Launch of The EU AML-CFT ESCAY Project : Kick-Off Workshop and Meeting of Heads of Asset Recovery Agencies
Honourable Mahen Seeruttun – Minister of Financial Services and Good Governance
Presidents of the Asset Recovery Inter agency Network East Africa and of the Asset Recovery Inter agency Network West Africa
Mr. Paul Keyton – Director of Integrity Reporting Services Agency, Mauritius
Mr President of ARIN-SA and VICE-CHAIR of the Information Exchange Working Group of the EGMONT GROUP
Dear participants from the Eastern, Southern African and Indian Ocean region
EU experts from the ESCAY Project and Mr Frederic Bayard, project director
Ladies and Gentlemen
I am extremely pleased to be present with you today, for the twin objective of the regional launch of the EU AML-CFT ESCAY project combined with a high level meeting of the Heads of Asset Recovery Agencies. ESCAY stands for the new EU funded project focussed on fighting Illicit Financial Flows in East, Southern, Central Africa & Yemen.
The question of Anti Money Laundering and Counter Financing of Terrorism has kept me busy over most of my mandate here in Mauritius.
I came in late 2019 and a few months later, Mauritius was placed on the high-risk list of both FATF and EU for AML/CFT.
Luckily this story has a happy ending with Mauritius being delisted in early 2022, thanks to the reforms implemented by the Government, and I would like here to commend Hon Minister Seeruttun for this important and exemplary achievement. But this was not without efforts!
The two years between the entry in the list and the exit were to say the least, quite intense.
I will come back to it later in my speech.
Let me first say a few words about the rationale for ESCAY project
Africa loses nearly 89 billion US dollars per year in Illicit Financial Flows (IFF), which corresponds to 3.7% of the continent GDP. This is huge and actually more than what Africa receives in development aid. Even if the sources of Illicit Financial Flows are varied, different forms of Transnational Organised Crime are among the main generators of illicit capital in the continent.
The objective of the ESCAY project is to disrupt transnational organised crime organizations and terrorist groups by precisely targeting their financial resources. This is obtained by a combination of actions: awareness raising, improved investigation and prosecution capacities, and enhanced channels for cross-border and multi-agency cooperation in East, Southern and Central Africa and Yemen.
But this is not easy. We all know that transnational organised crime and terrorism are among the most important threats to peace, security and stability around the world and in particular in Sub-Saharan Africa.
Given the volume of capital generated and moved illegally by these groups, it has been demonstrated that they can distort markets and financial structures. This happens most notably through Money Laundering and corruption. These scourges diminish the prospects of socio-economic development, as well as governments’ efforts to achieve the Sustainable Development Goals (SDGs).
It is now increasingly recognised that targeting the financing and proceeds from serious criminal activities and terrorism is one of the key strategies to effectively mitigate these threats.
Now, how can this be achieved? The answer is simple: by ensuring the implementation of powerful frameworks for Anti-Money Laundering and Combating the Financing of Terrorism and notably by ensuring robust financial investigations and prosecutions.
How can ESCAY project help you in this daunting task?
The overall objective of the ESCAY project is, I repeat,to contribute to reduce the incidence of transnational organized crime and terrorism in Eastern, Central, Southern Africa, as well as in Yemen. The proposed action aims at countering these organizations and terrorist groups by targeting their criminal financial resources, proceeds, assets across all countries in sub Saharan Africa and Yemen.
The action is perfectly aligned with our key framework documents: the Global Strategy for the EU Foreign and Security Policy, the EU Strategy to tackle Organised Crime, and thirdly the Communication Towards a comprehensive EU Strategy with Africa. The action will thereby contribute to SDG 16, in particular goal 16.4 (“significantly reduce illicit financial and arms flows, strengthen the recovery and return of stolen assets and combat all forms of organized crime”).
In order to reach this goal, two specific objectives should be achieved:
1. we need to improve effective, cooperative, gender-sensitive response against illicit financial flows (IFFs) in national public and private entities
2. we need in parallel to improve effective and gender-sensitive regional, inter-regional and international cooperation since by nature we or you are dealing with transnational crimes with regional and international ramifications.
