Second informal open-ended inter-sessional meeting

Vienna 7-9 October 1997

9 October 1997

3:34 pm

COMBINED NON-PAPER (money-laundering)

Recognizing that the problem of laundering of money derived from illicit trafficking in drugs and psychotropic substances, as well as from other serious crimes, has expanded internationally to become such a global threat to the integrity, reliability, and stability of financial and trade systems and even government structures, so as to require counter-measures by the international community as a whole in order to deny safe haven to criminals and their illicit proceeds,

Recalling the provisions of the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988, which calls on all parties to the Cinvention to declare money-laundering a punishable offence and adopt the necessary measures to enable the authorities to identify, discover and freeze or seize the proceeds of illicit drug trafficking,

Recalling the Commission on Narcotic Drugs Resolution 5 (XXXIX) which noted the 40 recommendations of FATF,established by the major industrialized countries (Group of Seven) and the President of the Commission of the European Communities, as the standard by which the anti-money-laundering measures adopted by concerned States should be judged, as well as the Economic and Social Council Resolution 1997/40 of 21 July 1997 which takes note with satisfaction of the document entitled "Anti-drug strategy in the hemisphere", approved by the Inter-American Drug Abuse Control Commission of the Organization of American States at its twentieth regular session, held at Buenos Aires in October 1996, and signed at Montevideo in December 1996, as a significant contribution to the strengthening of the Global Programme of Action adopted by the Genenral Assembly at its seventeenth special session,

Recognizing the political will expresed by the international community, especially reflected in such initiatives as the 1995 Summit of the Americas Ministerial Communiqué Concerning the Laundering of Proceeds and Instrumentalities of Crime, the 1990 Council of Europe Convention on Laundring, Search, Seizure and Confiscation of the Proceeds from Crime, and by such bodies as the Organization of American States Inter-American Drug Abuse Control Commission (OAS?CICAD), the Asia Pacific Group on Money Laundering (APG), the Caribbean Financial Action Task Force (CFATF), the Offshore Group of Banking Supervisors (OGBS), and the Commonwealth; all of which are well recognized multilaterl initiatives to combat money laundering, and also constitute legal or policy frameworks within which concerned States are defining and adopting their anti-money-laundering measures,

Aware that the proceeds of illicit trafficking in drugs and other illicit activities which are "laundered" through banks and other financial institutions constitute an obstacle to the implementation of policies designed to liberalize financial markets in order to attract legitimate investment, in that they distort those markets,

Emphasizing that there is a need to harmonize national legislations with a view of ensuring appropriate coordination of policies for combating money-laundering, without prejudice of the actions each country is undertaking within its own jurisdiction to combat this from of criminality,

Recognizing the need to promote and develop effective mechanisms for the pursuit, confiscation, immobilization and seizure of goods obtained through or derived from illicit activities, so as to avoid their use by criminals,

Recognizing that only through intenational cooperation and the establishment of bilateral and multilateral information networks, such as the Egmont Group, that will enable States to exchange information between competent authorities will it be possible to combat the problem of money-laundering effectively,

Emphasizing the enormous efforts of a number of countries to draw up and apply domestic legislation that identifies the activity of money-laundering as a criminal offence,

Realizing the importance of progress by all States in conforming to relevant recommendations and the need for States to participate actively in international and regional initiatives designed to promote and strengthen the implementation of effective anti-money-laundering measures,

1. Strongly condemns the laundering of money derived from illicit drug trafficking and other serious crimes as well as the use of countries financial systems for that purpose.

2. Urges all States to implement the anti-money-laundering provisions of the United nations Convention Against Illicit Trafficking in narcotic Drugs and Psychotropic Substances of 1988 and other relevant instruments, mentioned in the Preamble and in accordance with fundamental constitutional principles by applying the following principles:

(a) Establishment of a legislative framework to criminalize money-laundering resulting from serious crimes to provide for the prevention, detection, investigation and prosecution of the crimes of money-laundering, inter alia;

- the identification, freezing, seizure and confiscation of the proceeds of crime;

- international cooperation; and mutual legal assistance in cases involving money-laundering: and

- through the inclusion of the crime of money-laundering in mutual legal assistance agreements, for the purpose of ensuring judicial assistance in investigations, court cases or judicial proceeds relating to this crime:

(b) Establishment of an effective financial/regulatory regime to deny access to national and international financial systems by criminals and their illicit funds, thus preserving the integrity of the world's financial systems and ensuring compliance with laws and other regulations against money-laundering through:

- customer identification and verification requirements applying, the principle of "know your customer" so as to have available for competent authorities the necessary information on the identity of clients and the financial movements they carry out;

- financial record-keeping;

- mandatory suspicious activity reporting;

- removal of bank secrecy impediments that might impede the efforts directed to prevent, investigate and punish money-laundering;

- other relevant measures.

(c) Implementation of enforcement measures to provide tools for, inter alia:

- effective detection, investigation, prosecution and conviction of criminals engaging in money-laundering activity;

- extradition procedures;

- information sharing mechanisms.

3. Calls upon the UNDCP and the UNCPCJD to continue to work within the framework of their global programmes against money-laundering with (the FATF and other) relevant multilateral and regional anti-money-laundering and counter-narcotics institutions, and international financial institutions to give effect to the above principles by providing training, advice and technical assistance to countries that so request and where it is appropriate.