Maldives: Detailed Assessment Report on Anti-Money Laundering and Combating the Financing of Terrorism

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Preface

This assessment of the anti-money laundering (AML) and combating the financing of terrorism (CFT) regime of the Maldives is based on the Forty Recommendations 2003 and the Nine Special Recommendations on Terrorist Financing 2001 of the Financial Action Task Force (FATF), and was prepared using the AML/CFT assessment Methodology 2004, as updated in June 2010.

This report provides a summary of the AML/CFT measures in place in the Maldives at the time of the mission or shortly thereafter. It describes and analyzes those measures, sets out the Maldives’ levels of compliance with the FATF 40+9 Recommendations (see Table 1) and provides recommendations on how certain aspects of the system could be strengthened (see Table 2). The report was produced by the IMF at the request of the Asia/Pacific Group on Money Laundering (APG) Secretariat and the authorities of the Maldives. [[It was presented to the Asia/Pacific Group on Money Laundering (APG) and endorsed by this organization during its 14th Annual Meeting on July 18-22, 2011 in Cochin, India]]

Key Findings

The financial sector of the Maldives, although small and not very developed, is susceptible to both money laundering and, to a lesser extent, terrorist financing. While the authorities do not have estimates of the size of the crime economy, anecdotal evidence suggest that trafficking in illegal drugs and corruption alone produce significant amounts of illegal funds. There are also indications that resources have been raised in the country to fund terrorists and terrorist activities abroad.
3. Over the last years, the Maldives has taken steps to lay down the foundations of an AML/CFT framework. Institutional measures have been taken to set up a financial intelligence unit (FIU), and laws have been passed to criminalize, albeit insufficiently, the laundering of the proceeds of drug-related offenses and impose basic AML/CFT preventive measures on banks. Regulations were adopted to address some AML/CFT aspects in the securities sector.
4. The current AML/CFT framework is very recent and in need of considerable improvements, both in terms of substance and implementation.

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© 2012 International Monetary Fund 

Detailed report link: here