Financial Crime World

Assessment of Anti-Money Laundering (AML) and Counter-Terrorist Financing (CFT) Measures in the Maldives

The International Monetary Fund (IMF) has conducted a report to assess the AML/CFT measures in place in the Maldives as of 2010. The report highlights key findings and provides recommendations for improvements.

Key Findings

Money Laundering and Terrorist Financing Risks

  • The financial sector of the Maldives is susceptible to both money laundering and, to a lesser extent, terrorist financing.
  • No investigation has taken place, and no charges have been brought for money laundering under the Drugs Act.

Limited Action Against Money Laundering

  • There are no laws or procedures in place to freeze terrorist funds or assets of persons designated by the United Nations Security Council Resolutions (UNSCR) 1267 and 1373 (and their successor resolutions).
  • 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.

Capacity Challenges

  • The Maldives faces challenges in fighting effectively against money laundering and terrorist financing due to shortcomings in the overall criminal legislative framework, particularly with respect to criminal procedure.
  • The lack of resources and capacity hinder the effective fight against money laundering and terrorist financing.

Recommendations

The IMF recommends that the Maldivian government should:

  • Provide a clear legal basis for the FIU’s operations, including the power to require financial institutions to report suspicious transactions.

Strengthen Capacity of Law Enforcement and Judicial Authorities

  • Address the lack of resources and capacity in these areas, which hinder the effective fight against money laundering and terrorist financing.
  • Develop a comprehensive ML/TF strategy to address the shortage of criminal legislative framework, particularly with respect to criminal procedure.

Implement UNSCR 1267 and 1373

  • Freeze terrorist funds or assets of persons designated under the freezing mechanisms of other countries.

Conclusion

The IMF report concludes that while the Maldives has made progress in establishing an AML/CFT framework, significant improvements are needed to strengthen its capacity to prevent and investigate ML/TF cases.