|
|
Sanctions:
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2010:
Maldives is not an important regional financial center. The
financial sector of the Maldives is very small, with five commercial
banks, two insurance companies, and a government provident
fund. Although the crime rate in the Maldives is considered low,
there is an increasing use of narcotics. The Maldives is located in
an area prone to narcotics smuggling making the Maldives
vulnerable as a transit point for shipments of illicit drugs meant for
other nations and the laundering of narcotics proceeds.
Offshore Center: No
Free Trade Zones:
No information available.
Criminalizes narcotics money laundering: Yes
Law No. 17/77 on Narcotic Drugs and Psychotropic Substances
prohibits trafficking of illegal narcotics and the laundering of
proceeds from the illicit narcotics trade.
Criminalizes other money laundering, including terrorism-related:
No
The Government of Maldives (GOM) has drafted broader anti-
money laundering legislation.
Criminalizes terrorist financing:
Law No. 10/90 on Prevention of Terrorism in the Maldives deals
with some aspects of money laundering and terrorist financing.
Provision of funds or any form of assistance towards the
commissioning or planning of any terrorist activity is unlawful.
Know-your-customer rules: Yes
The Maldives Monetary Authority has issued know-your-customer
directives.
Bank records retention:
No information available.
Suspicious transaction reporting: Yes
The GOM has created a financial intelligence unit (FIU) within the
Maldives Monetary Authority (MMA). The main functions of the FIU
are to receive and analyze information on suspicious
transactions, and, as appropriate, refer it for investigation to law
enforcement agencies. The FIU is at an early stage of
development. In the short term, the FIU operates under
regulations and circulars issued under the MMA act of 1981.
Regulations to cover the FIU are expected to be included in the
new money laundering legislation. Through October 2009, the FIU
only processed four suspicious transaction reports.
Large currency transaction reporting:
No information available.
Narcotics asset seizure and forfeiture:
No information available.
Narcotics asset sharing authority:
No information available.
Cross-border currency transportation requirements:
No information available.
Cooperation with foreign governments:
No information available.
U.S. or international sanctions or penalties: No
Enforcement and implementation issues and comments:
The FIU distributes the United Nations’ lists of the proscribed
people and organizations. The Maldives does not have a national
sanctions list.
U.S.-related currency transactions:
No information available.
Records exchange mechanism with U.S.:
No information available.
International agreements:
The GOM is a party to:
* the UN Convention for the Suppression of the Financing of
Terrorism - Yes
* the UN Convention against Transnational Organized Crime - No
* the 1988 UN Drug Convention - Yes
* the UN Convention against Corruption - No
In 2008, the Maldives became a member of the Asia/Pacific Group
on Money Laundering (APG), a Financial Action Task Force-style
regional body. Maldives has not yet had a mutual evaluation.
Recommendations:
The Government of the Maldives (GOM) is developing its anti-
money laundering/counter-terrorist financing (AML/CFT) system.
The Maldives is in the process of drafting AML/CFT laws and
should work closely with the APG to ensure that countermeasures
adhere to international standards. The GOM should pass its draft
anti-money laundering law and provide adequate resources and
training to its new FIU to enable it to fulfill its responsibilities.
____________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2 Watch List)
The Maldives is primarily a destination country for migrant workers
from Bangladesh and, to a lesser extent, India, some of whom are
subjected to forced labor. Some women and girls also are
subjected to sex trafficking. An unknown number of the 80,000 to
110,000 foreign workers currently working in the Maldives –
primarily in the construction and service sectors – face conditions
indicative of forced labor: fraudulent recruitment practices,
confiscation of identity and travel documents, withholding or
nonpayment of wages, or debt bondage. Thirty thousand of these
workers do not have legal status in the country, though both legal
and illegal workers were vulnerable to conditions of forced labor.
Diplomatic sources estimate that half of the 35,000 Bangladeshi
workers in the Maldives went there illegally and that a number of
these workers are victims of trafficking. Migrant workers pay
$1,000 to $4,000 in recruitment fees in order to migrate to the
Maldives; such high recruitment costs increase workers’
vulnerability to forced labor, as concluded in an ILO report. In
addition to Bangladeshis and Indians, some migrants from Sri
Lanka, Pakistan, and Nepal reportedly experienced recruitment
fraud before arriving in the Maldives.
A small number of women from Sri Lanka, Thailand, India, China,
the Philippines, Eastern Europe, and former Soviet Union
countries, as well as some girls from Bangladesh, are subjected to
sex trafficking in Male, the capital. Some reports indicate that the
prostitution of local girls is also a problem in the Maldives. The
Human Rights Commission of the Maldives reported that some
migrant female domestic workers were trapped in circumstances
in which employers used threats and intimidation to prevent them
from leaving. Some underage Maldivian children are transported
to Male from other islands for forced domestic service, and a
small number were reportedly sexually abused by the families with
whom they stayed. This is a corruption of the widely
acknowledged practice where families send Maldivian children to
live with a host family in Male for educational purposes.
Trafficking offenders in the Maldives usually fall into three groups:
families that subject domestic servants to forced labor;
employment agents who bring low-skilled migrant workers to the
Maldives under false terms of employment and upon payment of
high fees for purposes of forced labor; and employers who
subject the migrants to conditions of forced labor upon arrival.
Recruitment agents in source countries generally collude with
employers and agents in the Maldives to facilitate fraudulent
recruitment and forced labor of migrant workers.
