WASH THE DIRT OFF THE MONEY

As is known, money is the goal of most crimes. Finances "earned" in this way are called "dirty", but this does not really confuse their owners. Criminals all over the world have long learnt how to "wash" their "income" in order not to irritate the judiciary. A lot of methods have been invented for this, which is why it is more and more difficult to organise the fight against this evil. In the recent period when terrorist organisations have become more and more active in the world, it is important to take measures to prevent their financing. It is impossible to imagine that this money is handed to them only in cash in big cases, and if they go through the banks, this means that there have to be ways of discovering and blocking this flow.

If there is a desire, possibilities will always be available. Most governments of the world, including our government, have the desire. Moreover, special organisations have been set up in order to make this fight effective, and cooperation with them is regarded as a "matter of honor" for any developed state. More than 20 countries of the world have joined the initiative of the Council of Europe to fight this evil, and it is headed by a special committee to combat money-laundering and financing of terrorism - MONEYVAL. As an international organization set up in 1997 to combat money-laundering, MONEYVAL expanded its mandate in 2001 and focused on work to combat financing of terrorism.

Standards accepted, recommendations implemented

International organisations have already adopted the main recommendations that the countries which have joined this initiative have to follow. Among them is a ban on the opening of anonymous accounts and accounts under the names of other people, careful check of customers, keeping documents on money transfers for five years, checking operations for economic and other legal substantiation of a deal and others. Another meeting of the committee is scheduled for the end of February in Strasbourg this year. The director-general of the National Bank of Azerbaijan (NBA) and head of the expert group on issues of fighting the legalization of illegal incomes, Rufat Aslanli, says that for the first time it will be held with the participation of a group on financial measures to counter money-laundering (FATF) of the Organisation for Economic Cooperation and Development (OECD). Taking into account that FATF includes more than 25 countries, such a practice will be useful for close contacts and for establishing bilateral relations.

We have to say that in the short period of its cooperation with MONEYVAL, Azerbaijan has shown itself as a country that takes an active part in the fight against money-laundering, and has been given a positive assessment for its steps taken in this direction. "In the issue of fighting financing of terrorism, Azerbaijan can be regarded as quite an advanced country," Rufat Aslanli believes. "The country has joined Council of Europe resolutions on the fight against money-laundering and financing of terrorism, which have been ratified by the Azerbaijani parliament, and is already applying recommendations from international organizations. Specifically, a law has been adopted that bans the opening of anonymous accounts and the release of anonymous securities. The fight against money-laundering is also one of the components of the state programme on the fight against corruption in Azerbaijan."

The first round of Azerbaijan's assessment by MONEYVAL was held in May 2003. On its basis, the republic was attributed to the category of countries that mainly correspond to updated FATF standards. Since that moment, the standards have been supplemented with another one - countering financing of terrorism.

At every meeting of MONEYVAL that take place three times a year, participants report their work to fight money-laundering and financing of terrorism. According to Aslanli, Azerbaijan's working group has already submitted to the committee a report on the work that has been carried out in the country according to 40 requirements of FATF and nine requirements on the prevention of financing of terrorism. Azerbaijan's report, just like that of other countries, will be examined by the bureau within the framework of the plenary session.

We have to point out that the Azerbaijani government is trying to implement all the necessary measures, including the ratification of the draft law "On the fight against money-laundering and financing of terrorism". The drawing up of the draft law and in the next stage, the setting up of a financial intelligence body, are the main requirements of MONEYVAL. The government has already received a positive response on this draft law from the World Bank, the International Monetary Fund, the US Department of Justice and the UN anti-drug agency.

The draft law includes the experience of other countries and international principles. It defines the necessary requirements to the body that carries out financial oversight and its obligations, the establishment of a financial intelligence body, the collection of information on financing of terrorism and assistance to relevant organizations to fight this crime. The parliament supposes that the draft law will be examined at the spring session of the Milli Majlis.

Azerbaijan needs financial intelligence

In the recent period, Azerbaijan has been frequently visited by experts in the fight against money-laundering. This year the country has already been visited by a specialist of the Council of Europe, Claudio Sroligo, and a representative of the US Department of Justice. The experts' visits are related to the fact that donor organizations have already adopted a decision to coordinate their activities in providing Azerbaijan with technical assistance in this sphere. The International Monetary Fund has also agreed to render assistance in this direction and coordinate efforts to avoid duplicating technical assistance.

In Aslanli's opinion, Azerbaijan has a great deal of work to do in the sphere of legislative development because after the adoption of the law "On the fight against money-laundering and financing of terrorism", it will be necessary to make a number of amendments to other legislative acts and even to subordinate legislation (laws related to various spheres, regulatory laws). In this regard, amendments to the Criminal Code have already come into force. According to those amendments, action or inaction linked to money-laundering has been criminalized and according to international conventions supported by Azerbaijan, criminal liability is envisaged (with or without confiscation of property, from five to eight years' imprisonment).

On the other hand, a lot has to be done in the country in order to increase the potential of relevant supervisory agencies. In many countries of the world, there is a practice when cases related to money-laundering and financing of terrorism are examined by special and qualified judges because this is regarded as a complicated case for the courts. In this regard, special courses are conducted for judges. "For this reason, we made an assessment in 2003 and drew up a special programme one of the aspects of which is to spread donor technical assistance in all directions used in this issue, including the National Bank as a body that regulates the activities of financial mediators," the NBA director-general thinks.

In parallel with this, work is being carried out to set up a financial intelligence body. "There are four models of this body in the world - police model, administrative model, hybrid model and prosecutor's model. The main task is to choose the most optimal model for Azerbaijan, and to this end, it is necessary to use the best practice, which will give an impetus to the creation of a system for combatting terrorism and money-laundering," said the head of the department for affairs of the law-enforcement agencies of the presidential administration, Fuad Alasgarov.

The efforts of the Azerbaijani government to set up a financial intelligence body in the country are supported by the USA. The US ambassador to Azerbaijan, Anne Derse, thinks that measures aimed at combatting financial crimes are necessary for domestic and national security, as well as for the supremacy of the law. She said that the banking system receives 100m dollars annually from this type of crime. "Since the problem is global, all the democratic countries of the world are setting up financial intelligence bodies and a strong legal system," the diplomat pointed out.

According to experts, in terms of effectiveness, such a body should be independent, but accountable. It should definitely establish cooperation with similar organizations in other countries, otherwise incomes from criminal activities and terrorism inside the country can be distributed abroad.