Parliamentary Secretary to the Treasurer
27 November 2001 - 6 October 2003
Plenary Session of the Egmont Group
of Financial Intelligence Units
Shangri-La Hotel, The Rocks, Sydney
Friday, 25 July 2003
It is a pleasure to be with you at the conclusion of the 11th Annual Plenary meeting of the Egmont Group of Financial Intelligence Units. Unfortunately, the Minister for Justice and Customs, Senator Chris Ellison, is unable to be here today. He has asked me to convey his apologies to the Conference but as many of you will know he is currently returning from Washington.
Everyone at this conference shares a common goal to combat money laundering and to deny terrorists the funds they need to carry out their terrorist acts.
We will only achieve this goal by working together. Money laundering and terrorist financing are global problems - and they demand a global response. Criminals and terrorists do not care about national borders, national sovereignty, nor the integrity and stability of national and international financial markets. Their sole objective is to disguise the source of their ill-gotten gains or to fund acts of terrorism.
The great challenge for the international community is to put in place strategies that are comprehensive, mutually reinforcing, practical and effective. To do this we need to share our expertise, we need to exchange intelligence and we need to act with a collective determination and resolve in an effective regional and global network.
Impact of Money Laundering
The impact of money laundering and terrorist financing is enormous.
Amongst other things money laundering reduces economic growth, it destabilises financial markets, it undermines the private sector and it erodes the authority and stability of legitimate governments. Of course, it also facilitates the expansion of organised trans-national crime.
Latest estimates indicate that money laundering around the globe is worth between $800 billion and $2 trillion US dollars a year. This is equal to 2 to 2.5% of the world's GDP. This money represents the proceeds of serious fraud, trans-national crime and drug trafficking.
Despite these estimates, it is clear that the international community's resolve is stronger than ever and substantial progress is being made.
At this meeting we have nearly 200 delegates from approximately 80 jurisdictions and 10 international organisations and I understand that much has been achieved:
- Agreement has been reached on new international best practices for the exchange of financial intelligence between financial intelligence units (FIUs).
- A range of working groups and regional subgroups have made good progress on legal, training and development issues.
- Further work has been done to integrate the relatively new counter- terrorist financing role with The Egmont Group's well established anti-money laundering initiatives.
- This afternoon delegates saw the demonstration of the Egmont Public Website which is about to be released. I understand that the website contains valuable information on the role and functions of the Egmont Group, it will be an important reference tool for developing FIUs and will assist government agencies and the broader financial sector to appreciate the importance of FIUs and the work they do.
- The Egmont Group has also this week finalised its first ever Annual Report. This represents another step forward in the Egmont Group's development. The Annual Report will contribute to the ongoing process of raising awareness about the Egmont Group and its role.
- Finally, I understand that you have also worked closely with key international organisations, particularly in relation to coordinating respective efforts to deliver technical assistance to developing FIUs.
Changing Global Standards and FIUs
One of the greatest challenges facing FIUs is the need to remain flexible and responsive to the ever changing standards you are required to meet.
The methods and techniques used to launder money and to finance terrorism are constantly changing. As the international community acts on one front the criminals and terrorists attempt to exploit a weakness or create another opportunity.
Modern technology has allowed terrorist networks to expand and increase their capacity to operate faster and wider. One of the biggest challenges in the fight against this evil is to use that technology to build more and more effective systems to cut off terrorists' supply lines and starve them of the funds that keep them alive.
To stay one step ahead, the Financial Action Task Force has issued the new 40 Recommendations on money laundering which complement the eight special recommendations on terrorist financing.
These recommendations represent the global anti-money laundering and counter- terrorist financing standards and establish a framework for action. They detail the minimum standards that criminal justice and regulatory systems must meet and they set out a process for productive international cooperation.
Financial Action Taskforce Recommendations
FIUs have always had an important role to play in the FATF process. It is the operational focus of the Egmont Group and of the FIUs it comprises that ensures so many of these standards work in practice. This is reflected by the fact that four of the new FATF Recommendations specifically mention FIUs.
For example, one of the recommendations deal specifically with FIUs and the importance of Egmont membership. It recommends that countries should establish an FIU to coordinate, receive, analyse and disseminate information regarding money laundering and terrorism.
