Delisting the Mujahideen-e-Khalq (MeK)

Image source: US State Department

Two months ago, on 28 September 2012, the US Secretary of State formally removed the Iranian group, the Mujahideen-e-Khalq (MeK), from the US Government’s list of Foreign Terrorist Organizations (FTO) and delisted it as a Specially Designated Global Terrorist, in recognition of the group’s renunciation of violence. This is a significant milestone for the MeK which was first designated as an FTO by the US Government in 1997 and whose repeated attempts since then to be delisted have failed a number of times. The delisting follows similar rulings in the UK in 2008 and the EU in 2009. While Australia has never proscribed the MeK as a terrorist organisation, in December 2001 the Australian Government effectively froze the MeK’s assets and made it an offence to fund the group by adding the MeK to the Government’s ‘Consolidated List’—where it currently still remains.

The consequences of a poor anti-money laundering program: the HSBC case study

Image source: Flickr user photobunny

On 17 July 2012, the United States Senate Permanent Subcommittee on Investigations (the Committee) released a lengthy report detailing significant deficiencies in the anti-money laundering (AML) and counter-terrorism financing systems of one of the largest banks in the world.  The report is the result of a year-long inquiry by the Committee involving over 75 interviews and the examination of more than 1.4 million documents.  It reveals a long history of weak anti-money laundering controls resulting in the misuse of HSBC’s key US affiliate to launder the proceeds of drug trafficking, circumvent the prohibitions designed to prevent funds from being directed to rogue jurisdictions and to provide US dollars to banks linked to terrorist financing.

New international standards on countering money laundering and terrorist financing released

Image source: Flickr user Images_of_Money

On 16 February, the Financial Action Taskforce released its revised Recommendations for combating money laundering and terrorist financing, which now also cover financing of the proliferation of weapons of mass destruction. The FATF is an intergovernmental body established to develop and promote national and international policies to combat money laundering and terrorist financing. It was established in 1989 by the G7 and Australia is a founding member. With the cost of money laundering and underlying serious crime estimated to be between two and five percent of global GDP, it is important that the standards used by over 180 countries as the basis of their responses remain up to date and reflect emerging threats.