1.
Agenda, Order of the Day and General Consideration of the
issues
The
draft Agenda was approved with no changes.
2.
Report
by the Executive Secretariat on the Work Plan and the Election
of the Chair
The
Executive Secretariat gave its report on the proposed Work Plan
(see Annex A) and approved by CICAD at its 28th
regular session held in Port of Spain, Trinidad and Tobago,
October 24 – 26, 2001. Likewise, the Group of Experts was
informed on the election of Mr. Victor Prado of Peru as Chair
for the year 2001 – 2002 (CICAD/doc.1140/00 rev. 2 SEPARATA).
The
Executive Secretariat, in accordance with the guidelines for the
Work Plan of the Group of Experts as decided at the 25th
regular session of CICAD and taking into account the experience
of last year, requested that the proposals for the Work Plan for
2002 - 2003 be sent to it by September 15, 2001 so that these
could be included in the topics to be decided by CICAD at its 30th
regular session to be held in Caracas, Venezuela in November of
this year. The Group accepted this proposal.
3.
3.
Typologies
A
representative from the Drug Police of Peru (DINADRO) referred
to a case whereby false gold were exported from Peru to the
United States. This consisted in three Peruvian companies
transferring 18 million dollars to set up a country to buy gold
ingots. Another company sold false gold, with a value of 6
million dollars, for 10 million dollars thus 4 million dollars
was laundered. But, taking into account that the substances sold
were worth approximately 30000 dollars, a total of 16 million
dollars was laundered.
The
Prosecutor ad hoc for
the Montesinos Case, Mr. Jose Ugaz, presented the details of the
case that involved the advisor on intelligence matters for the
ex President of Peru, Mr. Alberto Fujimori. It is a case that
deals with corruption, murder, the illicit trafficking of
firearms and drugs, and money laundering, among others.
According
to the presentation of Mr. Ugaz, the operation to conceal the
funds that originated from the crimes carried out by Montesinos
were made through cash deposits in various banks located in Peru
which then were then transferred to foreign banks. Mr. Ugaz also
indicated that with the proceeds from the illicit activities,
Montesinos acquired property through strawmen.
To
date, 172 investigations have been carried out involving 655
people that have led to 80 arrests. In order to carry forward
the investigations, he highlighted the enactment of a law that
allowed persons who could supply relevant evidence in the case
were given the possibility of receiving lighter sentences. To
date, 20 persons are negotiating for receiving lighter sentences
based on this law.
Through
these investigations, 204.5 million dollars have been frozen in
various accounts and goods confiscated. Recourse was made
through formal and informal processes of exchange of information
of which Mr. Ugaz highlighted the effectiveness of this last
method as it led to quick responses. Despite the foregoing, Mr.
Ugaz indicated that they have not been able to repatriate the
funds that have been frozen, as in many cases evidence is
required that the funds belonged to the State of Peru and in
other cases because of the self interest of the involved
financial institutions.
Various
delegates intervened following the presentation, above all, to
inquire to what extent the criminalization of money laundering
and other control measures in Peru has been useful to prevent
and sanction this phenomena as well as in having precautionary
measures that make possible the subsequent seizure of goods.
Many
of the delegations asked on the level of cooperation received by
the Government of Peru from other countries. Mr. Ugaz responded
that Switzerland, the United States, Mexico and Luxembourg froze
funds related to this case without the need of an explicit
request by Peru. He also highlighted the cooperation received by
the Cayman Islands in the freezing of funds, even though the
request was made by telephone with the promise of a subsequent
official rogatory letter. The delegate from the FIU of the
Bahamas, when Mr. Ugaz mentioned the possibility that her
country may have been used to conceal money in this case stated
that her agency would assist in the investigation if so asked.
This request would have to be made with the Commissioner of
Police, which would then pass on the request, as Peru does not
have a FIU in place. She stressed that since her agency was a
member of the Egmont Group, she could provide that information
directly to other FIUs that are members of this Group. She
suggested and encouraged other countries to join.
Noting
the importance of international cooperation among the FIUs, the
delegate from Bolivia, Director of the FIU of that country
indicated that his agency discovered that money was transferred
from Bolivia to Peru on seven occasions from accounts held in
the name of Montesinos. Upon discovering this information, the
Peruvian authorities were notified.
Mr.
Ugaz indicated that the Peruvian legislation was insufficient in
addressing these problems and that some modifications were
necessary. The Chair indicated that this involves the topic of
the autonomy of the money laundering, which would be taken up by
the Group in a later session. As well, during the discussions,
it was stressed the in order to effectively combat money
laundering, there is a need for international cooperation.
In
conclusion, the Group of Experts recommended that the
criminalization of money laundering by amended to reflect that
of the CICAD Model Regulations, the Plan of Action of Buenos
Aires and the 40 Recommendations of the FATF to include as
predicate offences those which are traditionally considered to
be “serious,” of which Article 2 of the CICAD Model
Regulations provides as an example.
