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Suriname Mutual Evaluation Report.
Post Plenary 2005
This report is subject to CFATF confidentiality regulations. Any authorization for the dissemination, reproduction and distribution of all or
part of it must be obtained from the CFATF Secretariat: [email protected]
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TABLE OF CONTENTS Abbreviations………………………………………………………………………….3 A. GENERAL…………………………………………………………………….4
a. Methodology used for the assessment…………………………………4
b. General Country Situation……………………………………………..5 c. General Situation of ML and FT………………………………………6
d. Overview of measures to prevent MLK and TF……………………….8 B. Legal Section………………………………………………………………….10 C. Financial Section………………………………………………………………19 D. Law Enforcement Section……………………………………………………..25
E. Conclusions……………………………………………………………………34
F. Recommendations……………………………………………………………..34 Annex 1: Table 40 FATF Recommendations…………………………………………38 Annex 2: Table 19 CFATF Recommendations………………………………………..40 Annex 3: Table 25 Point Criteria on NCCT’s………………………………………….42 Annex 4: Schedule of Interviews………………………………………………………44 Annex 5: Authorities’ response to the assessment……………………………………..46
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ABBREVIATIONS
AML Anti Money Laundering BIS Bank for International Settlements CALP Caribbean Anti Money Laundering Program CARICOM Caribbean Common Market and Community CBS Central Bank of Suriname CFT Combating Financing of Terrorism CCJ Caribbean Court of Justice CIFAD Inter-ministerial Center for Anti Drug Training (Fr.) CICAD-OAS Inter-American Drug Abuse Control Commission of the
Organization of American States DEA Drug Enforcement Agency DNFBP Designated Non Financial Business and Professions FIU Financial Intelligence Unit FIOD Fiscal Intelligence and Investigation Service FOT Financial Investigation Team KPS Suriname Police Force KYC Know Your Customer LIF Act regarding Identification by Service Providers MEM Mutual Evaluation Mechanism ML Money Laundering MLAT Mutual Legal Assistance Treaty MOT Financial Intelligence Unit MOU Memorandum of Understanding NAR National Anti Drug Council NCCS National Coordination Center of Suriname NCCT Non Cooperating Countries and Territories OG Official Gazette SRD Surinamese Dollar STR Suspicious Transactions report SLM Suriname Airways TF Terrorist Financing UBO Ultimate Beneficial Owner UN United Nations UTR Unusual Transaction Report
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A. GENERAL
a. Methodology used for the assessment
1. The second Mutual Evaluation of Suriname took place November 29 – December 3, 2004 in keeping with the agenda for the second round of CFATF Mutual Evaluations. This Mutual Evaluation was developed and conducted according to the CFATF procedures for Mutual Evaluation established by the CFATF Council of Ministers in 1999 and the reporting system for this second round Suriname Mutual Evaluation accordingly will follow these “traditional” procedures as agreed with the authorities of Suriname.
2. The benchmarks used in this second round Mutual Evaluation of Suriname were:
the 40 FATF Recommendations (as revised in 1996), the 19 CFATF Recommendations (as revised in 1999), and the 25 criteria for Non Cooperating Countries and Territories (NCCT). Whilst the objectives during the 1st Round of Mutual Evaluations were to observe and determine if the legal and institutional framework against money laundering were in place, this 2nd Round will accentuate the implementation and assessment of the success level of the established framework.
3. Suriname’s first Mutual Evaluation took place in November 2000 and the Report
was endorsed during Plenary and Council XIV, which took place October 2001 in the Dominican Republic. The Secretariat initially had invited designated Countries to submit suitable examiners, however it was necessary for the 2004 Suriname Mutual Evaluation on site visit to gather examiners who could read and understand the Dutch language. The Secretariat had to make this arrangement in close consultation with the Surinamese authorities because there was no suitable translation of the fairly new anti money laundering legislation of Suriname was available. This made it also necessary for the leader of the Mission to also participate as law enforcement expert for this Mission in order to cover the relevant law enforcement issues.
4. The interviews with the different authorities in Suriname were arranged by the
Office of the Attorney General and in particular by its Deputy Attorney General (Advocaat Generaal) Mr. Roy P. Baidjnath Panday. The Mutual Evaluation delegation consisted of Mrs. Roselle I.M. Garcia- de Weever, from the Netherlands Antilles as the Legal Expert, Mr. Prakash Mungra, from Aruba as the Financial Expert, and Mr. Russell Ursula, Deputy Executive Director of the CFATF Secretariat as Law Enforcement Expert and Mission leader.
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5. The Mission spanned five (5) working days with interviews covering all five (5) days and the last evening was also used for an exit meeting with the Minister of Justice, and the Mission Coordinating Committee which consisted of the head of the FIU, a representative of the Central Bank and the Deputy Attorney General. A copy of the original interview schedule is attached to this report as Annex A.
6. The examiners appreciate and are grateful for the efforts exercised by the Office
of the Attorney General and the Central Bank of Suriname to arrange the interviews and appreciate also the willingness of the authorities in Suriname to spend time with the mission and make valuable information available in a very frank manner. The mission is also very grateful to Mr. Radjinderkoemar Bhagwandas, Head of the FIU in Suriname, for its very valuable support to the mission during their stay in Suriname.
b. General Country Situation
7. Suriname is located on the Northeastern coast of South America. It shares its
borders with Guyana to the west, French Guyana to the east and Brazil to the South. Suriname’s surface area is 63,251 square miles with a population of approximately 482,000 (2004 estimate). The forested area constitutes about 85% of the national territory and is accessible only by air or via the north-south rivers. The Bauxite industry accounts for more than 15% of GDP. Besides the bauxite industry there are mining activities in the gold and oil sector. These activities together account for more than 20% of the GDP and about 75% of the export earnings. The official language is Dutch; most people also speak Sranang Tongo, which is a local English-based Creole. English, Hindi, Javanese and Chinese are also spoken.
8. Independence from Netherlands was granted in 1975. Five years later the civilian
government was replaced by a military regime. The military continued to rule through a succession of nominally civilian administrations until 1987, when international pressure finally brought about a democratic election. In 1989, the military overthrew the civilian government again with a so-called “telephone coup”, but a democratically elected government returned to power in 1991. The political climate in Suriname for the last 10 years has been strongly influenced by the transformation of an undemocratic government to a democratic one, based on the legitimacy of the government authority and the period of political isolation towards a period of strengthening and broadening of international contacts.
9. Suriname’s international trade policy aims now at participating actively in
regional integration initiatives and at integration in the world economy. Suriname has been enhancing cooperation with its direct neighbours in the region over the last few years. This is carried out especially with the CARICOM member states and also Brazil, Venezuela and France.
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10. The Mission was informed during interviews with Judicial authorities that the general crime situation can be best described by increased sophistication and a rising rate in the phenomenon of organized crime like trafficking in persons, illegal drugs, illegal weapons and money laundering with a tendency of hardening in the more classical types of crime like robberies, liquidations, kidnappings and other violent crimes. Drugs trafficking would be the number 1 problem with increased transportation via Suriname because of harsher controls set in place by Brazil. It is the impression of the Judicial authorities that Suriname is now more and more being used as a “bulk station” or “storage” place for large amounts of illegal drugs on its route to Europe or the United States.
OVERVIEW OF ARRESTS AND CONFISCATED DRUGS
1998 - 2004
Source Suriname Police
Year
Arrests
Cocaine in Kilograms
Marijuana in Kilograms
Heroine
XTC
M F
1998
229
34
284
104
-
-
1999
421
64
184
177
-
3000 tablets
2000
402
44
213
107
-
61232 tablets
2001
205
18
2253
46
-
-
2002
255
44
340
205
-
-
2003
396
89
815
120
111,1 grams
80 kg.
gr.material
2004
367
104
730
199
-
20084 tablets
11. Serious symptoms of corruption in some Government Agencies (Customs / Tax
Collectors Agency) have also been indicated during interviews with the Mission. The Government of Suriname is working on a Draft Anti-Corruption Bill to be able to deal with this issue while a consultancy agency has been hired to work along with the Customs Department in order to re-structure the agency and deal with the problems of corruption.
c. General Situation of Money laundering and Financing of Terrorism
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12. Like most Central American and Caribbean Countries Suriname also faces the
problem of large amounts of cocaine being transported from South American countries towards the European or North American continent. The country is still a hub for transhipment of cocaine mainly to Europe and the USA. XTC pills coming from Europe also find their way to the USA through Suriname.
13. Suriname is not a regional financial centre. The financial sector of the Republic of
Suriname comprises 7 Commercial Banks, 29 Credit Unions, 2 Money Remitters, 23 Cambios, 12 Insurance Companies, 30 Pension- and Provident funds, 1 Development Bank and 9 Investment and Financing Companies. There is no offshore sector or Free Trade Zone. Cambios conduct approximately 50,000 transactions each month amounting to some US$15,000,000.00 and money transferers conduct an estimate of 600 transactions daily at the amount of Euro 250,000. The volume of the Stock Exchange’s activities is approximately US$ 138,000.00 annually.
14. The Mission found that the Cambios and Casinos generally do not comply with
the Identification Act while the relatively large number of Cambios and Casinos (9 Casinos) also raised questions on the integrity of these sectors.
15. It is estimated that narcotics-related money laundering occurs primarily through
generally weak regulated private sector activities, specifically Casinos, Cambios, gold mining and car dealerships. Narcotics-related money laundering is closely linked to trans-national criminal activity related to the trans-shipment of Colombian cocaine and is believed to occur through both the non-banking financial system (i.e., money exchange businesses or Cambios) and through a variety of other means including, but not limited to, the sale of gold purchased with illicit money.
16. Other areas of concern mentioned to the Team are the creation of Foundations,
legal entities, reputedly set up for charitable purposes. It was indicated that initially these entities purchased land but they are sometimes used for commercial purposes instead of limited liability companies. It was said that applications to establish as limited liability companies could take years to process as the documents have to be signed by the President of the Republic before the companies could be legally formed
17. The Mission was informed during its visit that no specific cases of Financing of
Terrorism have been revealed to the Surinamese authorities as yet. Money laundering proceeds are believed to be controlled by both local drug-trafficking organizations and organized crime.
18. As of January 1st 2004 the Government of Suriname in collaboration with it’s
Central Bank made a significant change in the country’s currency by introducing the Suriname dollar [SRD] and at the same time replaced the Suriname Guilder
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[SRG]. To reach the value of the new SRD, one should divide the SRG by the factor 1000. In other words three zero’s at the end of a figure were taken out. The implementation of this currency change was finalized in May 2004.
d. Overview of measures to prevent Money Laundering and Terrorism
Financing
-Legal Framework
19. Suriname’s anti money laundering legislation was enacted in September 2002 and
became effective as of March 2003. This legislation has already been put to test on one occasion within the Courts of Suriname, which led to the successful conviction in a Money Laundering case (Rupping-Vernon case).
20. The Surinamese anti money laundering legislation consists of:
The Act Penalizing Money Laundering: In this law the laundering of money or other gains, which are illegally obtained from serious crimes, is a penal offence. Sanctions set forward are a maximum of 15 years imprisonment and a fine of 500.000 SRD. The Reporting of Unusual Transactions Act: According to this legislation all financial institutions, other intermediaries and also both natural and legal persons who render financial services are obliged to send Unusual Transactions Reports (UTR’s) to the Financial Intelligence Unit which is called “Meldpunt Ongebruikelijke Transacties” (MOT). There are also provisions regarding the establishment of the MOT and the sharing of information with other investigative and intelligence agencies and FIU’s abroad. It also introduced the list indicators regarding the financial and non-financial services. The Act regarding Identification by Service providers; The providers of those services as mentioned in the legislation are obliged to obtain the identity of the client by certain documents as indicated in the law and keep records of this information and the transaction for at least 7 years.