Another recommendation emphasises the importance of providing anti-money laundering authorities such as FIUs with the `financial, human and technical' support they need to do their jobs effectively.
All countries have different levels of expertise, different skills and different strengths.
It is imperative that we share our knowledge and strengths and that we help each other to establish fully functioning and effective FIUs.
This technical cooperation and mutual support is the very basis of setting and achieving common goals. It facilitates the information sharing process and in the long run it provides the essential technical, as well as moral, support that is needed for a successful international effort against money laundering and terrorist financing.
Perhaps the best way to learn about the new strategies being used to tackle money laundering and terrorist financing is to look at the work carried out in other jurisdictions.
FIUs around the world have gained substantial experience in detecting and combating money laundering and it is essential that we understand and draw upon these experiences.
I understand that the Egmont Training Working Group has produced over 100 case studies which detail the techniques that are being used to achieve results at the operational level and only yesterday case studies were presented by FIUs including those from Belgium, Israel, Mauritius, Netherlands, South Africa and Thailand. These studies improve our understanding of the issues before us and they show the successes that can be achieved.
Role of The Egmont Group
Achieving co-operation, sharing technical expertise and developing mutual standards between FIUs is a difficult task. All FIUs share a common goal, but it is inevitable that there will be different structures and responsibilities.
It is the role of the Egmont Group to facilitate international cooperation and to provide a framework which will assist with the exchange of information.
I understand that the scope of this international cooperation has increased with the admission of 15 new FIUs who have joined the Egmont Group. This brings the total Egmont membership to 84 jurisdictions.
I want to personally welcome to the Egmont Group:
- Albania, Anguila, Antigua and Barbuda, Argentina, Bahrain, Dominica, Germany, Guatemala, Lebanon, Malta, Mauritius, Serbia, South Africa, St Vincent and the Grenadines.
I also welcome Malaysia, whose membership I understand has been sponsored by AUSTRAC.
You have all joined an important international coalition dedicated to building a global network against money laundering and terrorist financing. Membership will deliver benefits for your own countries and it adds strength to the international arrangements that are in place.
Importance of the Egmont Group to Australia and the Asia Pacific Region
While the Oceania and Asia regional groups within the Egmont Group are currently small, Australia looks forward to them playing an increasingly active role. This is the first time the Egmont Annual Meetings have been held in the Asia-Pacific. It is an auspicious occasion for Australia and for the entire region. I am pleased to learn we have representatives here today from some of our neighbours including the Cook Islands, Fiji, Indonesia, the Marshall Islands and Tonga.
The progress of Asia-Pacific nations in the past few years in meeting FAFT requirements has been pleasing. Several of the countries identified by the FATF in June 2000 as Non-Cooperative Countries and Territories have made significant and rapid progress in remedying their deficiencies against key international money-laundering standards. They have been removed from the FATF list. Other countries have made progress but need to undertake further measures.
Earlier this week, the Prime Minister announced the commencement of "operation Helpem Fren' (or Helping Friends) in the Solomon Islands. A key objective of Australia's strengthened assistance to the Solomons is the re-establishment of sound systems of governance, which will reduce the vulnerability of its financial system to the possibility of translational crime, money laundering and terrorist financing.
From Australia's perspective, Egmont Group membership provides a number of benefits.
- It helps us to ensure that FIUs in the region, and also around the world, are fully established and are working effectively.
- It fosters the exchange of financial intelligence which directly contributes to our domestic counter-terrorism, people smuggling and drug trafficking investigations.
- It facilitates the training and support of developing FIUs and it allows us to learn from other FIUs
This meeting represents the combined will and determination of the international community to fight money laundering and terrorist financing.
On behalf of the Australian Government, I want to congratulate the Egmont Group on its progress and achievements. You have the support of Australia and the Asia-Pacific region and we have been proud to host the meetings this week.
Our task is an important one and it is reassuring to see that the international community continues to take a positive and aggressive approach to stopping money laundering and confiscating terrorist funds.
Finally I would like to acknowledge AUSTRAC for bringing together such successful meetings. The Australian Government has a high regard for AUSTRAC and its achievements. Thank you also to the other government agencies and private sector sponsors who have contributed to this important event.