Moreover,
it was reiterated the need to provide international cooperation
on money laundering, for which, it was concluded, the
establishment of an FIU and membership in the Egmont Group is
fundamental as this allows for the rapid exchange of information
through bilateral agreements. Moreover, through membership of
the Egmont Group, the FIUs would benefit from the information
contained in its secure web page.
4.
4.
Financial
Intelligence Units
The
delegations of the Egmont Group, Argentina, Uruguay, Colombia
and Peru respectively, made presentations on the FIUs. Mr.
Rodolfo Uribe provided information on the functions of the
Egmont Group and how the countries could benefit from them. Mr.
Marcelo Sain of Argentina indicated the progress made in his
country in the implementation of a FIU and he commented on the
circumstances and proposals made by his government in locating
the FIU in the Ministry of Justice and the manner in which this
agency is made up of different representatives of various
governmental bodies that combat money laundering. He highlighted
that the FIU would add more to the information received for
analysis so that they can be used by various competent agencies
to investigate cases of money laundering.
The
delegates from Uruguay, Mr. Hebert Vagnoli and Mr. Daniel
Espinosa referred to the legal structure and operation of their
Financial Analysis Unit (FAU), mentioning that it operates under
the Central Bank and is made up of superintendents of banks,
securities and insurance. They also added that the FAU solely
analyzes information and if an operation appeared to be
laundering money, this would be reported to the competent
authorities in order to initiate an investigation.
Mr. Espinosa informed the Group that Uruguay participated
as an observer in the Egmont Group and that they have applied
for membership for the next plenary session to be held in 2002.
The
delegate from Colombia made a presentation on the operation of
new software developed for those subjects required by law to
report to the FIU can do electronically. The demonstration
showed that the software is user friendly and that it allows for
a quicker process of information, which would then be
categorized by offence, in accordance with the key words typed
into the system.
The
delegate from Peru reviewed the advances made in the
establishment of the FIU. This agency would be located within
the Ministry of the Economy.
She also indicated that the officials working in the FIUs
would be protected in the execution of their responsibilities
and that there would be a need to establish a legal mechanism in
which banking secrecy would be lifted.
The
delegates from Colombia, Mexico, Brazil, the Bahamas, Bolivia
and the United States all suggested that, given the
transnational nature of money laundering, it is fundamental that
FIUs be established in countries and that they become members of
the Egmont Group. The Egmont Group has a communication network
in which the FIUs can access and exchange information in a rapid
and secure manner. Likewise, they insisted the need that the
FIUs should:
a)
have mechanisms that allow for the rapid exchange of
information with other agencies within their own countries;
b)
have good relations with other competent authorities for
the investigation of money laundering, of which they would
contribute with their analysis;
c)
be able to complete their functions without having
banking secrecy impede their work; and
d)
be exempt – itself and its officials – from criminal,
civil or administrative sanctions when carrying out their
functions in good faith.
5.
Training Activities
The
Executive Secretariat reported on the advancements of the
training activities commended to it by the Group of Experts.
Reference
was made to the CICAD-Inter-American Development Bank (IDB)
pilot project to train bankers and regulators of the financial
sector, which upon its completion in June 2000 for the original
beneficiary countries (Argentina, Colombia, Chile, Peru and
Uruguay), was extended to Bolivia and Ecuador. The Executive
Secretariat also notified of the recent agreement entered into
by CICAD, the IDB and the Banco Bilbao, Vizcaya Argentaria S.A.
(BBVA) by which through reciprocal non-exclusive use license
concessions the objective is to provide training to the
employees of the BBVA. Moreover, it was agreed that Brazil would
benefit by the development of a program to be imparted through
technology. As well, a request by the Bank of Montevideo to use
the program had been approved, so long as the Bank paid the
costs for the training of 80 public officials of that country.
Finally, it was announced that the BID had committed to provide
these courses to the Central American members of the CFATF.
It
was also announced that an agreement was near completion with
the BID by which a training program is to be initiated this year
for judges and prosecutors that are to be carried out for the
seven countries that benefited from the training of bankers and
regulators in order to take advantage of the materials already
developed for those countries.
In
respect to the training of personnel of FIUs, the Executive
Secretariat informed that as a result of the mandate received by
the OAS and the BID from the Summit of the Americas requesting
this type of action, negotiations have been pushed with the BID
to provide financing for a program of this type.
6.
Plan
of Action of Buenos Aires
The
Executive Secretariat reported on the current state of
countries’ responses to the Plan of Action of Buenos Aires
on-going evaluation questionnaire. The Secretariat noted that
having been given permission by CICAD to use the responses of
the Multilateral Evaluation Mechanism (MEM), 33 of 34 country
tables were completed. The tables were distributed to each
country for their review and comments. Any comments and
corrections are to be received by the Executive Secretariat
within 30 days for their publication on the CICAD web page on
money laundering. Moreover,
an electronic version of the tables were distributed to the
delegates, but the Executive Secretariat emphasized that the
information provided is not a definitive version until the
aforementioned requirements were carried out for publication on
the INTERNET.