21. To combat money laundering in a more effective way a set of 5 additional Acts
were also passed through Parliament, which are: The Act regarding Confiscation of Illegally Obtained Gains; this act is an amendment to the Penal Code, the Criminal Proceedings Code and the Act on Economic Offences. It also contains provisions concerning extending punishments, the measures to increase the possibilities of seizure and confiscation and also arrangements for financial investigation. The Penalization of Organized Crime is an amendment to the Penal Code; The Penalization of Legal Entities which is an amendment to the Criminal Proceeding Act and the penal code with provisions concerning the punishability of legal persons;
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The Act regarding the Protection of the Endangered or Threatened Witness. This Act is an amendment of the Penal Code and the Criminal Proceedings Code in respect of protecting the witness; The Act regarding Mutual Legal Assistance, which is an amendment to the Criminal Proceedings Code.
22. Suriname is party to the 1961 UN Single Convention on Narcotic Drugs and the
1971 UN Convention on Psychotropic Substances. It is also a party to the 1988 UN Drug Convention and Suriname’s Narcotic Substances Act which became effective by decree of January 21, 1999 no.391/99 conforms to the drug interdiction portion of the 1988 UN Drug Convention (Vienna Treaty). Suriname has also signed and ratified the OAS Convention on Mutual Legal Assistance in Criminal Matters. The Criminal Procedures Act of Suriname in conjunction with the Vienna Treaty also gives a strong basis for international cooperation without a bilateral or multilateral agreement in place, but is subject to prior approval of the Attorney General.
-Institutional Framework
23. The Financial Sector and the Designated Non Financial Businesses and Professions of Suriname which are legally obliged to submit Unusual Transaction Reports are in need of a Supervisory Authority, which will have supervision in the area of compliance with anti money laundering and the financing of terrorism legislation and regulations. The Mission confirmed in its interviews that not all of the supervised financial institutions are (fully) complying with the laws regulating the identification of clients and the reporting of unusual transactions. The absence of a regulator overseeing compliance with the prevailing laws and regulations in the area of AML is highly missed.
24. The Mission was informed during its interviews that not all entities that are
subject to the Unusual Transaction Reporting requirement are filing Unusual Transactions Reports. It appears to the Mission that with the exception of the banking sector, the two money transfer companies and few of the notaries- there is insufficient awareness of this reporting obligation within the Surinamese financial sector. Regretfully the planned meetings with the Lawyers Association and with the Notaries Association were cancelled. The latter without a proper explanation and confirming the Mission’s impression that especially the Notaries in Suriname have yet to be convinced of the importance of having anti money laundering measures in place.
25. The Law Enforcement institutions in Suriname are generally coping with a severe
lack of financial human and technical resources. Donations and development cooperation assistance in the form of finances, training or equipment from Countries like the US, the Netherlands, and France as well as the OAS-CICAD organization are forming important and indispensable components to the budget of these Surinamese services.
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26. The MOT Suriname has been operational since June 2003, within the Ministry of
Justice and Police and has already proven its right of existence with a successful money laundering case in front of the Courts of Suriname as mentioned above. However, The Mission found that the MOT is not sufficiently staffed to effectively and efficiently fulfill its duties. This is surely the case in view of the departure of the Dutch consultant (who temporarily assists the Surinamese MOT) in the near future. Also the housing allocated to the MOT is not completely adequate and security aspects could be enhanced.
27. The Courts of Suriname are very much aware of the new Anti Money laundering
legislation in Suriname. However, the Courts are severely under staffed and if this situation persists longer it may pose problems for the whole of the judicial procedures in Suriname with serious consequences for the democratic processes in the Country.
28. While police may have incidental cases of corruption, Customs are indicated to
have serious problems with corrupt members in the organization. The Tax and Comptrollers Office has also been pointed out during interviews with the Mission as a Government service with high risk for corruption.
29. The Mission has been convinced that different cooperation structures exist
between the different law enforcement services in Suriname and also with international entities. However more cooperation structures are needed involving Customs and Tax Collectors office with the FIU while the FIU has to expand its cooperation network with the financial sector in Suriname.
B. LEGAL SECTION
General
30. Since its last evaluation in 2002, Suriname has adopted several anti money laundering legislation in order to (further) implement its international obligations under the (C)FATF Recommendations and the Vienna Convention. New legislation is as follows:
2) The Act Penalizing Money Laundering (Official Gazette (O.G.) 2002 no. 64)(“ML Act”).
3) The Reporting of Unusual Transaction Act (O.G. 2002 no. 65: “MOT Act”), with indicators for detecting unusual transactions (OG 2003 no. 45).
4) The Act regarding Identification by Service Providers (O.G. 2002 no. 66: “ LIF” Act).
5) The Act regarding Confiscation of Illegally Obtained Gains (“Plukze” Act) (O.G. 2002 no. 67).
31. Other important pieces of legislation that were adopted in 2002 are: 6) The Act Penalizing Organized Crime (O.G. 2002 no. 69). 7) The Act Penalizing Legal Entities (O.G. 2002 no. 68).
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8) The Act on the Protection of Endangered or Threatened witnesses (O.G. 2002 no. 70).
9) The Act on International Legal Cooperation (O.G. 2002 no. 71)
It can be concluded that a great amount of legislation has been enacted by the Surinamese Authorities in a short period of time.
32. The Mission was also informed of existing draft Bills on:
1) A new Banking and credit Supervision Act; 2) A Pension Fund Supervision Act.
Under consideration to be drafted by the Surinamese authorities are also:
3) An Act on the Supervision of Exchange Offices and Money Transfer Companies. 4) A Foreign Exchange Act. 5) An Act on the Supervision of Insurance Companies Criminalization of Money Laundering:
33. The ML Act (O.G. 2002 no. 64) criminalizes money laundering of all proceeds of offences as defined in the Suriname Penal Code and other criminal laws either engaged by a natural person or a legal entity. The intentional laundering, laundering through default moreover the habitual laundering of subjects are penalized under the ML Act. ‘Subjects’ is broadly defined and comprehends all assets such as money (cash), securities, gems, claims, and real estate. In accordance with the Explanatory note on this Act it is not necessary that a Judge identifies the exact underlying offense of which the proceeds are being laundered. The text of the ML Act complies with the respective FATF Recommendations (4
and 5) and CFATF Recommendations (4).
Bank Secrecy:
34. Suriname has no bank secrecy laws. The General conditions of banks state that no information can be given to third parties. However the Attorney General’s office can directly obtain any information from the banks upon request. FATF
Recommendation 2 is therefore complied with. There are no legal provisions or guidelines of the CBS prohibiting bearer or numbered accounts. However the mission was informed that these are not permitted in practice.
Confiscation of Proceeds of Crime:
35. The “pluk-ze” Act (O.G. 2002 no. 67) is an amendment of the Penal Code and the Penal Procedures Code in order to elaborate on and incorporate confiscation measures in the legal system. This Act makes possible Confiscation of property whether or not obtained from or derived from proceeds of crime (including all offences under the law). The Act complies fully with Article 5.1, 5.6 and 3 of the Vienna Convention. Until now only Surinamese $3000 has been confiscated under the provisions of this law. Draft legislation is being prepared to install a
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Seized Assets fund. In this fund all proceeds resulting form the application of the “pluk-ze” law will be deposited and used for the Attorney General’s Office, police and the Minister of Finance (information obtained from the acting Attorney General). CFATF recommendation 9 is therefore not yet met.
Penalization of Legal Entities and Penalization of Organized Crime:
36. The Penalization of Legal Entities Act (O.G. 2002 no. 68) is an amendment to the Penal Code and the Penal Procedures Code and has as goal the criminalization of legal persons and entities as such. With the enactment of this act FATF
Recommendation 6 has been met. The Act criminalizing organized crimes is an amendment to the penal code to incorporate a legal basis for the criminalization of crime committed as part of an organization.
37. The Penal code and the Penal procedures code meet FATF Recommendations
3,4,5,6,7,37 and 40. The ML Act has been put into practice for the first time last year in the so-called Rupping-Vernon case since its enactment in 2002. In this case verdicts were given for the violation of the ML Act, the Act Penalizing Organized Crime and the Act Penalizing Legal Entities (information obtained from the Attorney General’s office).
38. It was feared that with the introduction of the ML Act, the lack of evidence of the
predicate offence might pose a problem. However the Court assumed that since drugs have been found at the house of the defendant a drug crime must have been committed. The Mission concluded from conversations with the (acting) Attorney General, the prosecutors, the acting President of the Court of Justice and the police, that the actual legislation is sufficient to convict ML offences.
39. Moreover the Act Penalizing Legal Entities has been applied in a case where a
commercial bank as an institution has and is still being investigated for violations of the foreign exchange law at the time of the visit of the Mission. However, the Mission was also informed that due to a lack of judges, (adequate) personnel, means (both financial and otherwise) the imposing of and execution of aforementioned Acts still pose problems. The post of President of the Court of Justice has been vacant for 6 years now and no one has been nominated up to the visit of the Mission.
40. The Court of Justice should consist of 15 members in accordance with the Law on
Judicial Organization (wet R.O). Only 7 judges were in function at the time of the visit of the Mission. The Mission was also informed that a lot of cases were not prosecuted (“sepot”) due to aforementioned problems. The Attorney General’s Office has also requested the government to propose to the Parliament more legal possibilities to execute a fast track system (“snelrecht”) namely for the execution of drugs couriers cases.
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The MOT Act:
41. The MOT Act came into force in September 2003 (O.G. 2002 no.65). This Act
provides the legal basis for the FIU: “Meldpunt Ongebruikelijke Transacties” (MOT). MOT has been operational since June 2003. The main tasks of the MOT are:
a. To collect, register, process and analyze the data obtained by it, in order to determine whether this data may be important to prevent and detect money laundering and the criminal offences that are the root thereof;
b. To furnish data in accordance with the stipulations laid down in or pursuant to this national ordinance (Article 2 MOT act). (FATF Recommendations 14 and 15 are met).
42. The MOT Act is quite up to date in the sense that not only banking and non
banking financial institutions are subject to its provisions but also notaries, real estate agents, accountants, administrative offices, law firms, traders in gold and other precious metals and precious stones, car dealerships, casino’s and other gambling businesses (the Designated Non Financial Businesses and Professions: DNFBP’s). Financial and Non Financial Service Providers are obliged to report unusual transactions to the MOT in accordance with indicators established by State Decree (O.G. 2003 no.45). The legal protection of the reporters is provided for in Articles 18 and 19 of the MOT Act.
43. Section 22 of the Act prohibits the tipping off of clients by reporters.
Contracts cannot be voided under the MOT Act. The Attorney General however can ex officio require the void of an agreement ex officio, which was contracted in violation of moral law. With the enactment of the MOT Act FATF
Recommendations 14, 15, 16 and 17 are complied with.
44. Article 9 of the MOT Act states that the exchange of information with other FIU’s
is only possible based on a Treaty. In practice however a MOU was agreed upon with the Netherlands, without a treaty thus without a legal basis. The problem that can arise from this is that the information obtained can be considered as illegally obtained information and therefore dismissed by the Court in a possible future case. Article 9 of the MOT Act must therefore also include the possibility of exchange of information via a MOU.
45. The Mot Act only has penal provisions in case of violations. It does not have any administrative (e.g. fines) or civil sanctions that are in practice more easily enforceable and more effective.
46. There is no control mechanism incorporated in the MOT Act. In other words: the
Act charges no institution or supervisory authority with the supervision of compliance by the financial service providers. Despite this official point of view
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supervisory authorities of financial institutions must report to the MOT any money laundering activities or suspicions thereof, which they encounter when conducting their supervisory tasks (Article 13 MOT Act).
47. The Suriname Central Bank is in accordance with the Banking Supervision Act
and the Central Bank Act (Article 9 sub d Central Bank Act) charged with the prudential supervision of the financial institutions (credit institutions, credit unions, insurance companies and pension funds). However the Surinamese Central Bank’s authorities informed the Mission that they do not consider the supervision of the compliance with the MOT Act a task of the Central Bank, as this is not explicitly stipulated in a legal provision.
