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Implementing International Standards for Combating Money Laundering and Terrorist Financing in the Maldives

The Maldives has taken significant steps to strengthen its Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) regime, aligning with international standards and best practices. The following sections outline the key points of this comprehensive plan.

Criminalization of Money Laundering

Key Objectives

  • Criminalize ML offenses in line with international standards.
  • Ensure that the intentional element of the offense can be inferred from objective factual circumstances.
  • Extend criminal liability and sanctions to legal persons other than companies.

Importance

Criminalizing money laundering is crucial in preventing the flow of illicit funds through the financial system. This step ensures that individuals and organizations involved in ML are held accountable for their actions.

Criminalization of Terrorist Financing

Key Objectives

  • Criminalize TF autonomously, ensuring the provision and collection of funds for terrorist purposes are criminalized.
  • Make the TF offense a predicate offense for ML.
  • Apply the TF offense to persons abroad who finance terrorist acts in the Maldives.

Importance

Criminalizing terrorist financing is essential in preventing the funding of terrorist activities. This step ensures that individuals and organizations involved in TF are held accountable for their actions.

Confiscation, Freezing, and Seizing of Proceeds of Crime

Key Objectives

  • Ensure that confiscation can be applied to assets of every kind, regardless of whether they are held or owned by the defendant or a third party.
  • Allow for the freezing and seizing of property subject to confiscation with respect to all predicate crimes under the standard.

Importance

Confiscating proceeds of crime is crucial in depriving individuals and organizations involved in ML and TF of their illicit gains. This step ensures that the financial benefits of these activities are removed from the system.

The Financial Intelligence Unit (FIU) and its Functions

Key Objectives

  • Establish the FIU as the center for receipt, analysis, and dissemination of Suspicious Transaction Reports (STRs).
  • Empower the FIU to have access to relevant financial, administrative, and law enforcement information.
  • Enhance the overall quality and depth of analysis.

Importance

The Financial Intelligence Unit plays a crucial role in identifying and analyzing suspicious transactions. This step ensures that the FIU has the necessary tools and resources to perform its functions effectively.

Law Enforcement, Prosecution, and Other Competent Authorities

Key Objectives

  • Ensure that ML and TF offenses are investigated and prosecuted.
  • Provide a legislative basis for the Maldives Police Service (MPS) to postpone or waive the arrest of suspected persons or the seizure of money.

Importance

Law enforcement and prosecution are critical in bringing individuals and organizations involved in ML and TF to justice. This step ensures that these activities are held accountable and that the perpetrators face appropriate consequences.

Preventive Measures: Financial Institutions (FIs)

Key Objectives

  • Bring all FIs within the scope of the AML/CFT regime.
  • Issue implementing regulations associated with Customer Due Diligence (CDD) requirements under the 2010 Banking Act.
  • Prohibit FIs from opening or maintaining anonymous or fictitious accounts.

Importance

Financial institutions play a crucial role in preventing ML and TF. This step ensures that FIs are aware of their responsibilities and take necessary measures to prevent these activities.

Cross Border Declaration or Disclosure

Key Objectives

  • Introduce a compulsory cross-border currency declaration system or a disclosure system in line with Special Recommendation IX.

Importance

A cross-border declaration or disclosure system is essential in tracking the movement of funds across borders. This step ensures that suspicious transactions are identified and reported to the relevant authorities.

The comprehensive plan outlined above aims to strengthen the Maldives’ AML/CFT regime, aligning with international standards and best practices. By implementing these measures, the Maldives can effectively combat ML and TF, protect its financial system, and maintain a secure environment for businesses and individuals.