US Annual Report on International Narcotics Control Strategy :: Maldives News :: Dhivehi Observer

US Annual Report on International Narcotics Control Strategy
Maldives should enact comprehensive anti-money laundering and counterterrorist financing legislation and ratify UN Convention against Transnational Organized Crime say US State Department

March 2005

Following is the country report abstract on Maldives which has been published by the US State Department as part of it's International Narcotics Strategy Report.

"The Maldives is not an important regional financial center. The financial sector of the Maldives is very small, with five commercial banks (one international bank, three branches of public banks from neighboring countries and the state owned bank), two insurance companies, and a government provident fund. There are no offshore banks. The Maldives Monetary Authority (MMA) is the regulatory agency for the financial sector. The MMA has authority to supervise the banking system through the Maldives Monetary Authority Act. These laws and regulations provide the MMA with access to records of financial institutions and allow it to take actions against suspected criminal activities. Banks are required to report any unusual movement of funds through the banking system on a daily basis. Separate laws address the narcotics trade, terrorism, and corruption: Law No. 17/77 on Narcotic Drugs and Psychotropic Substances prohibits consumption and trafficking of illegal narcotics. The law also prohibits laundering of proceeds from the illicit narcotics trade. Law No 2/2000 on Prevention and Prohibition of Corruption prohibits corrupt activities by both public and private sector officials. It also provides for the forfeiture of proceeds and empowers judicial authorities to freeze accounts pending a court decision.

The Government of the Maldives is in the process of drafting anti-money laundering legislation, with IMF assistance. The government has recently set up a Financial Intelligence Unit (FIU) within the MMA. Currently, there are no laws or regulations governing the FIU. Regulations to cover the FIU are expected to be included in the new money laundering legislation.

Law No. 10/90 on Prevention of Terrorism in the Maldives deals with some aspects of money laundering and terrorist financing. Provision of funds or any form of assistance towards the commissioning or planning of any such terrorist activity is unlawful. The MMA has issued "know your customer" directives and other instructions to banks, including freezing order requests, which are binding on banks and other financial institutions. The MMA monitors unusual financial transactions through banks, financial institutions, and money transfer companies through its bank supervision activities. The four foreign banks operating in the country also follow directives issued with regard to terrorist financing by their parent organizations. To date, there have been no known cases of terrorist financing activities through banks in the Maldives.

The Maldives is a party to the 1988 UN Drug Convention and to the 1999 UN International Convention for the Suppression of the Financing of Terrorism. The Maldives has not signed the UN Convention against Transnational Organized Crime.

The Government of the Maldives should enact comprehensive anti-money laundering and counterterrorist financing legislation that conforms to international standards. The legislation should include all regulations necessary to successfully establish the new Financial Intelligence Unit (FIU). The Maldives should also sign and ratify the UN Convention against Transnational Organized Crime."

There are some important things to note here. Especially why Gayyoom has not signed up to the UN Convention against Transnational Organized Crime? We have heard stories of his people being allegedly involved in smuggling weapons to Palestine with Air Maldives and also some of Gayyoom's associate business tycoons being involved in smuggling arms to Tamils in Sri Lanka as well as massive fraud and business transactions through the Singapore based tycoon Koli Ali Manik. I just wonder, could they be the reasons why Gayyoom is refusing to ratify this important treaty or perhaps he is just damn stupid and does not know what to ratify and what not. He did ratify the convention banning slavery. How convenient.

Full report is available on - http://www.state.gov/p/inl/rls/nrcrpt/2005/vol2/html/50357.htm