48. The supervision of the observance of the MOT Act for the Designated Non
Financial Businesses and Professions is also not provided for in this MOT Act which makes these provisions in practice non enforceable. The MOT is the institution assigned to supervise the maintenance of the provisions of this law, according to the Head of the MOT. However this is not clear from the Act. The non-financial service providers are, with the exception of notaries and lawyers who have their representative organizations, not organized in a professional body.
49. Due to the absence of a provision for the supervision of compliance with the
MOT Act other technical issues and some FATF recommendations (13, 26, 28, 29) cannot be tackled/executed. E.g.: the appointment of a compliance officer within the financial and non financial service providers, amongst others, review compliance with the institution’s policy and procedures, and execute closer investigation on unusual or suspicious transactions cannot be legally enforced. Normally these recommendations should be included in guidelines or conditions to license the operation of the business (FATF Recommendations 19, 20, 21) while being supervised by established and indicated supervisory authorities.
50. The Association of Notaries, despite a requested and existing appointment, did
not receive the Mission. Therefore it could also not be determined how Notaries were observing the obligations of the MOT Act.
51. It is therefore recommendable that the MOT is explicitly appointed as the
Supervisory Authority for the Designated Non Financial Businesses and Professions with regard to the observance of the MOT Act. A possibility is the installment of an enforcement unit within the MOT which will conduct both (on-site) inspections and when necessary prosecute violations of the Act. A problem might be the existing shortage of personnel at the MOT at the time of the visit of the Mission. It is recommendable to include reporting of transactions linked to possible Terrorist financing in the MOT Act. It is also recommendable to organize the non-financial service providers into a professional organization, which will benefit the supervision and enforcement of the AML/CFT standards included in the MOT Act.
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The Act regarding Identification by Service Providers (LIF Act):
52. In accordance with Section 2 of the LIF Act (O.G. 2002 no.66) all providers of financial and non-financial services are obliged to establish the true identity of their customers before rendering any financial services. Banks, Cambios, stockholders, life Insurance companies, money remitters, credit unions, notaries, real estate agents, accountants, administrative offices, law firms, traders, traders in gold other precious metals and precious stones, car dealers, gambling businesses and casino’s are subject to the provisions of this law. Furthermore they are obliged to record Identification Documents and keep these records for at least 7 years after the transactions took place. This act complies fully with FATF
Recommendation 12.
53. Fiduciary company services, investment companies and administrators of international companies and free zone companies are not incorporated in this law. However, the Mission was informed that Suriname does not have an offshore sector and does not have any investment companies and free zones operating within Suriname.
54. The LIF Act is like the MOT Act lacking of a provision that entrust an authority
(or authorities) with the task of supervision of the compliance with this Act. The LIF Act also only has penal provisions in case the LIF Act is violated. It does not have any administrative (e.g. fines) or civil sanctions, which are in practice easier enforceable and in practice more effective. The establishment of the ID of the Ultimate Beneficial Owners (UBO) is not elaborated on in the LIF Act.
Supervisory Authority of Financial Institutions:
The Central Bank Act (OG 1956 no.97)
55. The Central Bank Act states the powers and functions of the Central Bank of Suriname (CBS). In accordance with Article 9-sub d of this Act is the CBS entrusted with the supervision of the bank and credit system of Suriname. The CBS is charged with the supervision of banks, savings & loans credit unions, insurance companies, exchange offices, pension funds, and savings & credit funds.
Banking Supervision Act (OG 1968 no. 63)
56. This Act contains the supervisory tools for the CBS to perform its duties. No credit institution or credit union can commence its business without a declaration of no objection of the CBS (Article 5, paragraph 1) The term “credit
institution” includes insurance companies and pension funds. At the moment 3 ‘licenses’ are required for a credit institution to operate as such in Surinam:
� A declaration of no objection to conduct the business of a credit institution
� A license from the Minister of Commerce and Industry to operate a business
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� And, a license of the Foreign Exchange Commission if the institution offers services in foreign currency.
57. The CBS has admission requirements for the admittance of credit institutions
based on the Article 5, paragraph 3: Admission as a credit institution can not take place if this (may) violate a sound banking and credit system. Due to this extensive interpretation of Article 5, paragraph 3, screening of directors and founders of a credit institution takes place when admitting a credit institution. However there is no legal provision for continued screening procedures.
58. There is no specific legal provision stating the conditions for the withdrawal of a
declaration of no objection and no jurisprudence on how a declaration of no objection can be repealed (this in accordance with info the Supervision Department and Legal Department of the CBS). There is no specific provision stating that managing and supervisory directors must be approved by CBS before being appointed as such. If a fact occurs which indicates that a director of a financial institution is not being lawful, it is not possible for the CBS to dismiss this director under the current legislation. Moral persuasion is currently the only possible tool to force a director to step down.
59. The selling or exchange of shares in a credit institution is not subject to any
approval of the CBS. However the selling of the shares to another credit institution is. The draft of the new Banking Supervision Act the Mission received addresses the abovementioned concerns greatly. However the mission was informed that the management of the CBS and the Minister of Finance for the reason that Basle II has to be incorporated in the draft has detained the actual draft. The Surinamese authorities are recommended not to wait for these amendments but to diligently submit to the Parliament the existing draft. The current draft should be strengthened in some areas, however this could be done in a relatively short period of time. Incorporation of the Basel II capital accord in the current law will take much time and should not be a first priority in view of the obsolete law currently in place.
60. New AML guidelines for credit institutions have been prepared by the CBS.
However these have not been implemented yet due to a lack of legal basis in the Banking Supervision Act according to the Coordinator of the Supervision Department of the CBS. In 1996 an AML gentleman’s agreement was established with the credit institutions supervised by the CBS. However the Mission was informed that when conducting onsite examinations the enforcement of the guidelines are not checked by CBS examiners.
61. According to the President of the CSB the supervision of compliance with the
MOT and LIF provisions is not the responsibility of the CBS. According to the President of the CBS the focus of supervision of the CBS is compliance with the Banc for International Settlements (BIS) norms. The compliance with AML/CFT standards and regulations are not part of the official tasks of the CBS according to
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this body and the supervision is solely aimed at prudential supervision. It appeared to the Mission that formal involvement of the CBS as Supervisory Authority with regard to AML aspects has ceased altogether with establishment of the FIU.
Cooperation between MOT, Supervisor(s), and other Competent Authorities:
62. The CBS is to inform the FIU if it encounters money-laundering cases when
executing its supervisory tasks. (Article 13 MOT Act) At the moment however no AML onsite inspections are being done by the CBS.
63. The actual Banking Supervision Act does not contain provisions for the exchange
of information with other Supervisory Authorities locally or abroad. The Mission was informed that this exchange of information however does occur informally. The legal possibility of exchange of information with Customs and the Attorney General’s office is needed according to information received during the interviews. This however is not provided for in the Customs law or the MOT Act. NCCT criterion 15 is therefore being met.
64. Up till now there is one Treaty on the exchange of information with regard to
Customs (and taxes) in preparation with the Netherlands. With France a protocol has been discussed and the agreements made in this protocol have to be ratified. A provision that allows the exchange of information between MOT and other relevant government offices is recommended.
International Cooperation:
65. The Act on International Legal Cooperation (O.G. 2002 no. 71) has been enacted in 2002 and is an amendment of the Penal Procedures Act. The law opens the possibility for Surinamese authorities themselves to request for cooperation (this was not legally stipulated before). Furthermore it extends the legal basis for international legal cooperation in the sense that now no treaty is necessary for the local authorities to comply with a request for legal assistance. This enables the authorities to exchange information with countries that do not have a bilateral agreement with Suriname or which are not parties to a multilateral agreement (FATF recommendation 38 is complied with).
66. The mission was informed that requests (from USA, France, Belgium and Brazil)
for legal assistance are granted based on the Vienna Convention. The Palermo Convention has not been signed or ratified but procedures to become a Party have been started. Suriname has ratified the OAS Convention against Corruption. The executive legislation is at the moment in the National Parliament to be discussed. Suriname is also party to the Organization of American States and participates in the Mutual Evaluation Mechanism (MEM). There is an Extradition Treaty with the Dutch Kingdom since 1976. In 1992 it was amended to include a new Protocol.
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67. Suriname civilians are not extradited on the request of a foreign country. However, in accordance with Suriname law the person in question can be prosecuted and tried in Suriname on request of the foreign prosecutors. The crime committed also has to be an offense under Suriname law otherwise the extradition or prosecution in Suriname cannot take place. Money Laundering is an extraditable offense under the Suriname laws.
68. There are no asset sharing agreements with other countries neither are confiscated
assets in practice shared with other countries. The Suriname Penal Procedures Code does not have provisions on controlled delivery and under cover practices. In practice these investigation methods are still being used. The Vienna Convention is cited as the legal basis for these operations. Article 11 of the Vienna Convention is therefore in practice met. In 2002 the Criminal Procedures Act was amended to create the possibility of protected witnesses. The Attorney General’s office also has established a special desk to attend requests for legal assistance.
69. Suriname ratified the Vienna Convention in 2002. With the enactment of aforementioned pieces of legislation, together with the existing Penal and Penal procedures legislation moreover the policy/practice of enforcement by governmental authorities, it can be stated that this Convention has been implemented as far as the required AML legislation and AML policies are concerned (FATF Recommendation 1).
Legislation:
71. As in other Countries it takes a long time before laws are enacted in Suriname. The processes to get a draft law agreed upon by all parties concerned are posing some problems to get some aspects in the AML/CFT framework of Suriname going. E.g. an amendment to the Central Bank law of 1956 has been with the body to Council the Government (Staatsraad) on the technical aspects of the amendment for about one year already. A new Banking Supervision Act has also been drafted, as explained earlier in this report, but this draft has been withheld to incorporate eventual amendments necessary to incorporate Basel II on request of the CBS. The Foreign Exchange Act is outdated and needs to be amended or replaced.
UN Resolutions TF:
72. There are no executing Acts or other regulations of the UN Resolutions of the Security Council. The question arises how the banks and other institutions in Suriname are executing possible freezing measures in the case of terrorist financing or terrorist assets. Banks indicated that they are responsible for the execution thereof and if terrorist financing occurs they will inform MOT and the Attorney General’s Office accordingly.
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C. FINANCIAL SECTION
The Central Bank of Suriname (CBS):
73. The CBS is entrusted with the supervision of banks, insurance companies, and pension funds. It should be noted that Suriname has no financial offshore sector. The current supervision on banks, insurance companies and pension funds is based on the quite outdated Act of 1968 on the Supervision of the Banking and Credit System. Until now the supervision of the CBS is limited mainly to monitoring the solvency and liquidity of the supervised financial institutions. This is causing Suriname not to be in effective compliance with CFATF Recommendation 11, and may pose
Suriname to meet NCCT criterion 1. 74. The Act of 1968 on the Supervision of the Banking and Credit System does not
provide the CBS with a legal basis to issue AML guidance notes for the financial institutions under its supervision. This again can cause Suriname to be not in compliance with FATF Recommendation 26. Notwithstanding the aforementioned, the CBS, in an effort to raise the awareness of the risks financial institutions face to be used by money launderers, has issued in 1996 - in agreement with the representative organization for banks - non-binding guidelines for the prevention of money laundering.
75. It should be noted however that these non-binding guidance notes are very general in
nature and that the CBS does not conduct any supervisory oversight in this area. The new draft Act on the Supervision of the Banking and Credit System is much more in compliance with the Basel Core Principles for Effective Banking Supervision and will provide the CBS with a solid legal basis to maintain the integrity of the banking sector and to issue comprehensive AML-guidelines.
76. The CBS has already drafted detailed AML guidelines for the financial sector, which
will be issued after the enactment of the new supervisory laws for the banking and insurance industry. The Mission was informed by the CBS that also a separate Act for the Supervision of Insurance Companies is being drafted and that, once enacted, will provide the CBS with a solid legal basis to issue AML guidelines for the insurance sector and maintain the integrity of this sector. The Mission applauds the initiatives taken by the CBS to modernize the supervisory framework for the financial sector, but is of the opinion that more decisive action should be taken in this area.
