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FSVC Monthly Update – Anti-Money Laundering in Pakistan, Fiscal Transparency in Ethiopia and More!

Pakistan: Combating Trade-Based Money Laundering

From left to right: Syed Hasnain Haider Rizvi (Head of Compliance, Habib Metropolitan Bank) introducing the FSVC team: Edward Sia (FSVC Director), Waheed Rathore (Executive Director for Supervision – Banking & Insurance, Abu Dhabi Financial Services Authority), Lauren Pickett (Director of AML, U.S. Sanctions and FATCA, SIA Partners), Nathan Lynch (Head Regulatory Analyst, Thompson Reuters) and Michael Messier (Global AML Consultant). Karachi, Pakistan, October 2019

On October 27-29, FSVC, in collaboration with the Asian Development Bank’s Trade Finance Program and the State Bank of Pakistan, organized a conference in Karachi on trade-based money laundering for 250 financial sector representatives. Participants included regulators from the State Bank of Pakistan and senior management from Pakistani commercial banks.

Earlier in October, the Financial Action Task Force (FATF) published Pakistan’s latest Mutual Evaluation Report, which highlighted areas for improvement in Pakistan’s compliance with international anti-money laundering and combating the financing of terrorism (AML/CFT) standards.

During the conference, the FSVC volunteer experts addressed the FATF recommendations on trade-based money laundering and other issues related to AML/CFT. FSVC’s project successfully brought together relevant Pakistani stakeholders that are at the forefront of AML/CFT implementation and that need to coordinate their actions to enforce a comprehensive AML/CFT regime in Pakistan.

Tajikistan: Assessing the Banking Sector AML/CFT Needs

From left to right: Dilshod Fathullo (FSVC Program Officer); FSVC volunteer experts Mark Wasylechko (Director, Financial Crimes Advisory, Mazars USA) and Jeremy Kuester (Counsel, White & Case LLP); and Nancy Unklesbay (FSVC Program Officer). Dushanbe, Tajikistan, October 2019

During the first week of October, FSVC conducted an assessment of the Tajik banking sector’s AML/CFT regime. This assessment marked FSVC’s inaugural project in Tajikistan.

During the project, the FSVC volunteer experts met with senior management at the National Bank of Tajikistan’s Financial Monitoring Department to gain a better understanding of the central bank’s technical assistance needs in the area of AML/CFT, in light of Tajikistan’s 2018 FATF Mutual Evaluation Report. The FSVC volunteer experts also met with the heads of 8 local banks and microfinance institutions to assess AML/CFT compliance and implementation in the private banking sector. At the end of the week, FSVC presented the National Bank of Tajikistan a 15-step plan focused on enhancing strategic analytic capabilities and improving the quality of suspicious transactions reporting. The plan also included modules focused on building law enforcement capacity for conducting financial investigations.

FSVC’s work with the National Bank of Tajikistan and local banks will assist the country’s efforts to deter money laundering and terrorist financing, strengthen financial stability and increase financial inclusion.

Ethiopia: Improving Fiscal Transparency

Addis Ababa, Ethiopia

In October 2019, FSVC launched a new program in Ethiopia focused on strengthening governmental capacity in the area of fiscal transparency and public accounting. This 24-month program is funded by the U.S. Department of State’s Fiscal Transparency and Innovation Fund.

In 1991, Ethiopia embarked on an ambitious plan to reform the public sector through political decentralization and economic liberalization. This strategy proved difficult to implement and, almost 30 years later, the country remains heavily politically centralized, with an economy that is dominated by the public sector. Despite strong, public sector-led economic growth, the Government of Ethiopia has struggled to reduce poverty and promote fiscal transparency and accountability.

FSVC will work with the Government of Ethiopia to address these weaknesses through strengthening budgetary oversight by the legislative branch, the Supreme Audit Institution and the Ministry of Finance. More specifically, the program will 1) advance the accounting capabilities of the Ministry of Finance; 2) increase the ability of Parliament to oversee the national budget; and 3) improve the audit policies and procedures of the Supreme Audit Institution.

Angola: Enhancing Bank Supervision

BNA Governor José Massano and FSVC President & CEO, J. Andrew Spindler. Washington, D.C., October 2019

FSVC has launched a major new program in Angola focused on strengthening the central bank’s capacity in the areas of AML/CFT supervision and prudential banking supervision. This 18-month program, funded by the Angolan central bank, Banco Nacional de Angola (BNA),will help the BNA address these two priority areas. This program, undertaken in parallel with another FSVC program to build AML/CFT capacity directly with Angolan banks through the Angolan Banking Association (ABANC), should help instill confidence in the integrity of the financial sector.

FATF will conduct a Mutual Evaluation of Angola in 2021, and it will be important for financial stakeholders to demonstrate progress made in achieving technical compliance, as well as the effectiveness of AML/CFT frameworks and systems.

To address these issues, FSVC will work to strengthen the capacity of the BNA in bank supervision and AML/CFT frameworks that meet FATF requirements. The program will ultimately lay the groundwork for a successful compliance regime by enhancing the AML/CFT capacity of the BNA, allowing the maintenance and strengthening of linkages to the global economy.