Ladies and Gentlemen,
Let me say one word about the AML/CFT delisting of Mauritius
As I said at the beginning of my speech, over the almost four years I spent in Mauritius, AML/CFT issues constituted a critical issue. As you are aware, the EU is and remains concerned about the high risks associated with money laundering and terrorist financing; this because of their impact on the EU’s financial system and on the security of our citizens, as well as because of their impact on a global scale.
With this in mind, the EU’s legal framework on anti-money laundering and countering terrorist financing has been strengthened with the fifth Anti-Money Laundering Directive in force since July 2018. This legal framework not only reinforces the internal procedures and controls within the EU; it also mandates the Commission to identify third countries having strategic deficiencies in their regime, in order to prevent risks to the EU financial system and to the proper functioning of the EU internal market. The stability of our single market and financial system is critical to our growth, trade and development capacity.
In this respect, I wish to congratulate Mauritius on its remarkable progress in the area of Anti-Money Laundering in spite of the COVID-19 pandemic. The Financial Action Task Force (FATF) concluded in October 2021 that Mauritius made positive and tangible progress on all action plan items and decided to delist Mauritius, and in February 2022 the Commission adopted a legal act to delist Mauritius from the EU list of high-risk third countries.
Furthermore, the EU applauds the high-level political commitment of Mauritius to continue working on the reinforcement of its framework on AML/CFT in order to ensure continuous and effective compliance with the FATF recommendations. We all know it: it is a never-ending process and we need to keep adapting and strengthening our control systems.
EU support to countries
In January of this year, the European Commissioner for Financial Services, Mrs Mc Guinness, visited Mauritius in the context of an OACPS workshop that Mauritius hosted. It was a great opportunity for Mauritius to showcase its success story to other ACP countries.
I am sure many of you present here were also represented in this OACPS meeting, and you will have heard that the EU Commissioner Mc Guinness confirm the commitment of the EU to assist countries in providing capacity building and technical assistance in the field of AML/CFT. This is done via the Global Facility, but also this is precisely what the ESCAY project that is being launched today aims at doing. The project already has a wide experience in training the key actors in the field of AML/CFT namely those working in FIUs, Police, judiciary and asset recovery agencies. The participants in this room are from Asset Recovery Agencies and I can see from the agenda today that several countries will be sharing their experiences.
One of the core aims of the fight against Anti Money Laundering is to deprive criminals of their illicit assets. It is known that asset recovery is a key pillar of a countries’ approach to tackling money laundering and terrorist financing.
We need to hurt the traffickers where they fell it the most and this is not automatically by been arrested and imprisoned; it is by seizing their goods and that of their relatives and networks: their companies and accounts, their black 4 wheel SUVs, their boats, their shops, hotels and restaurants…by expelling their families from their luxury houses and apartments…Of course it is often legally complex and difficult to prove effective ownership, to manage the goods until the final judgement that will bring legal certainty and to finally recover the assets and the funds.
This appears as a daunting task, knowing that at the moment, countries intercept and recover less than one per cent of global illicit financial flows, according to estimates by the United Nations Office on Drugs and Crime. National authorities have therefore a critical role to play and at the same time a direct interest to develop more effective systems to trace, seize and confiscate stolen funds and assets, and eventually to return them to the country of origin. For this to happen, there should be fruitful investigations and sharing of information at both national and cross border level.
This is precisely why you, from Asset Recovery Agencies, are here under the EU-funded project ESCAY: it is to provide you with capacity building to achieve this.
I firmly believe that, besides the theoretical training, peer learning and best practices sharing are the most efficient ways for capacity building.
Before ending, I would like to thank all those who have worked hard to make this workshop happen. I am thinking here of Mr Bayard the ESCAY project director and his team. I also encourage all participants to seize the opportunity of this workshop to also build your network, because success, i.e. changing this 1% performance will depend on each of you!.
I wish you plenty of success in your endeavour, because citizens are watching you and expect effectiveness and results.
Therefore a very fruitful workshop and thank you for your kind attention.