The Surinamese Financial Intelligence Unit (The MOT)
77. The MOT Act on the reporting of unusual transactions came into effect in September 2003. Subsequently, all financial service providers / designated
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professional intermediaries are obliged as of latter date to report unusual transactions, based on the so-called objective and subjective indicators established by law, to the Surinamese Financial Intelligence Unit. The MOT became operational in June 2003. Until September 2004 only 7 of the 106 entities registered by the MOT have started to report unusual transactions. This surely can lead to Suriname not complying as it should with FATF Recommendation 15.
Statistics on received Unusual Transaction Reports
Period Numbers Unusual Trans. Reports
4th
quarter 2003 276
1st quarter 2004 232
2nd
quarter 2004 129
3rd
quarter 2004 6931
Total 1330
78. The MOT is assigned by law to collect, process and analyze the Unusual
Transactions Reports (UTR’s) and report those transactions that are considered suspicious by the MOT (via the Office of the Attorney General) to the police authorities. The MOT falls under the ministerial responsibility of the Ministry of Justice and must report periodically to the Office of the Attorney General. The MOT informed the Mission that it has full autonomy over its daily affairs. The Suriname MOT is not yet a member of the EGMONT Group but is contemplating procedures to become a member.
79. Not all entities that are subject to the Unusual Transaction-Reporting requirement
have so far filed unusual transactions reports. It appears to the Mission that - with the exception of some banks, the two money transfer companies and some notaries- there is insufficient awareness of this reporting obligation. The absence of a regulator overseeing compliance with this MOT Act as well as with the LIF Act is highly missed in the financial sector of Suriname. The MOT on the other hand is keeping well-documented statistics on received and disseminated UTR’s.
80. It is the view of the Mission that the MOT is not sufficiently staffed at this
moment to fulfill its tasks. At present, the MOT consists of 4 persons (1 Director, 1 Data Typist, 1 Financial Analyst, and 1 part-time temporary Consultant from the Dutch MOT whose contract will soon elapse). It has been indicated to the Mission that at present expansion with the minimum of one (1) lawyer and one (1) extra administrative assistant is required to be able to cope with the work at hand. There is a backlog with respect to the processing and analyzing of Unusual Transactions
1 The increase of UTR’s in the 3rd quarter of 2004 is mainly due to information sessions held with Compliance Officers of the Financial Sector
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that date from the time before the MOT became operational. Information sessions with all subjects that fall under the Unusual Transaction-Reporting Act is also lacking because of this shortage of staff. The MOT is also because of scarcity in staff not yet disseminating typologies on ML and TF trends to other entities in the public and the private financial sector.
81. The MOT is located in a spacious office and has sufficient technical equipment
and computers to work with at this point in time. However, the Mission is of the opinion that the security aspects of the office of the MOT can be improved upon in order to prevent possible break and entries into the office. The Mission is also aware that the Head of the MOT is still working under a very un-attractive enumeration from his previous job at the Ministry of Finance. The Mission considers that the Government of Suriname should be diligent in attracting and keeping qualified staff in its FIU and should pay the necessary attention to the enumeration of this staff (NCCT Criterion 24). The Mission has also been informed that more and continuous training for the MOT staff is necessary.
Banks:
82. The Mission found out that not all interviewed banks were in (full) compliance with the identification and reporting of Unusual Transactions acts as required by FATF Recommendation 15. The Surinamese Bankers’ Association (SBA) noted that the Surinamese Financial Intelligence Unit (the “MOT”) only became operational since June 2003 and that it was not possible as of the date the Unusual Transactions Reporting Act was implemented to file unusual transaction reports at the MOT. The SBA noted that although there have been some improvements, the MOT is still not sufficiently staffed to process and analyze all reports and that further improvements in staffing, housing and automation are required. Deficiencies in this area may cause Suriname to meet NCCT Criteria 23.
83. It was also discovered that, in general, the know-your-customer (KYC) policies
and procedures followed by the banks should be strengthened in order to fully comply with FATF Recommendation 14 and 19 and to avoid meeting NCCT
criterion 5. The role of the compliance officer in most instances is limited to the reporting of Unusual Transactions. Even at the larger banks the compliance function was not a full-time job. Also, in most cases the internal audit department did not perform compliance reviews in this area.
84. Not all financial institutions interviewed by the Mission had detailed anti-money
laundering manuals and codes of conduct in place. The absence of detailed AML-guidelines and a regulator overseeing compliance herewith is highly missed (FATF Recommendations 26, 27 and 28).
85. The Mission was also informed that the reporting of unusual transactions, based
on subjective indicators, is still limited. This indicates that there is ample room for further training in the area of detecting money laundering. At this point in time
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this is not being done in accordance with FATF Recommendation 31. It should be noted though that some encouraging initiatives have been taken. However, further progress in this area is necessary.
Insurance companies:
86. The Mission discovered that not all interviewed insurance companies are applying
the unusual transaction reporting requirements correctly and as such did not report all transactions that fall under the reporting obligation as stated in FATF
Recommendations 15 and 18. The insurance companies also confirmed that it would be very helpful if the MOT would organize regular information sessions for the insurance sector.
87. Not all interviewed insurance companies had detailed anti-KYC policies and
procedures in place in accordance with FATF Recommendation 19. The insurers informed the Mission that they are fully complying with the identification requirements imposed on them by law and that the client files contain information on the ultimate beneficial owner(s) of the (life) insurance policies issued. However, as stated previously in this report there is no supervisory oversight in the area of AML by the CBS via (targeted) on-site examinations.
88. In general, the insurers felt that the risks of being used by money launderers are
quite limited in their businesses. The volume of life insurance policies, which insurance product was considered the most vulnerable for money laundering purposes, is very limited. The high inflation rates and the associated depreciation of the Surinamese currency in the past were given as an explanation for the low volume of life insurance businesses.
Cambios:
89. Cambio’s are regulated by the Foreign Exchange Act (O.G. 1947 no. 136). This
Act is for Foreign Exchange data purposes. There are indicators to detect unusual Transactions at Cambios. However, as commented previously, the CBS does not perform AML examinations. In accordance with the foreign exchange regulations residents can export up to US $10,000 without a license.
90. According to the Surinamese authorities there are 23 Cambios operating in
Suriname. Before a Cambio can start its operations it needs a “certificate of no objection” from the CBS. The certificate does not contain any AML-requirements. The Cambios fall under the Unusual Transaction Reporting obligation and are also obliged to report their Foreign Exchange transactions to the CBS, however they do not fall under a supervisory regime with strict AML-requirements and thus are not functioning in accordance with FATF
Recommendation 27 and CFATF Recommendation 11.
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91. The relatively large numbers of Cambios have also raised (unanswered) questions within the (financial) community on the integrity of this unregulated sector. There are also serious doubts whether all Cambios can make a legitimate profit. It was also mentioned that some Cambios are in the money transfer business and that there is no level playing field vis à vis the banks. The Mission also discovered that there is no legal basis for fit and proper checks on the shareholding and management of subject companies in accordance with FATF Recommendation 29.
92. The Mission discovered that the Cambios also do not comply with the existing
LIF Act and that until now they did not report any Unusual Transactions. The absence of a regulator overseeing compliance with aforementioned acts in this area of Cambios is highly missed and is causing Suriname to be in default with FATF Recommendations 10 and 15, CFATF Recommendation 11, and
NCCT Criteria 1 and 5. Money Transfer Companies:
93. Money Transfer Companies do not need a license to operate in Suriname. Money Transfer Companies are included as reporting entities under the LIF and MOT Acts. There are indicators for Money Transfer Companies. However these are of little use at this point in time with the CBS neither any other supervisory authority performing AML examinations. The Mission was informed that it is the intention of the Surinamese authorities to draft legislation for the supervision of exchange offices and Money Transfer Companies.
94. According to the Surinamese authorities there are two Money Transfer Companies operating in Suriname. Unfortunately, the meeting with one of the Money Transfer Companies was cancelled. The reason given by the company in question for the cancellation was questionable.
95. The two Money Transfer Companies have reported quite a large number of Unusual Transactions according to the information received from the MOT. This indicates that this sector is on the one hand making an effort to comply with the Act on the Reporting of Unusual Transaction, but at the same time is highly vulnerable of being misused by money launderers. At present, this sector is not regulated and is also not subject to a strict AML-regime. There is also no legal basis for fit and proper tests on the shareholding and management of these companies (FATF Recommendation 29).
Stock exchange:
96. There is a regulation on Stock Exchanges (in effect as of January 1, 2004). However, this regulation does not contain KYC rules, screening procedures or regulations on the detection of suspicious transactions. There is also no Stock Exchange supervision ordinance in place in Suriname.
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97. The Stock Exchange members have internal regulations in place with respect to
the terms and procedures regarding the settlement of transactions. The number of stock exchange transactions is very limited, according to one of the representatives of the stock exchange. It should also be noted that Stock-Exchange brokers fall under the identification and Unusual Transaction Reporting system.
Casinos:
98. In accordance with Article 1 of the Gaming act 9(O.G. 1962 no. 114: “Landsverordening hazardspelen”) a license is required to conduct a casino business. The Taxes Department is charged with the control of the books of Casinos. This occurs however solely for tax purposes. There is no legal obligation to do screening of the founders and beneficial owners of casinos for the submission of a license to operate as a Casino. The conditions to Casino licenses seem not to contain provisions on screening of Ultimate Beneficial Owners (UBO’s) and integrity of management and personnel causing Suriname in this aspect not to comply with FATF Recommendation 29 and possibly meeting NCCT criteria 3 and 7 in the Casino sector.
99. The Mission was informed that there are approximately 9 licensed Casinos currently active on the Surinamese market. According to the information received, in most cases the conditions commonly imposed on Casinos were waived when issuing the licenses. The Mission was also informed that there are suspicions that money is being laundered through local Casinos through parent companies established abroad. A license to conduct a Casino business can only be granted to a hotel in accordance with the Gaming Act (Section 1). However, in practice the Surinamese Government itself has violated this legal provision by issuing Casino licenses to Non Hotels.
100. The Casino sector should be regulated and subject to strict AML-requirements in order to comply with FATF Recommendation 27 and not to meet NCCT Criteria
1 and 5 in view of the fact that Casinos are highly vulnerable for being misused by money launderers. The Minister of Justice informed the Mission that he has ordered the police to see to it that the Casinos comply with the licensing requirements and that he is determined to revoke the licenses of non-complying Casinos. The Minister of Justice also informed the Mission that he intends to bring this sector under the supervision of a Casino Gaming Board.
101. The Casinos do not comply with the LIF Act and as such are not compliant with FATF Recommendation 10. Also, the absence of unusual transactions reported so far by this sector warrants further investigation. The absence of a regulator overseeing compliance with the LIF and the MOT Acts is also highly missed in case of the Casino sector.
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Other Institutions / Professional Intermediaries:
102. Regretfully the planned meetings with the Lawyers Association and with the Notaries Association were cancelled. The latter without a proper explanation. Based upon the Unusual Transactions statistics received, it appears that not all lawyers and notaries are complying with the obligation to report Unusual Transactions.
103. The Tax Authorities and the Chamber of Commerce informed the Mission that the
legal entity called “Foundation” is (mis-) used on a large scale for commercial activities and for (improper) fiscal purposes. This can lead to obstacles to identification of beneficial owners and directors/officers of business entities leading to Suriname meeting NCCT Criteria 13.
104. Reasons given for the use of “Foundations” are that it takes a long time to establish a company (the President of Suriname grants the declaration of no objection which takes quite an amount of time). A “Foundation” is established by (the faster) deed of a notary. Again, unfortunately the Mission was not able to discuss this matter with the notaries. It is however recommended to use the “foundation” in accordance with its original legal purpose to avoid misuse.
105. The Board of the Chamber of Commerce informed the Mission that no record is
kept of the ultimate shareholders of corporations with nominal shares and of the beneficiaries of foundations. The Chamber of Commerce also informed the Mission that they have offered to maintain the registration of foundations, but that no final decision has been taken on this matter.
