Maldives: Politicians in deep water with APG on AML legislation

A high-level delegation from the Asia/Pacific Group on Money Laundering (APG) informed MPs on the National Security FCA - MAldivesCommittee yesterday of “negative consequences” for the Maldives if parliament fails to enact anti-money laundering legislation next month.

In an unofficial meeting with the committee’s chair, MP ‘Reeko’ Moosa Manik, and MPs Abdul Azeez Jamal Abubakur and Mohamed Thoriq, APG Co-chair Andrew Colvin warned that the organisation along with the Financial Action Task Force (FATF) “would be left with little option but to take certain measures that would be negative for the Maldives” should the legislation not be passed.

APG Executive Secretary Dr Gordon Hook noted that implementing laws on anti-money laundering and combating the financing of terrorism (AML/CFT) was “an obligation that the Maldives undertook voluntarily when you joined the APG in 2008″ as a condition of membership.

“There are 41 countries in the APG. They include every country in the Asia/Pacific region with the exception of North Korea and three tiny Pacific states. Among those 41 countries of which Maldives is a member, you are the only country without a comprehensive AML/CFT framework,” he observed.

The anti-money laundering bill was submitted to parliament in late 2013 and sent to the National Security Committee for further review.

The absence of legislation “makes Maldives very vulnerable to money laundering and terrorist financing,” Dr Hook said.

He added that the vulnerabilities were identified by the International Monetary Fund (IMF) in a report prepared in 2011.

Maldives Monetary Authority (MMA) Assistant Governor Neeza Imad meanwhile told MPs that the Maldives received a very low rating in an assessment by the APG in 2011, after which the central bank began drafting legislation on AML/CFT.

Technical assistance was provided by the APG and the IMF, she noted.

Countries that are listed by the APG for non-compliance with its standards on AML/CFT face “hindrances” in securing foreign direct investment, opening accounts overseas, and conducting international financial transactions, Neeza said.

Consequences

Dr Hook explained that the APG in its annual meeting last year made a unanimous decision to send a high-level delegation to the Maldives “to express concern prior to the next annual meeting”.

Elaborating on the consequences, Dr Hook noted that 14 member states were subject to review last year by the FATF through the International Cooperation Review Group (ICRG).

“They have what’s called a blacklist and counter measures list. There’s a lot of countries on that list at the moment and there are varying categories on that list. And it doesn’t matter where you are on the list. There are negative consequences to it,” he said.

The consequences include having overseas credit card transactions blocked for citizens of listed countries and the blocking of incoming wire transfers from European banks, Dr Hook said.

“It would be our concern – and the co-chair has expressed that – that the Maldives should not be the subject of those negative consequences at the very time that the Maldives is working very hard to eliminate public debt and to attract foreign investment,” he continued.

The parliament upon returning from recess has “a small window of opportunity” to pass the bill in March, he suggested.

If the legislation is not enacted before the next meeting of the FATF in June, Dr Hook cautioned that the Maldives’ case would be taken under consideration.

“I can indicate that the Maldives is already on a list of jurisdictions that are under consideration by FATF,” he said.

He added that the Maldives “dodged a bullet” last year because the FATF “looked at PNG [Papa New Guinea] as an alternative.”

A review by the FATF “could take upwards to three years,” Dr Hook noted, “during which you in the Maldives would expend a huge amount of resources to try to deal with the issues.”

“You can dodge that bullet if you enact the legislation,” he advised.

Political will

Following statements by the delegation, MP Moosa Manik said that the committee could complete reviewing the legislation in “24 hours” and send it to the floor for a vote in the first week of March.

The opposition Maldivian Democratic Party MP urged the delegation to seek a commitment from the executive as the ruling coalition had “a clear majority” in the People’s Majlis.

In response, the delegation said it has met with Finance Minister Abdulla Jihad and was planning to meet Attorney General Mohamed Anil as well as officials from the Maldives Police Service and the Prosecutor General’s Office.

The MDP chairperson also alleged that some pro-government MPs could be involved in money laundering and might oppose enactment of AML/CFT laws.

MP Abdul Azeez – a member of the ruling Progressive Party of Maldives – however told the delegation that there was “no political will to delay this bill.”

“We are willing to do this and I think it is our obligation to pass this bill for the sake of the nation. There is no will to delay this purposely,” he said.

In his concluding remarks, Colvin said the delegation was encouraged by the assurances from committee members.

“We will make sure that in our report we reflect that. We will need to get back to the [APG] membership and advise them on the progress and we will look on with much interest in March and hope that the bill can make it through the parliament,” he said.

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