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Bhutan Takes Significant Steps to Combat Money Laundering and Terrorist Financing

In its latest follow-up report, Bhutan has outlined the progress it has made in implementing anti-money laundering (AML) measures and combating terrorist financing. The report highlights the country’s efforts to strengthen its financial sector and improve international cooperation.

Risk Assessment and Risk-Based Approach

Bhutan has implemented a risk-based approach to assessing money laundering risks, focusing on high-risk sectors such as banking and finance. The country has also established a national coordination committee to ensure effective communication and cooperation among different agencies.

National Cooperation and Coordination

The report highlights the importance of national cooperation and coordination in combating money laundering and terrorist financing. Bhutan has established a financial intelligence unit (FIU) to collect, analyze, and disseminate financial information to law enforcement agencies.

Money Laundering Offence

Bhutan has criminalized money laundering and established penalties for those found guilty of the offence. The country’s penal code provides for fines and imprisonment for individuals and organizations involved in money laundering activities.

Confiscation and Provisional Measures

The report notes that Bhutan has implemented confiscation measures to seize assets obtained through money laundering activities. The country has also established provisional measures to freeze assets and prevent their dissipation.

Terrorist Financing Offence

Bhutan has criminalized terrorist financing and established penalties for those found guilty of the offence. The country’s penal code provides for fines and imprisonment for individuals and organizations involved in terrorist financing activities.

Targeted Financial Sanctions

The report highlights Bhutan’s efforts to implement targeted financial sanctions related to terrorism and terrorist financing. The country has also implemented measures to prevent the misuse of charitable donations and other funds.

Non-Profit Organizations

Bhutan has established guidelines for non-profit organizations to ensure that they do not engage in money laundering or terrorist financing activities. The country has also implemented measures to regulate the flow of funds to these organizations.

Financial Institution Secrecy Laws

The report notes that Bhutan has repealed its financial institution secrecy laws, allowing for greater cooperation between financial institutions and law enforcement agencies.

Customer Due Diligence

Bhutan has established customer due diligence requirements for financial institutions, including identity verification and documentation of transactions.

Record Keeping

Financial institutions in Bhutan are required to maintain accurate records of transactions and customers. The country’s FIU is responsible for monitoring these records and identifying suspicious activities.

Regulation and Supervision of Financial Institutions

The report notes that Bhutan’s financial institutions are subject to regulation and supervision by the central bank and other authorities. The country has established measures to ensure that these institutions comply with AML/CFT regulations.

Powers of Supervisors

Bhutan’s supervisors have been granted powers to conduct on-site inspections, request information, and impose sanctions for non-compliance.

Financial Intelligence Units

Bhutan’s FIU is responsible for collecting, analyzing, and disseminating financial information to law enforcement agencies.

Responsibilities of Law Enforcement and Investigative Authorities

The report notes that Bhutan’s law enforcement and investigative authorities have been granted powers to investigate money laundering and terrorist financing activities.

Bhutan has implemented targeted financial sanctions related to terrorism, including freezing assets and preventing the dissipation of funds.