Financial Crime World

Maldives’ Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Framework: Key Shortcomings

The Maldives has been facing significant challenges in effectively combating financial crimes, including money laundering and the financing of terrorism. The country’s AML/CFT framework is marred by several shortcomings that hinder its ability to tackle these financial threats.

Limited Scope of Money Laundering Offense

  • Conversion and Concealment: The Maldives’ laws do not cover all aspects of the standard money laundering offense, including the conversion of criminal property and the concealment or disguise of that property.
  • Predicate Offense Conviction Required: Authorities believe it is necessary to obtain a conviction for the predicate offense in order to secure money laundering charges.

Shortcomings in Provisional Measures and Confiscation Framework

  • Limited Property Types: The types of property that may be confiscated are limited to tangible, corporeal assets with a direct link to the predicate offense.
  • Insufficient Action against Money Laundering: No investigation has taken place, and no charges have been brought for money laundering under the Drugs Act, despite drug trafficking being one of the most frequent asset-generating crimes in the Maldives.

Lack of Criminalization of Terrorist Financing

  • Terrorist Financing Not Criminalized: Terrorist financing is not criminalized in a separate and autonomous way.
  • Ancillary Offense Only: The provision of “finance and property” for the commission of a terrorist act only constitutes an ancillary offense (aiding and abetting) to the commission of that act.

Insufficient Laws and Procedures

  • No Freeze Orders: There are no laws or procedures in place to freeze terrorist funds or assets of persons designated under United Nations Security Council Resolutions (UNSCR) 1267 and 1373 (and their successor resolutions).
  • Lack of Resources and Capacity: Shortcomings in the overall criminal legislative framework, particularly with respect to criminal procedure, and the lack of resources of competent authorities make it challenging for the Maldives to fight effectively against money laundering and terrorist financing.

Capacity Challenges

  • Financial Intelligence Unit (FIU) Not Operational: The FIU within the central bank is not operational due to a lack of legal basis for the MMA to impose AML/CFT obligations.