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Lao: Experts call for money laundering controls
Laos has to respond quickly to i ssues surrounding potential money laundering, to avoid being placed on any warning list of nations regarded as having insufficient controls built into their financial systems.
Senior officials from the Asia/Pacific Group on Money Laundering (APG) last week met with Lao anti-money laundering officials at the Lao Development Bank in Vientiane to help Laos implement standardised measures against money laundering and financial deception.
The workshop was held to review the findings of the ‘Lao mutual evaluation report' undertaken by Lao authorities and the Asia/Pacific Group on Money Laundering.
APG Executive Secretary Mr Gordon Hook said money laundering is a serious issue as it is intimately connected with organised crime, and countries lacking strict systems can be targeted by criminals.
Mr Hook said countries that are at risk of being exploited for the purpose of money laundering need to put controls on their financial systems, to avoid the possibility of other countries placing them on watch or observation lists in the fight against organised crime.
Mr Hook highlighted the fact that if countries are placed on any kind of watch list, it could affect the confidence of investors and businesses, making them reluctant to do business in those countries, particularly in regard to banking.
As an example, Mr Hook said the facilitation of international money transfers can become more burdensome or difficult if countries are placed on any kind of watch list.
“Laos is not on any list yet, and we are closely working with Laos. However, Laos should give this issue urgent attention in order to avoid the risk. In my experience working on this issue, every country has money laundering issues, even if they are small. If Laos doesn't have any, it would be a surprise to me,” Mr Hook said.
The situation in Laos will be examined at the APG Plenary and Working Group Meetings to be held in Paris, France, in October. Laos sent reports to the APG earlier this year and their review identified some issues that need to be addressed.
Based on their evaluation, Laos is encouraged to implement specific measures defined by the APG such as improving Article 64 of the criminal law related to money laundering, to bring it in line with international standards. More legislation related to money laundering is needed, as well as improving the working capacity of the money laundering office, their review found. The APG also encouraged Lao authorities to formulate a strategy to improve financial regulation and supervision, to be implemented in 2012.
“We acknowledge that Laos is a small country with limitations in terms of capacity, and might face challenges in undertaking the necessary improvements. That's why we're here now, to see if there are any things that we can help with. However, we want to see commitment and progress in improvements,” Mr Hook said. “The APG and our partners are ready to provide technical assistance and support to help Laos achieve these goals.”
The Bank of the Lao PDR's Anti Money Laundering Intelligence Unit Director, Mr Leuane Vongphranakhorn, said Laos acknowledges the importance of the money laundering issue.
“There is urgent work we have to do and we are currently paying more attention and having more discussions on the subject. However, as we are a small country with not much experience in this area, it might take some time for us to do it and we still need support from related organisations,” he said.
The APG is an autonomous and collaborative international organisation that was founded in 1997 in Bangkok, Thailand, consisting of 41 members and international and regional observers.
Some of the key international organisations who participate with, and support, the efforts of the APG in the region include the Financial Action Task Force, International Monetary Fund, World Bank, OECD, United Nations Office on Drugs and Crime, Asian Development Bank and the Egmont Group of Financial Intelligence Units.
According to the APG, estimating the scale of worldwide money laundering is problematic, but the International Monetary Fund has estimated that between two and five percent of global GDP per year is connected to the proceeds of crime.
This places the amount in the trillions of dollars globally every year, the largest sources of which come from the manufacture and trafficking of illicit drugs, arms and people smuggling, corruption, fraud, extortion, kidnapping and theft. Once those funds enter into mainstream financial systems to be concealed, disguised or otherwise transferred they are considered to be laundered funds.
vientiane times
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