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Money Laundering and Terrorist Financing

The main driving force behind transnational organized crime is the high profits that are generated through it. Transnational criminal organizations (TCOs) need to disguise the origin of this illicit money from law enforcement authorities in order to move, place and use the money for their personal use and for the continuance of their criminal operations. TCO’s and terrorist organizations engage in myriad criminal activities within the Customs arena, including: narcotics trafficking, weapons smuggling, intellectual property rights (IPR) infringements, human smuggling and trafficking, environmental crime, among many others. TCOs and terrorist organizations face many challenges in giving a legitimate appearance to these illicit proceeds as they attempt to store, move and integrate their illicit funds for personal use and for the perpet­uation of their illegal activities. Advances in international banking, the financial services industry and financial technology have afforded these bad actors a plethora of methods and vehicles for moving and laundering their illicit money. The movement of illicit money very often traverses international borders, and thereby enters the Customs domain. Hence, Customs authorities have an essential role to play in anti-money laundering activities as they are effectively the “tip of the spear”, due to their unique positioning at all border areas. The WCO established its Anti-Money Laundering/Counter-Terrorism Financing Programme in 2018 and has actively championed anti-money laundering efforts around the world for many years. The WCO utilizes its expertise in Customs-centric money laundering to enhance its Members’ ability to fight money laundering by raising awareness; developing training programmes, tools and information-sharing platforms; advocating best practices; and promoting the dedicated space for the closed user group “FinCRIME On-line Library” on the CENcomm platform, which includes a seizures database.

In 2001, the WCO issued a comprehensive anti-money laundering recommendation entitled the Recommendation of the Customs Co-operation Council on the need to develop and strengthen the role of Customs administrations in tackling money laundering and recovering the proceeds of crime. In 2005, the WCO revised the existing Recommendation on money laundering to include references to the relevant United Nations Security Council Resolutions and the new Financial Action Task Force (FATF) Recommendations. The revised WCO Recommendation, which reaffirms the role of Customs in the fight against money laundering and widens the scope of the Recommendation to cover terrorist financing, was adopted by the WCO Council in June 2005.

The WCO Anti-Money Laundering and Counter-Terrorism Financing Programme (AML-CTF) regularly conducts AML/CTF regional and national capacity building workshops for WCO Members, Financial Intelligence Units (FIUs) and national police services. It also conducts operations to counter bulk currency smuggling (BCS), gems/precious metals smuggling and trade-based money laundering in support of its membership. It also created and oversees Project TENTACLE, which was launched in 2019 as a multi-year anti-money laundering and counter-terrorism financing capacity building and operational effort. This Project entails the delivery of AML/CTF regional workshops in the African, Asia, Asia-Pacific, Eastern European, Middle Eastern and Latin American regions, with counter-BCS and gem/precious metals smuggling operations organized subsequent to the workshops. Project TENTACLE is funded by the U.S. Department of State Bureau of International Narcotics and Law Enforcement Affair. Operation TENTACLE-Asia Pacific was conducted in 2019, resulting in the seizure or interdiction of over $6 million (US) in currency and gems/precious metals, as well as the arrest of 15 individuals.

International co-operation between law enforcement authorities is a sine qua non for combatting cross-border money laundering. Customs and other law enforcement agencies around the world are confronted today with the phenomenon of the globalization of crime. Identifying and stopping illicit financial flows at the border is one of the most powerful ways to cut the financial lifeline of transnational criminal and terrorist organizations.

Partnership with other international organizations is an important component of the WCO’s anti-money laundering and counter-terrorism financing strategy. The WCO has been an active contributor to fora and initiatives of the FATF, INTERPOL, Egmont Group for Financial Intelligence Units and other relevant bodies. The global Customs community is strongly committed to working with its counterparts to fight against money laundering and terrorist financing.