Financial Intelligence Units : An Overview

Front Matter

Front Matter

Author(s):
International Monetary Fund
Published Date:
June 2004
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    © 2004 by the International Monetary Fund

    Editing: Paul Gleason and Glenn Gottselig

    Composition: Glenn Gottselig and Sarah Underwood

    Cover Design: Martina Vortmeyer

    Cataloging-in-Publication Data

    Financial intelligence units : an overview -- Washington, D.C. : International Monetary Fund, Legal Dept., Monetary and Financial Systems Dept. : World Bank, Financial Market Integrity Div., 2004.

    p. cm.

    ISBN 9781589063495

    Includes bibliographical references.

    1. Money laundering—Prevention. 2. Commercial crimes—Prevention. 3. International Monetary Fund. Legal Dept.

    HV8079.M64F35 2004

    The term “country,” as used in this publication, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.

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    Contents

    Foreword

    Recent efforts to develop effective strategies for anti-money laundering and combating the financing of terrorism (AML/CFT) bring together several distinct but related aspects of financial systems and criminal law. Financial intelligence units (FIUs) constitute an important component of these strategies. Combating the crimes of money laundering and financing terrorism is essential to the integrity of financial systems but, if these efforts are to be successful, traditional law-enforcement methods need to be supported by the contribution of the financial system itself, in particular by implementing know-your-customer principles and reporting suspicious transactions to an FIU. Financial institutions hold critical information on transactions that may hide criminal schemes. Although this information is covered by necessary confidentiality regimes, it has to be made accessible to law-enforcement agencies to enable them to trace criminal money channels.

    FIUs have now been in existence for over ten years, and more than 80 have been admitted into the Egmont Group, the informal international association of FIUs. Many more countries are planning to establish an FIU; and in many countries, the authorities are endeavoring to improve the effectiveness of existing ones. Yet, up to now, no overall presentation of FIUs was available to help these authorities in their efforts. As a result, considerable time and effort was needed to find relevant information about FIUs and their operations. It is this gap that the present handbook attempts to fill.

    The handbook covers a wide array of topics relating to FIUs, beginning with the key steps necessary for establishing them and the various forms they can be given in a government structure. The core functions of FIUs (receiving reports of suspicious transactions, analyzing them, and disseminating the resulting intelligence) are analyzed in detail, with examples taken from a number of different countries. Some of the most important additional functions assigned to certain FIUs, such as monitoring compliance of the reporting institutions with AML/CFT requirements, are also discussed. Finally, international assessments of FIUs, done in the context of assessments of overall AML/CFT frameworks, are described.

    Rather than providing definitive statements on what an FIU should be, the handbook strives to bring to the reader as many examples as possible of existing FIU settings and arrangements, in order to provide policymakers and legislators with the widest palette of country experiences worldwide and help them design financial intelligence units that best serve the purposes of their own jurisdictions.

    François GianvitiStefan IngvesCesare Calari
    The General CounselDirectorVice President
    IMFMonetary and Financial

    Systems Department

    IMF
    Financial Sector

    World Bank

    Acknowledgments

    The handbook is a joint effort of the International Monetary Fund’s Legal Department and Monetary and Financial Systems Department as well as the World Bank’s Financial Market Integrity Division. It was written and edited by Louis Forget with the assistance of Vida Šeme Hočevar, both of the IMF Legal Department, under the direction of Jean-François Thony, Assistant General Counsel. Contributions and comments were received from Maud Bökkerink and Ernesto Lopez, IMF Monetary and Financial Systems Department; Eric Robert, Nadim Kyriakos-Saad, Cheong-Ann Png, and Peter Csonka, IMF Legal Department; and Alain Damais and Bess Michael, World Bank. The support and encouragement of the members of the Egmont Group Committee is gratefully acknowledged and, in particular, the useful comments of William Baity, Chair of the Egmont Committee and Deputy Director, FinCEN; John Brewer, FinCEN; and Boudewijn Verhelst, Deputy Director of CTIF-CFI (the Belgian FIU).

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