML/TF investigations.

Overall, the report emphasizes the need for Bhutan to strengthen its AML/CTF measures to combat ML/TF threats effectively.