Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL)

www.coe.int/moneyval

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About Moneyval

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Yellow square Moneyval in brief
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Activities

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Evaluation

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Jurisdictions

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Publications

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Background information

The context

Money laundering, i.e. the process through which criminals give an apparently legitimate origin to proceeds of crime, is an expanding and increasingly international phenomenon It may particularly affect economies which are undergoing transformation and which offer significant opportunities for foreign investment. The financial regulatory framework, both in banking and non-banking sectors, is often less stringent in these countries than in others, which make them vulnerable to money laundering operations. Given the diverse illegal activities, including money laundering, of organised crime groups in some of these countries and, in exceptional cases, their alleged infiltration into entire national economies, it seems that it is in their vital interest to create and maintain a credible financial system capable of detecting, preventing and controlling money laundering.

In addition, recent experience has shown that organised terrorist groups also misuse the world’s financial system to fund their illegal operations, thus posing a serious risk to financial institutions of being used for hiding terrorist money. Measures aiming at the prevention and deterrence of money laundering therefore need to be extended to terrorist financing. 

The establishment of an efficient anti-money laundering system is due in many countries to the enforcement of national and international anti-money laundering measures and their regular monitoring through international bodies, such as the Financial Action Task Force on Money Laundering (FATF).

The monitoring, which implies evaluating each other’s performance in so-called “peer groups”, greatly enhances the compatibility of national norms with international standards in the financial, law enforcement and judicial sectors.

 

The Council of Europe’s action against money laundering and financing of terrorism

The Council of Europe was the first international organisation which emphasised the importance of taking measures to be used for combating the dangers of money laundering with respect to democracy and the rule of law.

In 1977, the Council of Europe’s European Committee on Crime Problems (CDPC) decided to establish a select committee of experts to look into the “serious problems raised in many countries by the illicit transfer of funds of criminal origin frequently used for the perpetration of further crime”. The work of this committee resulted in 1980 with the adoption by the Council of Europe’s Committee of Ministers of a Recommendation on measures against the transfer and safekeeping of funds of criminal origin which includes a package of measures for developing a comprehensive anti-money laundering programme.

Further work on the confiscation of the proceeds of drug trafficking was carried out through the activities of the Co-operation Group to Combat Drug Abuse and Illicit Trafficking in Drugs (known as the Pompidou Group) .

In September 1990, Ministers adopted the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds of Crime (ETS 141).

The aim of this Convention is to facilitate international co-operation and mutual assistance in investigating crime and tracking down, seizing and confiscating the proceeds thereof. The Convention is intended to assist States in attaining a similar degree of efficiency even in the absence of full legislative harmony. This Convention has been ratified by all Council of Europe member states, which makes it a particularly useful tool for international cooperation due to its various provisions on mutual assistance. Furthermore, it is opened also to countries which are not members of the organisation.

“The Strasbourg Convention” remains a landmark treaty which forms an important cornerstone of anti-money laundering standards. It has been widely ratified: to date, 48 States are Party to this treaty, including all 47 Council of Europe member States and one non-member State (Australia).

In 2003, the Council of Europe decided to update and widen the Strasbourg Convention to take into account the fact that not only could terrorism be financed through money laundering from criminal activity, but also through legitimate activities. This process was completed in 2005 with the adoption on 3 May of the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (CETS 198). This new convention is the first international treaty covering both the prevention and the control of money laundering and the financing of terrorism. The text addresses the fact that quick access to financial information or information on assets held by criminal organisations, including terrorist groups, is the key to successful preventive and repressive measures, and, ultimately, is the best way to stop them. The convention includes a mechanism to ensure the proper implementation by parties of its provisions, which has become operational in 2009 (Conference of the Parties to the Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (CETS 198)).