Director James H. Freis, Jr., Deputy Director Peter Alvarado, and Associate Director Bess Michael of the International Programs Division, and other FinCEN representatives participated in the 20th annual plenary meeting of the Egmont Group of financial intelligence units (FIUs), held in St. Petersburg, Russia. An FIU is the central authority in each country responsible for the receipt, analysis and dissemination of financial information for anti-money laundering and counter-terrorist financing (AML/CFT) purposes. FinCEN is the FIU of the United States of America. This year's plenary saw the admission of FIUs from Gabon, Jordan, Tajikistan, and Tunisia, bringing the Egmont Group membership to 131 FIUs from jurisdictions around the world.
This Egmont Group plenary follows the February 2012 publication of revised standards issued by the Financial Action Task Force (FATF). The FATF is the global standard-setting body for measures to combat the global threats of money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction. Its recommendations are applied by more than 180 countries, through a global network of FATF-style regional bodies, as well as the International Monetary Fund (IMF) and the World Bank.
Highlighted among the revised FATF recommendations, is the central role that that FIUs play in operationalizing the FATF ideals, specifically through the analysis function of the FIU within each jurisdiction. FIUs also have unique authority to share financial intelligence to help law enforcement combat transnational crime, and the Egmont Group's primary purpose is to facilitate increased information exchange for AML/CFT purposes. On the occasion of the plenary, Director Freis signed bilateral memoranda of understanding for the exchange of information with counterparts from Afghanistan and from Sri Lanka.
The Egmont Group's Co-Chair's Statement also highlighted the focus within the Egmont Group on reviewing the Group's founding documents to ensure they remain relevant in guiding the aims and objectives of the organization moving forward. FinCEN Associate Director Michael chairs the effort focused on the corporate structure and governance of the Egmont Group. Other key topics of this year's plenary in which FinCEN played an active role were related to shared efforts to combat mass marketing fraud; technical capabilities and networking practices to facilitate greater information exchange; common approaches to areas of regulatory responsibilities; and global training opportunities for FIUs. The plenaries also offer a unique opportunity for FinCEN representatives to strengthen their relationships with counterparts from around the world.
Egmont Group members also committed to strengthening FIU partnerships and support at the regional levels to take advantage of the unique needs and opportunities for cooperation among neighboring states. At the same time, FinCEN participated in discussions of the heads of FIUs of the G 20 countries, a practice initiated by Director Freis a few years ago. Under the Mexican G 20 Presidency, a priority was promoting financial inclusion, while also meeting anti-money laundering objectives. The Russian FIU hosted the meeting, and Russia will assume the G 20 presidency in the coming year.
Director Freis discussed the revised FATF Recommendations as relevant to FinCEN in a speech in February 2012. In particular, revised FATF Recommendation 29 reads:
Financial intelligence units
Countries should establish a financial intelligence unit (FIU) that serves as a national centre for the receipt and analysis of: (a) suspicious transaction reports; and (b) other information relevant to money laundering, associated predicate offences and terrorist financing, and for the dissemination of the results of that analysis. The FIU should be able to obtain additional information from reporting entities, and should have access on a timely basis to the financial, administrative and law enforcement information that it requires to undertake its functions properly.
Interpretive notes accompanying the recommendations stress that FIUs should: Conduct operational and strategic analysis to follow the trail of particular activities or transactions and to identify money laundering and terrorist financing related trends and patterns; Disseminate, spontaneously and upon request, information and the results of its analysis to competent authorities; Have access to the widest possible range of financial, administrative and law enforcement information and securely protect that information; Be operationally independent and autonomous and be free from any undue political, government or industry influence or interference, and; Ensure that the FIU has regard to the Egmont Group Statement of Purpose and its Principles for Information Exchange Between Financial Intelligence Units for Money Laundering and Terrorism Financing Cases.