106. The Mission was informed during several interviews that the real estate business
in Suriname is also highly vulnerable to money laundering. The Mission was not able to discuss this topic due to the cancellation of the meeting with the notaries. It appears to the Mission that more information into this matter is warranted.
D. LAW ENFORCEMENT SECTION
The Civil Judicial Police:
107. The investigation of all crimes within Suriname falls under the responsibility of
the Civil Police (Korps Politie Suriname, KPS). Unlike the Military Police whose primary responsibility is for security control at all ports and immigration duties, any arrests made by them must be handed over to the Civil Judicial Police for further action. The Civil Police falls under the Ministry of Justice and Police while Military Police falls under the Ministry of Defense. The (Civil) Suriname Police Force consists of approximately 875 uniformed, 172 plain clothes policemen (Civil Judicial Police), and about 314 civilian workers and 100 police assistants.
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108. The Civil Judicial Police of Suriname consists of different entities under which the Crime Analysis Unit, the Technical Investigation and Recognizance Unit, a Fraud Unit, an Intelligence Unit and a Narcotics Intelligence Unit which is housed together with agents from the DEA residing in Suriname. The Civil Judicial Police also houses a Special Investigation Team that is specialized in the drug trade between Suriname and Holland and a Special Arrest Squad. The Civil Judicial Police also work in close cooperation with the Immigration and border police that fall under the Defense Force.
109. On the 5th of December 2003, the Civil Judicial Police of Suriname also
established a Financial Investigation Unit (financieel-onderzoeksteam: FOT). This unit has the task to investigate Suspicious Transactions Reports (STR’s) sent by the MOT to the Attorney General’s Office. This unit consists of 1 Police Inspector, 2 Financial Investigators and 2 Administrative Assistants. The Unit has since December 2003 until the visit of the Mission to Suriname received 3 cases for further financial investigation from the Attorney General’s Office. Two (2) cases are still under investigation while one case has been concluded with a 7-year conviction for Money Laundering.
110. The Civil Judicial Police seemed to be aware and well informed on the new AML
legislative framework of Suriname and indicated that these laws have been proving to give the Police the necessary legislative tools in order to combat organized crime and possible money laundering cases in Suriname. Suriname however still has no legislation on the use of special police tactics such as controlled delivery. However the police have been using this investigation method and are basing themselves on the Vienna Convention to which Suriname is also Party.
111. The Police also make use of semi- undercover operations mostly in the form of
informants that are being guided and controlled by Police officers. The Court of Suriname has accepted this and persons have been convicted based on this type of evidence. The Police, with permission of the Court, are also allowed to use telephone taps and intercept private mail in order to gather evidence.
112. The interviews with the Police during the Mission indicated that there is a high
level of awareness on the potential dangers of Money Laundering in Suriname. The Civil Judicial Police has appointed a liaison officer that is in continuous contact with the FIU of Suriname in order to exchange information and compare data on possible suspects. “Matching” is being done by using codes, which indicates possible suspects. Only if there is a “hit” is the information passed to the FIU, which continues making analysis on a possible Money Laundering case.
113. The Police of Suriname has serious constraints in its overall budget and during the
visit of the Mission it was indicated that the financial resources for the normal budget year 2004 were already depleted and that it will encounter financial problems during December 2004 (may cause Suriname to meet NCCT Criterion
27
23). The Police in Suriname are however receiving some financial and technical aid from Holland, the United States and France, which makes it possible to run the Service on an acceptable level.
114. The Financial Investigation Unit (FOT) of the Civil Judicial Police seems to be
relatively well equipped for now in order to deal with the amount of cases that is being sent to them by the Attorney General’s Office. However, the impression of the Mission is that the MOT is only receiving and sending through to the Attorney General’s Office a small fraction of possible STR’s that can be generated from the Surinamese financial sector. The MOT has also yet to go through enormous amounts of Unusual Transaction Reports that was sent to this entity in the past in order to filter out through analysis if there are Suspicious Transaction Reports yet to be sent to the Attorney General’s Office. It can be foreseen that if the FIU is supplied with the necessary human and technical resources this will probably generate an amount that will require the “FOT” to be expanded.
115. The financial investigators of the Financial Investigation Unit seem to be
experienced detectives from the Detectives Department from the Civil Police of Suriname. Basic training in the investigation of Money Laundering provided by Caribbean Anti-Money Laundering Programme (CALP) was received in 2003 and training in this area has also been received from CIFAD. However, continuous training is still felt to be necessary in the area of money laundering and terrorist financing. The Mission was informed that a project that was being financed by the Netherlands, was formulated in order to help fight organized financial crime in Suriname. The first phase of this project concentrated on the establishing of the Financial Intelligence Unit and the Financial Investigations Unit. The second phase of this project will now concentrate on training of hired personnel and the installation of electronic networks.
116. The Head of the Financial Investigations Unit together with representatives of the
FIU and the Attorney General’s Office visited investigation and prosecution units in Holland in June 2004 and over a period of time in order to gather insights in the functioning of these units and the processing of money laundering investigations. The CALP financed this work visit.
117. The Civil Police in Suriname has a pro-active approach in possible cases of
corruption within the Police. The Mission has been informed that corruption cases are thoroughly being investigated and measures are being taken against police personnel that are involved in cases of corruption. Police officers or other civilians that work within the police organization in Suriname that are arrested in Holland in drugs cases, are also being arrested and processed in Suriname once they return. This approach should avoid Suriname meeting NCCT Criterion 24 with regard to the police
The Defense Force (Military Police-Air Forces-Naval):
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118. The Military Police, Air Force and Naval fall under the responsibility of the Ministry of Defense. All three Military entities act in support of the Civil Police especially in conducting Drug Operations. The Military Police is by the Constitution of Suriname in charge of border control and immigration and its primary responsibility is to conduct security control at all ports and immigration. A directive of the Attorney General’s Office gives the authority to the Military Police to detain and process persons that tresspass border regulations and immigration laws. The Military Police can also detain and process military personnel that commit any form of crime.
119. The Military Police, although they receive training with respect to searches and
methodologies in recent Drug Trafficking trends, also require additional tools to detect drugs such as x-ray machines and canine units at their international airport. There is also no training and expertise in financial investigation available within the Military Police (NCCT Criterion 23).
120. The Navy’s strength is approximately 190 personnel. The primary responsibilities
of the Navy are for search and rescue, conducting border patrols for environmental issues, piracy and illegal activities such as Drug Trafficking. Even though the Navy is equipped with 9 boats, none are go-fast boats equipped to set chase at any suspicious vessel within their Territorial Water. The Navy has also appointed special officers who have the powers of arrest only in their territorial waters but not on land where the Civil Police would then take over.
121. The Suriname Government has signed a Ship Riders Agreement with the US
Government. The Suriname Government is now also in the process for establishing working relationships with the Venezuelan and the Netherlands Antillean and Aruban Coast Guard and is participating in the consultation meeting to establish a Regional Maritime Law Enforcement agreement with the nations of the wider Caribbean.
Customs:
122. The Customs Department falls directly under the Ministry of Finance and consists approximately of 290 personnel. The Customs Department is the entity that controls the importation, exportation and transshipment of goods in Suriname. The regulation of the import and export of cash is not specifically covered by any law besides the Foreign Exchange Act (O.G. 1947 no. 136) according to Surinamese officials. According to this Act is the traveler that wants to leave Suriname with US $ 10.000 or above, obliged to acquire a license from the Foreign Currency Committee.
123. The Identification Card for travelers coming into Suriname does not indicate that the traveler has to declare to Immigration or Customs authorities if he is carrying a considerable amount of money with him or her into Suriname. It follows that there is no adequate controls at the borders of Suriname with regard to sums of
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money that might come in or out of the Country (CFATF Recommendation 12
and FATF Recommendation 22). It also follows that there is no structured working relationship between Customs and the FIU of Suriname (NCCT
Criterion 15). The Customs does not inform or report the FIU of amounts of money trying to leave or entering the Country.
124. The Customs Department assist the Police in planned drug operations, however
their Department does not have a specialized enforcement unit targeting money laundering and contraband such as drugs, stolen vehicles etc. Customs participate with Police in tasks forces, such as the “Task Force Zanderij” at the airport of Suriname with the primary object of disrupting drug trafficking by air passengers. The Customs Department seems to be receiving very few resources (NCCT
criteria 23) and almost no formal training, despite its active role in drug interdiction. The Customs Department, for example, does not own vessels and is in a difficult position to check yachts and boats, including their privately owned moorings on riversides and seashores.
125. Customs are indicated to have serious problems with corrupt members in the organization (NCCT Criterion 24). The Minister of Finance has initiated an integrity project. A private consultancy agency has been hired to oversee and improve Customs procedures at the borders of Suriname. Authorities have said during interviews that this might improve revenues for the Government out of Customs operations by 50 percent. The Government of Suriname is also planning on setting up a Financial Intelligence and Investigation Service (FIOD) that will also have to deal with corruption cases within the Customs and with tax evasion and fraud investigations of local and international companies.
Office of Public Prosecution:
126. The Attorney General’s Office is responsible for issuing charges against persons and the presenting of cases to the Court in Suriname. The Attorney General’s Office consists of a staff of 17 Attorneys at Law including the Attorney General with his deputies. The Attorney General’s Office is divided in desks with different areas of specialization such as: -Drugs and related crime desk -Money laundering desk -Trafficking in persons desk -Economic crime desk -Organized crime desk -Youth and vice desk -House violence desk
127. The Suriname FIU fall under the Attorney General of Suriname according to
Sections 3 and 11 of the Act on Reporting of Unusual Transactions. The FIU has to present its yearly activity plans to the Attorney General and the FIU also has to bring out quarterly reports of its general functioning to the Attorney General with
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copies to the Minister of Justice and the Minister of Finance. The FIU sends to the Attorney General’s Office for further investigation “Unusual Activity Reports” that through processing and analysis has become a “Suspicious Activity Report”. Between the 1st of December 2003 and the visit of the Mission four (4) cases have been sent by the FIU to the Attorney General’s Office for further investigation.
128. The Attorney General’s Office seems to have sufficient human resource capacity
to deal with prosecution of possible money laundering cases. However, the Mission has been informed during interviews with representatives of the police, the Attorney General’s Office but also the Judiciary themselves that the functioning of the Court is being hampered by a severe lack of Judges on the benches which again may cause Suriname to meet NCCT Criterion 23. This also reflects on the functioning of the work of the Attorney General’s Office. The Attorney General’s Office is forced to terminate less serious cases without bringing them in front of the Court (“sepot”) in order to ease the pressure on the Court. The Attorney General’s Office, in order to find a solution to this, has proposed that the Government of Suriname introduce the authority for the Attorney General’s Office to deal with cases by imposing a fine and the introduction of fast track courts for small cases of drugs couriers, the so called “body carriers” or “swallowers”. The Mission could not ascertain whether the Government of Suriname was working on these proposals and in what stage of completion they were.
129. Prosecutors from the Attorney General’s Office, have participated in symposia
from the CALP for Supervisors of Financial Investigation Units and have also participated in visits to Holland to have insights in the prosecution of money laundering cases. The Mission detects however the need to supply more and continuous specialized training to more prosecutors in the Attorney General’s Office that may put the Attorney General’s Office in a better position to deal with an increase in possible cases concerning money laundering in the future.
130. The Attorney General is the Central Authority in cases of Mutual Legal
Assistance. The Surinamese Criminal Code is the basis on which Suriname assist with international request for legal assistance. The Vienna Convention that was ratified in 1992 by Suriname can also be applied in cases which are drugs related. The Attorney General’s Office is indicating a rapid growth in the amount of requests for Mutual Legal Assistance and indicates that despite the relatively reasonable human resource capacity at the Attorney General’s Office, there are some constraints in timely dealing with all the requests that may cause Suriname
not to be in Compliance with FATF Recommendation 38 and meet NCCT 21.
Most of the requests are being submitted by Holland. There are also ongoing discussions with the Governments of Venezuela and Brazil on the signing of Mutual Legal Assistance Treaties.
