The Chairman had the speech at the 9th session of Subcommittee on justice and law and order “The Republic of Kazakhstan – European Union” concerning issue 7.2 “About measures taken by Kazakhstan to fight money laundering”
Dear participants of the conference!
Money laundering and terrorism financing are phenomena understood as the activity which is carried out with infringement of legislative norms. That is the ways by which offenders process the illegal or "dirty" money from any illegal activity (incomes from sale of drugs, human trafic, swindle, corruption etc.) by means of consecutive transfers and transactions until a source of the illegally appropriated funds becomes vague and money gets visibility of lawful or "pure" assets.
Progress of turnover of information, capital, people, material assets and services demands change of traditional concept and attitude to transnational crimes. Transnational criminal activity has, on the one hand, high level of the organization, and, on the other hand, information and financial support.
These factors are the impact for joint search of new ways and counteraction methods.
Kazakhstan gave and is giving particular attention to the question of creation and perfection of effective system of combating money laundering and terrorism financing in its any display.
The following international conventions are ratified:
- United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, Vienna;
- United Nations Convention Against Transnational Organized Crime, Palermo;
- International Convention for the Suppression of the Financing of Terrorism, New York;
- The Shanghai Convention on combating terrorism, separatism and extremism ;
UN Security Council Resolution1373 is accepted for execution.
The Minsk Treaty on Cooperation among the States Members of the CIS in Combating Terrorism is ratified.
The Dushanbe Treaty on Cooperation among the States Members of the CIS in Combating Legalization (Laundering) of Illegally Gained Income and Financing of Terrorism was signed and is subjected to the procedure of ratification at the moment.
Strasbourg Convention on laundering, search, seizure and confiscation of the proceeds from crime is in the process of ratification.
One of the relevant aspects of struggle against money-laundering and terrorism financing are questions of creation of suppression mechanisms of the given phenomena both on international and national levels.
It is generally admitted that the quantity and seriousness of acts of international terrorism largely depend on financing channels to which terrorists can get access, and it is impossible to counteract terrorism effectively without eradication of its financial basis.
Such problems as international terrorism, organized crime, drug-dealing directly infringe on national interests of each country.
Today international terrorists, radical streams and groups skillfully use economic and social problems, religionism and separatism. They widely apply achievements of technological progress: modern communication facilities, press, the newest kinds of explosives, weapon, their availability, and also distribution of modern transport communications.
These factors are the impact for joint search of new ways and counteraction methods.
The Republic of Kazakhstan has realized considerable work on creation and perfection of legal base on combating money-laundering and terrorism financing.
Creation in April, 2008 of the Committee on Financial Monitoring as a part of the Ministry of Finance was the first important step undertaken by Kazakhstan, its competence includes collection, processing and analysis of information on operations with money and (or) other property, subject to financial monitoring.
In August, 2009 the legislation on combating legalization (laundering) of illegaly gained income and financing of terrorism was adopted and brought into force in March of current year.
The basic role of the Committee on financial monitoring in the general system of combating money-laundering and terrorism financing is revealing of possible channels and sources of money-laundering and financing of activity of terrorist groups, and also preventive maintenance of «laundering» and terrorist activity, by granting information on conducted suspicious financial operations to the law enforcement bodies having the rights of operatively-search activity.
The Uniform Information Analytical System which as a matter of fact is an information network for collection, processing, storage, analysis and interchange of information in internal and international financial investigations was created for this purpose.
At the same time they conduct work on references of law enforcement bodies concerning check of physical and legal entities suspected of involvement in terrorist activity and its financing.
One of the key elements of counteraction to terrorism financing is formation of the List of organizations and physical persons which are believed to participate in terrorist and extremist activity.
This activity is directed at realization of execution of international obligations of Kazakhstan on closure of channels of financing of international terrorism, serves as a barrier for the use by the established persons and organizations of legal channels for transfer of money resources, and also helps to reveal use by terrorists of related and other communications in operation fulfillment.
Recognizing exclusive importance of actions on struggle against financing of terrorism the Republic of Kazakhstan consolidates the efforts on introduction of international standards in the sphere of combating money-laundering and terrorism financing especially considering special vulnerability of the noncommercial organizations to provide impossibility of their use in criminal intents:
a) terrorist organizations disguised under legal establishments;
b) as cover for terrorism financing, including with the purpose to avoid freezing of actives;
c) hide or disguise the latent diversion of funds intended for lawful activity, on financing of terrorist organizations.
Being based on special FATF recommendations (Financial Action Task Force) Kazakhstan considers financing of terrorism, acts of terrorism and terrorist organizations as penal act.
According to the legislation in the sphere of combating legalization (laundering) of illegally gained incomes and financing of terrorism subjects of financial monitoring with a view of prevention and suppression of facts of money-laundering and terrorism financing are obliged to inform immediately in the authorized body on suspicious operation before its fulfillment.
The Committee on Financial Monitoring makes financial investigations together with Finance Intelligence Units (FIU) of foreign states and realizes information exchange both in the sphere of combating laundering and terrorism and extremism financing.
Now the corresponding Memorandum with FIU of Ukraine is signed. By the end of the year it is planned to conclude similar Memorandums with FIU of China, Moldova, United Arab Emirates, Russia, Turkey.
Since 2004 the Republic of Kazakhstan is the member of the Eurasian group on combating money laundering and financing of terrorism (EAG) which is urged to play an important role in the issues of decrease in threat of terrorism and maintenance of transparency, reliability and security of financial systems of the states of region, and also involving of the states of region in the international system of combating legalization of criminal incomes and terrorism financing.
In October 2010 EAG held mission of estimation of national system of combating legalization of criminal incomes and financing of terrorism of Kazakhstan concerning its conformity to the international standards, its results will be considered at the Plenary session of EAG in summer of next year.
Realizing the importance of integration process in the sphere of struggle against laundering of incomes and terrorism financing, the Committee on financial monitoring intends to strengthen the further cooperation with competent bodies of other countries by means of joining the group FIU "Egmont".
In February 2010 the Committee submitted the declaration of entry to the given group. In June 2010 the representatives of the Committee took part in group Egmont session, thereby having declared readiness for cooperation with the states members of the group. In October 2010 this issue was considered at the sessions of working groups and they made decision on its representation at Plenary session of group Egmont which will take place in summer of next year.
Finally, I would like to notice that Kazakhstan as the member of international community, undertakes all necessary measures on of stability, security, counteraction to all threats to mankind and world, including terrorism (extremism), their financing and crimes shattering economic basis of the state.
Thank you for your attention!