7.
The South American FATF (GAFISUD)
The
Ambassador Sergio Kostritsky, representative of CONTRADROGAS in
the delegation of Peru, referred to the developments in the two
first plenary meetings of the GAFISUD held in Cartagena,
Colombia and Montevideo, Uruguay in December 2000 and May 2001,
respectively.
Ambassador
Kostritsky indicated that the GAFISUD is made up Argentina,
Bolivia, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru and
Uruguay with CICAD/OAS as an advisor member. Additionally,
Portugal, Spain, the United States and the BID have been
accepted as observer members.
In
the developments of the GAFISUD, it was highlighted that Buenos
Aires, Argentina has been chosen as headquarters of this entity
and that that Executive Secretary would be selected in August
2000. Moreover, Uruguay and Colombia had offered to be examined
and that this September, a seminar on training on mutual
evaluation will be carried out in which CICAD would participate
and make a presentation on the MEM, as the information found in
this mechanism should be considered in the background of the
evaluation of every participating country and this was approved
in the meeting held in Montevideo, Uruguay.
8.
8.
The
Autonomy of the Money Laundry Offence
The
Executive Secretariat referred to a document that was written
for the meeting on this topic that contained a study detailing
the important themes that are to be considered on this topic:
a)
the relationship between the offence of money laundering
with concealment and complicity;
b)
legally protected property;
c)
the possibility of a sentence and criminal proceedings
for the offender of the prior crime and the crime of money
laundering;
d)
the assessment of evidence in the money laundering
offence and its relationship with the prior offence.
The
representative from Argentina, Magistrate Patricia Llerena, made
a detailed presentation on the criminal and administrative
aspects of the Argentinean legislation. The Magistrate
emphasized that the approach in her country to the money
laundering offence as one of conditional concealment and as well
as one of a fraudulent offence while taking care not to violate
the guaranteed rights of the accused.
The
Magistrate then provided the elements and background of the
money laundering offence, mentioning the legislation from Spain,
the exclusion of the money laundering offender from the prior
offence, the phenomena of circumstantial evidence, and its link
to unjust enrichment and how this phenomena affects the autonomy
of the money laundering offence.
The
delegate from Mexico, Ms. Luz Nunez Camacho, made a presentation
on a case that led to a conviction, in which the autonomy of the
money laundering offence was accepted, above all, in the case of
circumstantial evidence. Ms. Nunez Camacho, after making her
presentation on the use of circumstantial evidence, stated that
it is fundamental that in order to combat this crime, new forms
of international cooperation that provides for more efficient
transnational collaboration.
The
Chair of the Group of Experts made a summary of the topic on the
evolution of the criminalization of money laundering, the
successive problems of the various methods of criminalization,
the method adopted by Peru to criminalize the offence and its
insufficiency in other areas such as the lack of financial
controls.
The
Chair also referred to the degree of fraud of the offence, its
deficiencies in the matters of evidence and its limitations in
the confiscations of goods, as well as in the recuperation of
funds found outside of the country and the deficiencies in
agreements to repatriate funds that were taken outside of the
country. Moreover, reference was made to obstacles to lift
banking secrecy not only at the national level, but also
international.
In
conclusion, the Chair indicated the need to revise the Peruvian
law and mentioned the new draft law in which Peru modifies the
current money laundering offence in which it has come under
criticism only in the reduction of the sanctions to the ones
currently in place.
He
also referred to the advantages of the draft law such as the
provisions that facilitate the discovery period for evidence by
justice officials. The Chair also expressed concerns on what is
meant by ‘autonomous’ and how this can be a factor in
facilitating the application of justice, provided some examples
on the matter and concluded on legislative advancements and to
make easier the evaluation of evidence.
He
also referred to the difficulty on the matter of evidence on the
proceeds from money laundering for which he suggested the
Mexican model as an example to follow. The following suggestions
were made:
a)
a) identify
the criminalized conduct in a generic form;
b)
b) eliminate
the need to first have a prior punishable offence;
c)
c) tie
the illicit origin of the goods that are object of the crime
with the subjective crime.
The
Group proposed that the countries make comments on the proposal
made by the Chair so that the Executive Secretariat can compile
the responses sent so that this may be included in the Work Plan
for the year 2002 – 2003 to be considered by CICAD at its 30th
regular session to be held in November in Caracas, Venezuela
this year. For this reason, it is requested that these proposals
arrive at the Executive Secretariat before the 15th
of September of this year to be included in the Agenda of said
meeting.
9.
Future Meetings of
Expert Group
Mexico
made it known its intention to host the next meeting of the
Group of Experts. This proposal will be presented to CICAD for
its consideration.