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Year Received MLAT requests Total Issued MLAT requests
Total
2003 Netherlands 101 Switzerland 03 France (Guadeloupe) 01
105 America 01 Portugal 01 Colombia 01 Netherlands 01
04
2004 Belgium 03 America 01 Netherlands Antilles (Curacao) 01 Cuba 01 Brazil 01 Netherlands 117
124 Portugal 01 St. Marten 01 Netherlands 15
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131. All international requests for legal assistance for 2003 have been responded to
and most of the requests for 2004 have also been dealt with despite the existing constraints according to the Attorney General. Two cases of extradition to France and the US have been also promptly dealt with according to the information received at the Attorney General’s Office. The Attorney General’s Office is also coordinating and supervising the different forms of cooperation between judicial entities in charge of combating organized and other forms of crime in Suriname and internationally when Suriname is cooperating with international judicial authorities. Suriname has no Asset-Sharing Treaties with any Country. A case of asset sharing with the US was pending during the visit of the Mission and could not yet be adequately dealt with in the absence of an Asset Sharing Treaty with the US (See FATF Recommendations 38 and 39).
132. There is the possibility of forfeiture of income out of crime and according to the authorities in Suriname there exists an agreement on the repartition on the income of the selling of confiscated goods. However, there is no structured fund to place confiscated money and money generated out of the disposal of confiscated goods related to money laundering or other organized crime in order to use them for judicial purposes (CFATF Recommendation 9).
The Courts in Suriname:
133. The Courts in Suriname consists of two instances. The Court in the first instance
(“kantongerecht”) and the Court of Appeal (Gerechtshof). Suriname also forms part of the CARICOM and has signed to be a member of the Caribbean Court of Justice (CCJ) but has only signed the protocol for Constitutional cases pertaining to CARICOM regulations. It has not yet signed the Protocol for other types of
32
cases to be dealt with in appeal by the CCJ and is planning to do this later after having the reassurance that civil law cases would be adequately covered by this regional Court.
134. As stated above, the Court in Suriname is being hampered in its functioning by a
severe lack of Judges on the benches. The Court should consist of 15 Judges but at the time of the visit of the Mission it only consisted of 7 Members. This lack of Judges is preventing a normal and fluent course of action in the area of investigation, prosecution and conviction of all possible crimes in Suriname and, despite the available successful conviction in a money laundering case, gives the Mission great reasons for concern. This lack of Judges is also putting pressure on the Police and the Attorney General’s Office with regard to what cases will be filtered to the Courts and if these cases will be dealt with in an effective manner. This lack of Judges might constitute Suriname to meet NCCT criterion no: 23
concerning lack of resources for administrative and judicial authorities.
135. The Mission also discovered during its visit the remarkable situation that the current President of the Courts has been interim president for the past 6 years. This has been creating an unhealthy and unstable situation within the Courts of Justice and has been the reason for lots of speculation not only within the Surinamese community but also within the Mission as to why the Government of Suriname was still pending to officially nominate the President of the Court.
136. The Court considers the legislation on money laundering available in Suriname at
this point in time sufficient to be able to convict money launderers. This has been proven in the “Rupping Vernon Case” where the Court in exceptional form has convicted a money launderer with a higher punishment than requested by the Attorney General’s Office. However, the Court has also concluded that the new legislation is asking Judges to be more involved in the interpretation of available evidence during court sessions. The evidence now has to be analyzed and constructed with professionals from the police and FIU when the cases are presented in Court.
137. Up to now two (2) Judges have participated in courses for magistrates offered by
the CALP and the mission was informed that more and continuous training in the conviction of money laundering cases was necessary for the Judiciary. The Court was also of the opinion that there needs to be more public awareness campaigns on the phenomenon of money laundering and the new legislation against this form of crime.
Law Enforcement Cooperation and Coordination:
138. As mentioned before, Suriname is party to the 1961 UN Single Convention on Narcotic Drugs and the 1971 UN Convention on Psychotropic Substances. Suriname also entered into a six-part bilateral Maritime Counter Narcotics Enforcement Agreement with the US in August of 1999. The US-Netherlands
33
Extradition Treaty of 1904 is still applicable to Suriname. There are also separate bilateral Extradition Treaties with Holland, Venezuela, Brazil and France. An Agreement on the Exchange of Intelligence has also been concluded with the Interpol in 1998 and in the preceding year with Guyana. There is also an Agreement on the Exchange of Intelligence with French authorities and a Letter of Intent in this respect exists between Suriname and the Netherlands Antilles. Domestic legislation also provide for the exchange of information within the region.
139. Suriname has established the following Task Forces and commissions in order to cope with the problems of (organized) crime:
140. The National Anti Drug Council (NAR) can be seen as a policy mechanism for coordination of action against illegal drugs and the execution of the drug master plan, which resorts under the Ministry of Health. The Council was established in 1998 for a two-year mandate but this mandate has been extended time and time again and was last extended in 2004 for a 2-year period. The NAR is the main contact point for the Mutual Evaluation Mechanism (MEM) of the OAS-CICAD.
141. Task Force Zanderij: This Task Force is located at the airport of Suriname: Zanderij, and its primary task is to prevent the import and export of illegal drugs. The Task Force comprises of representatives from the Civil Police, the Military Police, Customs, Airport Authorities and the Security of the Suriname Airways (SLM). It is being coordinated by the Attorney General’s Office and discussions are ongoing to provide the Task Force with a permanent Public Prosecutor at the airport site.
142. National Coordination Centre of Suriname (NCCS): This Centre was established as result of the Barbados Plan of Action and is functioning as the Suriname Joint Agency Task Force. The Civil Police, Military Police, Naval and Air Forces, and the Customs are represented in this joint interagency center, which was also being coordinated by the Attorney General’s Office. The Mission could not measure the level of activity of this Centre during its visit to Suriname.
143. Commission against Trafficking in Persons: This Commission, which is a policy body was established in 2003 and has the task to advise the Government of Suriname on measures to prevent illegal trafficking in persons.
144. Steering Group in conjunction with Holland: A Steering Group was formed in 2004 with the Government of The Netherlands for the advancement of operational law enforcement actions between the two Countries and the strengthening of Judicial services in Suriname. This Steering Group has formulated projects in order to strengthen the Customs, Immigration and Police of Suriname.
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E. CONCLUSIONS
145. It can be concluded that the Government of Suriname since the First Round Mutual Evaluation visit to Suriname has been active in constructing a sounder AML infrastructure to deal with possible problems of Money Laundering within Suriname. In addition to establishing an FIU, the legislative infrastructure has been enhanced and tested with one case leading to conviction of a money launderer. The supervision on compliance with the international benchmarks of the private financial sector in Suriname at this point in time however is nearly absent and diligently has to be improved in order for Suriname’s AML infrastructure to be really functional.
146. The impression of the Mission is that there is growing awareness in the core
financial businesses of Suriname, however a sense of urgency within parts of this sector (Cambios, Casinos and even the Notaries as Designated Non Financial Businesses and Professions judging from the importance that was given to a meeting with the CFATF Mission) for application of AML measures is lacking. This might be caused by a still weak supervision of this sector by the Supervisory Authorities and also a MOT (FIU) that is not yet able to cope with all the submitted UTR’s and other tasks in the AML area assigned to it.
F. RECOMMENDATIONS
1. The Surinamese Authorities are recommended to enact and implement without
any further delay the current Draft Banking Supervision Act which will give the CBS a solid legal basis to maintain the integrity of this sector and to expand its supervisory scope into the prevention and combating of money laundering via this sector by issuing the new detailed AML Guidelines and conducting targeted AML on-site examinations.
2. The Suriname Authorities are recommended to adjust the MOT and LIF Acts and
incorporate a control mechanism in them as to make them more enforceable. The CBS could (should) be explicitly appointed as the institution that supervises the compliance of the MOT and LIF Acts by the financial institutions. With regard to the non-financial institutions service providers a special Supervision / Enforcement Unit could be incorporated in the FIU with the task to observe compliance of the MOT and the LIF Acts by these institutions. This unit should observe the introduction of regulations and guidelines on amongst others, training of staff of these various institutions on various compliance related issues.
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3. There is no Supervisory Authority that can supervise the compliance of the MOT and LIF Acts by Casinos in Suriname. The Suriname Authorities are recommended to establish the Gaming Control Board, which should be charged with the supervision of Casinos. It is also recommended to amend the Gaming Act in order to include screening procedures (ongoing) of management of Casino businesses (NCCT Criteria 3 and 7).
4. For the sake of adequate supervision for the relevant sectors it is recommended
that separate Acts on the Supervision of Insurance Companies and Pension Funds be introduced as soon as possible.
5. The Surinamese Authorities are also recommended to bring the Cambios and
Money Transfer Companies under effective supervision of the CBS. The Dutch Act on the supervision of Money Transaction Companies could be used as a model.
6. The actual Banking Supervision Act has no specific legal provision stating the
conditions for the withdrawal of a declaration of no objection. There is no specific provision stating that managing and supervisory directors must be approved by CBS before being appointed as such. The selling or exchange of shares in a credit institution is not subject to any approval of the CBS. This should be amended by introducing the Draft Bill on Banking Supervision (see recommendation 1.)
7. Not all financial institutions interviewed by the Mission had detailed Anti-Money
Laundering Manuals and Codes of Conduct in place. In view of the threats banks face to be used by money launderers, banks in Suriname should be required to follow a more pro-active approach in detecting and deterring money laundering and also be required to conduct additional due diligence before entering into client-relationships with companies operating in sectors highly vulnerable for money laundering (e.g. Casinos, Cambios, and second-hand car dealers).
8. The Suriname Authorities are recommended to appoint the President of the Court
of Justice diligently in order to avoid uncertainties in this very important institute that forms a chain with the rest of the law enforcement community in Suriname in the fight against ML/FT (NCCT criterion 23).
9. Article 9 of the MOT Act states that the exchange of information with other FIU’s
is only possible based on a formal Treaty. Article 9 should also include the possibility of exchange of information of the Suriname FIU via a MOU in order to be able to fully comply with FATF 32, not meet NCTT 15 and, continue to avoid meeting NCCT criteria 17.
10. The possibility of exchange of information between customs and the prosecutor’s
office is recommended. A regulatory provision that allows this and also the exchange of information between MOT and other relevant government offices (g.e.: Customs, Tax office) is recommended.
36
11. It is recommended for Suriname to allocate additional staff and resources
(adequate remuneration) to the MOT. It is also recommended for the MOT (in consultation with the CBS insofar it concerns the financial sector) to have regular information sessions with all entities and intermediaries that fall under the scope of the MOT and the LIF Acts.
12. It is also recommended that Suriname observe entering into Asset Sharing
Agreements with (various) Countries in order to expand its international cooperating possibilities, which would also financially benefit Suriname.
13. It is recommendable to include reporting of transactions linked to possible
Terrorist financing in the MOT Act. It is also recommendable to organize the non-financial service providers into a professional organization, which will benefit the supervision and enforcement of the AML/CFT standards included in the MOT Act.
14. It is recommendable that a Committee is installed with enough legal authority to
assist, advice and evaluate the progress of the activities of the MOT. In this Committee representatives of both the public sector (governmental departments charged directly with money laundering and terrorist financing affairs) and the private sector (representatives of the financial institutions and the non financial service providers) could be appointed. Evaluation from time to time of the existing indicators for filing of Unusual Activity Reports in order to evaluate their effectiveness can be one of the important tasks of this committee.
15. The LIF and the MOT Act have only penal sanctions in case their provisions are
violated. These Acts do not have any administrative (e.g. fines) or civil sanctions, which are in practice more easily enforceable and in practice more effective. It is recommended to incorporate administrative sanctions in the LIF and MOT Acts.
16. The Foreign Exchange Act is quite outdated. It could help the Surinamese
Authorities in the control and supervision of the financial market if it is updated.
