By Faisal Abdullah
Yemen Observer
The number of cases of money laundering and terrorism financing have dropped in 2011 despite previous forecasts that the number would increase because of continuing political conflict, said Yemeni officials.
Mustafa Nasr, president of the Studies and Economic Media Centre (SEMC), a civil society organization in Yemen, said that banks have submitted about 40 reports regarding money laundering and terrorism financing in 2011 compared with over 50 cases in 2010.
Nasr expected the number would be higher in 2011 because of the "political climate in Yemen is appropriate for the exercise of such crimes". He said the decline encouraged the center to create a network to combat money laundering and terrorism financing, which it did in August.
"This network is voluntary and brings together all professionals who are engaged in the fight against money laundering and terrorism financing including banks, security services, state prosecutors, the judiciary, and interested researchers. The purpose is to raise awareness about new ways to tackle these crimes, exchange information, and raise awareness about the dangers of money laundering and the financing of terrorism to society," said Nasr.
The network held meetings with bank officials working on the sector of money laundering and terrorism financing. Training sessions were held to demonstrate international expertise and develop local efforts in this area. Additional sessions will be provided for staff at security agencies, state prosecutors and the judiciary, according to Nasr.
In last December, in cooperation with Middle East Partnership Initiatives (MEPI), the SEMC organized a training course on “Skills on combating money laundering and financing terrorism “to qualify specialists from Yemeni provinces to work in the banking field on Monday 20th, December of last year.
"This course aims primarily to grant participants with skills to combat money laundering and financing terrorism in addition to equipping them with the best skills for oversight in the field" said Mohammed Farhan, the Projects Coordinator.
"The training course includes skills on classifying customers and accounts with high risks, money laundering suspected cases, and early detection of money laundering and financial terrorism cases," he added.
In this course 20 trainees representing most Yemeni banks in 6 governorates Sana’a, Aden, Hadramout, Taiz, Hodeida and Dhamar. They will contribute in this course which will run for three days. The trainers in this course are Mr. Mohammed Abdu from Arab Banks Group, and Mr. Wadee al-Sada, the Director of Collection Information Unit in Central Bank.
Ahmed Ghaleb, chairman of the government's anti-money laundering committee said the government is undertaking a substantial effort using international standards to strengthen the fight against these crimes.
He said that an anti-money laundering law passed in 2010 and its applicable regulations, which were adopted by the Council of Ministers, "were in line with, and endorsed the internationally agreed procedures to combat money laundering and terrorism financing".
Ghaleb said the cabinet approved the actions taken domestically to combat these crimes by forming a supervisory committee which is chaired by the minister of finance. A technical committee was formed to implement these procedures, and a liaison officer was appointed to work with the various agencies for to help implement the law in accordance with international recommendations.
Ghaleb said the SEMC initiative to combat money laundering was "a good and patriotic initiative to strengthen the government's efforts in the fight against money laundering and the financing of terrorism."
Ahmed al-Khawi, president of the Association of Banks, said commercial banks operating in Yemen are combating money laundering and terrorism financing within an integrated system supervised by the Central Bank of Yemen.
Thabet Nafeesh, head of the money laundering and terrorism financing unit at the CAC Bank, said money laundering in Yemen is limited primarily to the looting of public funds, or connected to financing of terrorist groups. The 2010 law identified cases of money laundering and the financing of terrorism.
Nafeesh said, "The unit at CAC Bank suspected a number of cases this year, and these were crimes of corruption, looting of public funds, and the financing of terrorist groups, and they have been referred to the competent authorities as specified by law."
Dr. Abu Baker Morshed al-Zuheiry, Assistant Professor of Public Law at Sana'a University talked about the risks of money laundering to the overall national income, al-Zuheiry said it deducts part of the national income, transferring needed funds abroad, decreases national production, and deprives the state treasury of an important resource because of tax evasion. Those risks to lead to miscalculation in financial policy, an increase of the exchange rate and the deterioration of the national currency.
Al-Zuheiry said that money-laundering has negative impacts on the rate of inflation, which generally increases when there is a high incidence of money laundering, which causes the deterioration of the national currency. The increase of the domestic money supply does not correspond to the increase of goods being produced, resulting in a high rate of inflation in addition a deficit in the balance of payments. The deterioration of the national currency comes from money launderers easily moving their currency from one country to another, threatening the state’s reserves of foreign exchange. This threat will force the government to demand foreign loans to cover the external financing gap resulting from the smuggling of funds abroad.
In terms of the risks of money laundering to financial policy, al-Zuheiry said that the sudden movement of money from country to another will lead to instability of monetary policy, which has negative impacts on the economy.
Other dangers of money laundering include the increase in unemployment as well as the increase in crime rate and corruption, al-Zuheiry said.
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