17. It is strongly recommended to use the “Foundation” only in accordance with its original legal purpose to avoid misuse of this legal entity in order to do (financial) businesses which can not be sufficiently supervised by the Government of Suriname. A recommendation to help remedy this situation may be for the Suriname Government to require that information on the ultimate beneficial owner(s) of companies and foundations are recorded.
18. It is recommended to expand the staff of the FOT (Financial Investigation Team)
within the Civil Judicial Police of Suriname in the near future when (if) the MOT staff is expanded and more investigations resulting out of UTR’s are bound to be filtered to the FOT.
37
19. The FOT, and also other entities in the Law Enforcement Chain, including the Judiciary, in Suriname, are in need of more and constant training in the area of analysis, investigation, prosecution, presentation and conviction of Money Laundering (and Combating of Financing of Terrorism) cases.
20. It is recommended to amend the Immigration/Identification Card when entering
(leaving) Suriname in order to require passengers to fill in the amount of money above a certain limit, or other payable instruments they carry with them.
21. Customs are in need of resources for more and better border control. Customs is
also in need of more training in the area of AML-CFT while the process of addressing corruption within this organization should be continued vigorously.
22. Suriname is recommended to introduce the possibility for the Attorney General’s
Office to deal with cases on bail and the introduction of fast track Courts for small cases like drugs couriers in order to address the current backlog on cases to be dealt with by the Courts in Suriname.
23. The Suriname Authorities are recommended to establish a Seized Assets Fund
that can be used to finance Law Enforcement activities from assets seized from money launderers.
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Grading2
Annex 1. Compliance with the FATF 40
The FATF 40 Recommendations
C PC
NC N/A
1 – Ratification and implementation of the Vienna Convention x
2 – Secrecy laws consistent with the 40 Recommendations x
3 – Multilateral cooperation and mutual legal assistance in AML x
4 – Money laundering a criminal offence x
5 – Knowledge of money laundering a criminal offence x
6 – Criminal liability of corporations—and their employees x
7 – Legal and administrative conditions for confiscation x
8 – Recs. 10-29 apply to non-bank financial institutions x
9 – Recommendations 10-21&23 apply to financial services x
10 – Prohibition of anonymous accounts X∗∗∗∗
11 – Obligation of reasonable measures for customer identification x
12 – Comprehensive record keeping (5 years) for transactions x
13 – Attention paid to AML risk from new technologies N/A*
14 – Detection and analysis of unusual or large transactions x
15 – Reporting requirement for suspicious transactions X
16 – Legal protection when reporting to competent authority x
17 – No tipping off customers of reports to competent authority x
18 – Compliance with instructions regarding suspicious transactions X
19 – Internal policies, controls, audit, and training programs X
20 – AML rules and procedures apply to branches and subs abroad x
21 – Special attention given to problem countries x
22 – Detection and screening of cross-border transportation of cash x
23 – Centralization of data on currency transactions x
24 – Support to the replacement of cash transfers x 25 – Prevention of unlawful use of shell corporations x 26 – Adequate AML programs in supervised financial institutions x
27 – Administrative regulation of professionals dealing with cash x
28 – Guidelines for suspicious transactions detection x
29 – Preventing control of financial institutions by criminals X
30 – Recording of international flows of cash x
31 – Information gathering and dissemination about AML x
32 – International exchange of information relating to suspicious transactions, and to persons or corporations involved
x
33 – Bilateral or multilateral agreement on information exchange when legal standards are different
x
34 – Bilateral and multilateral agreements for MLA x
35 – Ratification and implementation of other international conventions on money laundering
x
36 – Cooperative investigations among countries' authorities x
37 – Definition of procedures for MLA in criminal matters x
38 – Authority to take prompt action in response to foreign requests X
39 – Mechanisms to avoid conflicts of jurisdiction x
40 – Money laundering an extraditable offence x
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Explanatory Notes:
Rec. 10: The Mission was informed that in practice banks do not have anonymous accounts in their administration. The Suriname legislation however does not forbid anonymous accounts. Cambios and Casinos also do not comply with existing LIF Act.
Rec. 13: Training and awareness building in this area is still limited however the
area itself is still very limited and this matter is not of high relevance for Suriname at this point in time.
Rec. 14: The AML-programs – insofar existent – should be strengthened. Also,
there is no regulatory oversight in this area. Rec. 15: Compliance with the AML-laws is below par. Also there is no
regulatory oversight. Rec. 18: Compliance with the AML-laws is below par. Also there is no
regulatory oversight. Rec. 19: The AML-programs, insofar existent, need to be strengthened. Rec. 21: Not all institutions are aware of the existence of the NCCT-list. Rec. 22: No obligation to report on the monies brought in when entering Suriname. Rec. 26: Reference is made to the notes to Rec. 14, 18 and 19. Rec. 27: Cambios and Money Transfer Companies are not regulated. Also, there is
no supervisory oversight in the area of compliance with AML-laws. Rec. 28: No (comprehensive) AML-Guidelines are currently in effect for the
financial sector under supervision of the CBS. Rec. 29: The current supervisory law for the sectors falling under supervision of the
CBS is obsolete. It does not give the CBS any formal powers to conduct fit and proper tests on prospective shareholders or changes therein. However, some work is done in the area of screening potential shareholders and directors of supervised financial institutions.
Rec. 31: The MOT (and CBS) should play a pro-active role in disseminating
information about (international and local) money laundering practices. Rec. 32: Information can only be exchanged on the basis of a Treaty. Rec. 36: No legal or actual cooperation between CBS, MOT and Taxes
Department. Rec.38: There is need for (more) asset sharing arrangements with other Countries.
40
Annex 2. Compliance with the CFATF 19 Recommendations
Grading
The CFATF 19 Recommendations C P
C
N
C
N/A
1. Establishment of an AML Authority x
2. Money laundering offence definition not restrictive as regards predicate offences
x
3. Criminalization of conspiracy to engage in, and aiding and abetting drug trafficking, money laundering and other serious offences
x
4. Full scope crimininalization of money laundering x
5. Criminalization of engaging in transactions while knowing that funds are the proceeds of serious crimes.
x
6. Professional confidentiality duty not a defence for attorneys, accountants and other "gatekeepers"
x
7. Confiscation at the request of foreign authorities is allowed x
8. Property based and valued based confiscation allowed x
9. Seized asset fund for anti-drug and AML efforts x
10. Confiscation applies to drugs, precursors, equipment and materials
x
11. Adequate supervision and regulation of the whole financial sector
x
12. Border procedures for inspection of merchandise and carriers
x
13. Sanctions for not maintaining records for the required retention period
x
14. Compulsory reporting of large cash transactions x
15. Information on international currency flows shared internationally
x
16. Signing and ratifying OAS Convention on Extradition X
17. Anti-drug and AML measures are effective and consistent regional efforts
x
18. Regular meetings with counterparts in the region to discuss ML and emerging trends and techniques
x
19. Technical assistance programme for countries with small economies and limited resources
x
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Explanatory Notes:
Rec. 11: The CBS does not conduct any regulatory oversight in the area of AML. Also, it should be noted that not all segments within the financial sector or sectors vulnerable for money laundering are regulated (e.g. Cambios, Money Transfer Companies, Stock Exchange, Casinos) and as such subject to a strict AML-regime.
Rec.16: Website of the OAS reveals that Suriname has not signed the OAS Inter-American Convention on Extradition.
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Annex 3. Compliance with the FATF NCCT 25 point Criteria
The FATF 25 NCCT criteria
Criterion Met Part.
Met
Not met Remarks
1. Ineffective regulation and supervision of financial institutions
x CBS does not conduct any regulatory oversight in the area of AML.
2. Inadequate licensing rules for financial institutions
x The current supervisory act is obsolete and does not provide CBS with adequate tools to safeguard the integrity of the institutions under its supervision.
3. Lack of measures to guard against control of financial institutions by criminals
x Refer to remarks under criteria 2.
4. Existence of anonymous accounts x
5. Ineffective KYC rules X Not all entities comply with the KYC-rules established by law or are subject to AML-supervision.
6. Inadequate record keeping requirements x
7. Obstacles to accessing information on clients or beneficial owners of legal entities
x No information on ultimate beneficial owner(s) required/ available at the Chamber of Commerce.
8. Secrecy provisions prevent access to information to administrative authorities
x
9. Secrecy provisions prevent access to information to judicial authorities
x
10. Inefficient mandatory suspicious transaction reporting system
x The indicators could however be made less broad to improve the efficiency of the reporting system.
11. Inexistence of sanctions for failure to report suspicious transactions
x
12. Inadequate requirements for registration of business entities
X No information on ultimate beneficial owner(s) required/ available at the Chamber of Commerce.
13. Obstacles to identification of beneficial owners and directors/officers of business entities
X Refer to remarks under criteria 7 and 12.
14. Identification requirements allow transactions without comprehensive KYC
x
15. Obstacles to international cooperation between administrative authorities due to unduly restrictive conditions.
x Treaty is needed for FIU to be able to exchange information with foreign counterparts (see Crit.18)
16. Exclusion of enquiries on behalf of foreign counterparts
X However, Treaty is needed for FIU to be able to exchange information with foreign counterparts (see Crit.18)
17. Unwillingness to respond to international requests for cooperation
x
18. Restrictive practices in international cooperation between AML supervisory
X
FIU information can only be exchanged on the basis of a treaty
43
authorities/FIUs (MOT Act section 9).
19. Money laundering proceeds from serious crimes not criminalized
x
20. Prohibition of exchange of information between judicial authorities
X
21. Unwillingness to respond to MLA request
x
22. Refusal to provide judicial cooperation x
23. Lack of resources for administrative and judicial authorities
x There is a lack of human and monetary resources.
24. Incompetence and/or corruption of government staff
X Corruption of Customs staff is indicated as problem.
25. Inexistence of FIU x
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Annex 4
Interview Program
Mutual Evaluation of Suriname
29th
November – 3rd
December 2004
November 29th
, 2004
Minister of Justice and Police
08.00 – 08.45
Office of Attorney General 09.00 – 09.45 Mr. B. Panday (Acting Attorney General)
Minister of Finance 10.00 – 10.45
President Central Bank Suriname
11.00 – 11.45 Mr. A. Telting (President) Mr. O. Ezechiëls (Ex. Director) Mr. G. Gersie (Ex. Director) Mrs. A. Limon-Sof (Head Legal Dep.) Ms. G. Amelo (Legal Dep.) Ms. L. C. Nyran (Policy Dep.)
Office of Public Prosecution / Office Legal Affairs
13.30 – 15.00 Mr. B. Panday (Act. DPP) Mrs. Chin A Fat (Head Legal Depart.) Mrs. M. Rommy (Legal Department) Mrs. G. Paragsingh (Prosecutor ML)
November 30th
, 2004
Act. President Court of Just. 08.00 – 09.00
Comptroller (Tax / Customs)
09.15 – 10.15 Mr. R. May (Director of Taxes)
Director Supervision Dep. Central Bank Suriname
10.30 – 12.00 Mrs. G. Ingeborg (Coord. Supervision) Mr. H. Chandler (Head Sect. Banks) Ms. P. Pocorni (Head Sect. Insurance) Ms. J. Trijmersum (Legal Assistant) Ms. A. Choennie (Head Sect. Savings) Ms. G. Amelo (Legal department)
Association of Banks 13.30 – 15.00 Mr. A. Harmsma (RBTT) Drs. J. Bousaid (HakrinBank NV) Mrs. D. Levens-Hindori (LandbouwB.) Mr. Dh. Kalloe (Sur. Post SpaarB)
December 1st, 2004
Head Civil Judicial Police 08.00 – 10.00 Mr. Ch. Santokhi (Head Judicial Police) Mr. Grant Alwin R. (Head FOT)
45
Mr. Ruben Dijks (Head Narcotics Int.) Mr. I. Wekker (Head Customs Invest.) Mr. A. Debisarun (Military Police) Mr. R. Wijnaldum (Head Sp.Branches) Mr. R. Doeme (Fraud/Ec. Coord. FOT) Mr. J. Arduin (Head Narcotics Dep.)
MOT 10.15 – 12.15 Mr. A. R. Bhagwandas (Director)
Western Un./ Grobohama 13.30 – 14.30
Cambio’s 15.00 – 16.00 Mr. Bhailal (Exces NV) Mr. W. Stanford (Imese NV) Mr. Ishaak (CME) Mr. R. Jagesar (CME)
December 2nd
, 2004
De Surinaamsche Bank NV 08.00 – 09.00 Drs. S. Proeve (Vice President) Mrs. H. Cederboom (Vice President) Mr. A Karg (Dep. Manager) Mrs. U. Tin Joen-Gomes (Dep. Manag.) Mr. A. Oostburg (Dep. Manager) Mr. P. Bhagwandin (Compliance Off.)
FATUM Life Insurance 09.30 – 10.30 Mr. C. Karwofodi (Policy Information)
Hakrin Bank NV 11.00 – 12.00 Drs. J. Bousaid (CEO) Mr. G. Raghoenathsingh (Assistant Dir)
Assuria Life Insurance /Stock Exchange
13.30 – 14.30 Mr. D. Wesenhagen (Director)
Chamber of Commerce 15.00 – 16.00 Mrs. R. Ramdat-Thakoer (Secretary) Mr. M. Man A Hing (Board Member)
December 3rd
, 2004
RBTT 08.00 – 09.00
Association of Lawyers 09.30 – 10.00 No Representation
Association of Notaries 10.15 – 10.45 No Representation
GODO Credit Cooperation 11.15 – 12.15 Mrs. Eijk- Felicia Ms. K. Wijdenbosch (Ass. Manager)
NAR (Anti Drugs Council) 12.45 – 13.45 Mr. R. Panday (DPP)
Minister of Police and Justice (informal)
18.00 – 20.00
46
Annex 5:
Authorities’ response to the assessment:
Madam Chair, It is our observation that the examiners has done everything possible to make more than a quick scan of all the relevant areas related to the business of our organization and above all presented a report which is in the interest of Suriname. With regard to some paragraphs we are of the opinion that some more information should be added in order get a total view of the related aspects. Especially in three paragraphs we would like to add the following information. In paragraph 44 the exchange of FIU information based on a treaty is for those cases in which the requested information will be used for investigative or prosecutorial and trial purposes. Sharing of FIU information for intelligence purpose is possible through a memorandum of understanding. In this light the MOT institutions of Suriname and Holland in July 2004 signed a MOU on which basis information was and is shared. In one case that information led to an investigation and further information was then obtained through a request based on the mutual legal assistance treaty between the two countries. In paragraph 47 the role of the Central Bank is more that what is stated, because the MOT act in article 13 stipulates that institution supervising the financial sector do have the obligation to report to the MOT all cases of money laundering and suspicious transactions and based on the Bank Act, the Central Bank is the supervisory authority for banks, credit unions and other financial service providers. Therefore it is possible under the existing legislation for the CBS to report to the MOT if necessary. To paragraph 49 we would like to add, that the 1996 guidelines of the Central Bank were issued in accordance with the Bank Act [as stated in par.55] and includes the provision of having a compliance officer in those financial businesses supervised by the bank. Regarding all the other areas the report is very accurate and precisely highlights the gaps in the system. Detailed Reaction Suriname Authorities
Regarding the gaming business In the area of supervision of those branches that have the obligation to report suspicious transactions further steps were undertaken. In December 2004 an interdepartmental taskforce was established by the Minister of Justice and Police to advice him about the establishment of a gaming board. The Justice and Police Minister now in office since September 1st 2005, will present to the Council of Ministers a proposal of measures to regulate, control and supervise the casino branch. Regarding the non-financial sector. The car dealer sector is not well organized as yet, but MOT does have a planning for a solid approached towards this branch and other non financial service providers. One of the first steps that will be undertaken is to organize them. For this branch and others who
47
have the obligation to report unusual transactions, the Justice Minister already indicate, that additional regulation have to be drafted to make it possible for the Minister of Trade and Industry to withdraw the permit given to the dealer when violating the MOT legislation. Regarding the two groups of professionals namely the Notary Public and the Lawyers who are both well organized, additional legislation will be drafted to include the area of supervision. The existing legislation already has a paragraph regarding supervision coming from the High Court and the Attorney General for these free professions. Regarding the High Court As it is elsewhere is the world and also in the Caribbean, the status and position of the Court, especially the High Court, it protected by the Constitution. The appointment of a High Court President is an ultimate matter of the Executive and the Court. The information that I can give at this stage is that steps have been taken to solve this matter. The Justice Minister gave priority to bring more judges into the judicial system. I can inform members, that two more judges were appointed in the passed three months. Two years ago ten persons were selected to participate in a five years training course to become judge. The training will come to an end in approximately three years from now and for those who successfully complete this course the process for appointment as a judge can than be started. International cooperation. There is a high level international cooperation in the area of Justice and Police with several Countries [e.g. Holland, USA, Brazil, France] and when necessary, bilateral we than reach to an agreement regarding the sharing of assets. Regarding international cooperation I may inform plenary that upon request from Suriname, the USA agency FinCen made an offer to assist MOT in all the areas in which improvement is needed so that an application for Egmont membership can be filed and we than can obtain membership of the organization. An experienced person from FinCen will visit Suriname later this month. The planning is made in close cooperation with the USA Embassy in Suriname. We do hope to file the application in early 2006. Because of the close working relation that FinCen has with Canada’s FinTrac, these agencies will have a joint fact finding mission to Suriname. The planning is, that the mission will meet representatives in both the public and private sector and than present their plan for assistance. The Financial Intelligence Unit (MOT) The following progress has been made after completion of the Mission: Under the MOT Act regarding of UTR’s financial and non- financial institutions are obliged to send their UTR’s to the MOT. The financial institutions consist of 5 categories
• Banks ≥ USD 10.000
• Life insurance companies ≥ USD 25.000
• Exchange offices (cambio’s) ≥ USD 10.000
• Saving –and credit unions ≥ USD 10.000
• Money transfer services≥ USD 5.000
48
From the 5 categories of financial institutions 3 categories (banks, exchange office and money transfers) are reporting UTR’s to the MOT. The MOT expects that all categories of the financial sector will report there UTR’s within few months because of the information session held by the MOT . Now more than 95% the financial sector are aware of the MOT and LIF Acts. The non- financial institutions( DNFBP’s) consist of 4 categories
• Notaries, real estate agent, accountants, Administrative offices, law firms ≥ USD 25.000
• Traders in gold, other precious metals and precious stones≥ USD 10.000
• Car dealersships ≥ USD 25.000
• Casino’s ≥ USD 5.000 From the 4 categories of non-financial institutions (DNFBP’s) 1 category (Notaries) is reporting UTR’s to the MOT. The total 9 categories in the financial and non-financial sector (DNFBP’s) consist of more than 100 institutions. At this time the MOT is not sufficiently staffed but steps are taken to conduct interviews with reflectants for the position of an administrative and analyst member in the MOT office . MOT Steering group A report was produced by the anti money laundering working group in which the idea was expressed regarding the establishment of a MOT steering group consisting members from the government and the private sector. The intention is to give the steering group the duty to discuss and advice in policy matters. The Minister of Justice and Police already instruct the MOT director to consult the financial and non financial industry in order to make adequate proposals of persons to be representative for these sectors in the steering group to be established. Regarding Foundations. The recommendation regarding the foundation will have a follow up. The drafting department of the Ministry of Justice and Police will be instructed to draft a complete new set of legislation because the existing legislation does have a lot of loupe holes. We asked assistance to draft this legislation and also in others areas assistance will be provided by the drafting department of the Ministry of Justice of Holland. Police Investigations. There was a slight increase in the staff of the FOT within the judicial Department of the police. Resent discussions in the area of output and performance of the FOT, resulted in the establishment of one joint team combining the FOT and the FRAUD Squad. This is merely to combine the investigative skills and to promote and support a better output. Also for the FOT steps have been taken to train them. With assistance from USA Embassy in Suriname, a financial investigative consultant working in the region, visit Suriname and the planning is that in mid November he will have training sessions for the police.
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Immigration Identification. There is an existing immigration/identification card, and those leaving or entering the Country are requested to full in the presented form. These forms are than reviewed and in case of a suspicious finding the immigration authority presents the case and the person involved, to the Fraud Squad of the Police for further investigation.
Customs Customs needs as expressed in par.21 are already addressed by the Minister of Finance. Training was brought to the Custom in which course a consultant from the UK named Crown Agent was very active. The Customs already introduced an integrity code and a compliance unit. A new management team has been appointed. Penal Sanctions. Bail is something that does not fit in our legal system, but action was undertaken to draft additional legislation to deal with the possibility to settle a criminal case with a fine. This is an already existing regulation but only applicable for small offences as stated in article 100 of the Penal Code. Regarding court sanctions it is good to say that additional legislation will also be drafted to introduce alternative court sanctions such as a task sentence and the learning sentence. Asset Fund A seized asset fund is already considered very helpful to support police and other law enforcement operations. Ministers of Finance and Justice and Police already decided to allocate a fixed percentage of the total amount of the collected fines on yearly bases for the police and the prosecutor’s office.
Special police tactics The use of special police tactics based on a convention, which has the status of a multi lateral treaty, is a possibility give by legislation. But than it should appear that the other cooperating country is also a party to the same convention. Under this condition controlled delivery can be used as a policy tactic. With respect to wire taping I may inform plenary that this is a provision within the criminal proceeding code. UN Convention on Terrorism Financing Steps are taken to process the approval by Parliament of the UN International Convention for the Financing of Terrorism. Also the financing of terrorism as an offence will be incorporated in the existing legislation and the regime for assets freezing and confiscation as applicable for money laundering will also apply for the financing of terrorism. The Central Bank of Suriname
A major concern is the role of the Central Bank. The Bank is of the opinion that in order to execute her duties in a legally perfected way there is a dire need to have the legal provisions in place. This is something that is still lacking in the system. However it is and will be addressed in recently enacted and coming legislation.
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The first act is the Supervision Act that will govern the deposit taking institutions, including banks and credit unions. The draft Supervision Act is now in a well advanced stage. It will be submitted by the Minister of Finance to the Council of Ministers for approval by the end of this month. The new legislation includes among other, the Basle Core Principles, which we are not fully compliant with at this time. It will expand the Banks powers to issue directives and guidelines beyond prudential regulations. The act will authorize the Central Bank to issue new detailed AML guidelines and to conduct AML on-site inspections to test for compliance. It must be noted that most if not all of the banks show increased awareness on this issue. The banks have appointed compliance officers, who usually are legal officers or in a few cases officers of the internal audit department, albeit that they are not committed full time to this work. It should be noted that once the legislation is passed the Central Bank has total autonomy to draft and issue all regulations, directives and guidelines that the act allows her to. Although not all financial institutions have money laundering manuals or code of conduct in place, they are still sufficiently aware of the MOT en LIF legislation and the treats posed by money laundering. They just can not avoid complying with the AML legislation that is already in place. In the Bank Act 1956 the Central Bank is explicitly appointed as the supervisor of the financial institutions. Recently (May 2005) the Bank Act has been amended to include supervision on the issue of the integrity of the financial institutions. The amendment also expands the Central Banks supervisory scope to cambios and money transfer companies. The drafting of detailed legislation on the supervision of money transaction companies is now underway. The new act on Supervision of Pension Funds and Provident Funds has been adopted by parliament and is in effect as of September 27th of this year. The Supervision Department of the Bank has drafted most of the regulations required by this act and implementation is imminent. Steps have been taken to increase awareness with the pension funds by targeted seminars and the general public by press releases. With regard to supervision of insurance companies the new legislation is still in a drafting stage. Initial steps have been taken to draft a new Foreign Exchange Act. The Central Bank has committed itself to submit such draft act to the Minister of Finance. Technical assistance in the drafting of this act has been agreed with the Bank of the Netherlands Antilles. The new act will incorporate the liberalization measures that were adopted in recent years and will replace the outdated foreign exchange act of 1947.