The Government of the Maldives does not comply with the
minimum standards for the elimination of trafficking in persons;
however, it is making significant efforts to do so, including ratifying
a counter-trafficking action plan. Despite these efforts, the
government has not demonstrated increased efforts to address
human trafficking over the previous reporting period; therefore,
the Maldives is placed on Tier 2 Watch List for a second
consecutive year. The government lacks systematic procedures
for identifying victims of trafficking among vulnerable populations,
and during the reporting period it did not investigate or prosecute
trafficking-related offenses or take concrete actions to protect
trafficking victims and prevent trafficking in the Maldives. Counter-
trafficking efforts are impeded by a lack of understanding of the
issue; a lack of legal structure; and a lack of a legal definition of
trafficking.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: No terrorist incidents occurred in the Maldives in 2010,
although there was growing concern about the activities of local
violent extremists and their involvement with transnational terrorist
groups. There was particular concern about the possibility of
young Maldivians joining violent extremist groups in Pakistan,
Saudi Arabia, and the Middle East and returning to the Maldives
to radicalize their peers and establish violent extremist groups.
The Vice President of the Maldives has publically voiced concerns
about young Maldivians being recruited by militant groups in
Pakistan and Afghanistan. In February, the government estimated
there were 200-300 unregistered Maldivian students in Pakistan.
There was an increasing trend, though a relatively small one, of
Maldivians joining terrorist organizations, including those with ties
to Lashkar-e-Tayyiba. Examples of Maldivians with known terrorist
ties included the nine Maldivians arrested by Pakistani authorities
for involvement with violent extremist groups in the Waziristan
region in March 2009, who were subsequently transferred to the
Maldives in 2010 and released. In addition, two of the 2007 Sultan
Park bombers incarcerated at Maafushi Prison had their
sentences changed from incarceration to three year suspended
sentences and were released in August 2010. The Sultan Park
bombing was the first recorded terrorist bombing in the Maldives,
and resulted in injury to 12 foreign nationals.
Because of concerns about radicalization and extremist
ideologies, the government continued to control all religious
matters, including religious affiliation, expression, education, and
worship. According to government officials, the purpose of this
tight control was to maintain a moderate Islamic environment
rather than an extremist one.
Legislation and Law Enforcement: The Maldives Police Services
led a stakeholder group in drafting a counterterrorism bill, with
assistance from INTERPOL and the UN Office on Drugs and
Crime. The bill was in the Attorney General's office for review at
year’s end.
In December, the Immigration Department began installing a new
border control system for the airport with biometric capacity and
an integrated database.
Countering Terrorist Finance: The Government of Maldives
recognized the need for legislation to enhance its ability to
prosecute in cases of anti-money laundering/countering terrorist
finance (AML/CTF) and fulfillment of UNSCRs. Existing legislation
in the Maldives did not criminalize money laundering, apart from a
small provision in the Drugs Act. The Maldives Financial
Intelligence Unit has taken the lead in drafting an AML/CTF act
with IMF assistance. In July, the draft bill was sent to the Attorney
General's Office. In November, the Maldives Monetary Authority
published for public comment a draft of the Maldives Financial
Transactions Reporting regulation. The draft regulation aims to
prevent the use of the financial system for money laundering and
terrorist financing.
Regional and International Cooperation: The United States and
the international community provided counterterrorism training to
Maldivian security forces and sponsored Maldivian officials and
security force personnel for regional conferences on combating
violent extremism.
Countering Radicalization and Violent Extremism: The Ministry of
Islamic Affairs ran a religiously-based counter-radicalization
program aimed at rehabilitating prisoners jailed for violent
extremism-related incidents. The Minister of Islamic Affairs has
written books against extremism and brought mainstream scholars
from other countries to talk to Muslims in the Maldives.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
None applicable
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2010:
Maldives is not an important regional financial center. The
financial sector of the Maldives is very small, with five commercial
banks, two insurance companies, and a government provident
fund. Although the crime rate in the Maldives is considered low,
there is an increasing use of narcotics. The Maldives is located in
an area prone to narcotics smuggling making the Maldives
vulnerable as a transit point for shipments of illicit drugs meant for
other nations and the laundering of narcotics proceeds.
Offshore Center: No
Free Trade Zones:
No information available.
Criminalizes narcotics money laundering: Yes
Law No. 17/77 on Narcotic Drugs and Psychotropic Substances
prohibits trafficking of illegal narcotics and the laundering of
proceeds from the illicit narcotics trade.
Criminalizes other money laundering, including terrorism-related:
No
The Government of Maldives (GOM) has drafted broader anti-
money laundering legislation.
Criminalizes terrorist financing:
Law No. 10/90 on Prevention of Terrorism in the Maldives deals
with some aspects of money laundering and terrorist financing.
Provision of funds or any form of assistance towards the
commissioning or planning of any terrorist activity is unlawful.
Know-your-customer rules: Yes
The Maldives Monetary Authority has issued know-your-customer
directives.
Bank records retention:
No information available.
Suspicious transaction reporting: Yes
The GOM has created a financial intelligence unit (FIU) within the
Maldives Monetary Authority (MMA). The main functions of the FIU
are to receive and analyze information on suspicious
transactions, and, as appropriate, refer it for investigation to law
enforcement agencies. The FIU is at an early stage of
development. In the short term, the FIU operates under
regulations and circulars issued under the MMA act of 1981.
Regulations to cover the FIU are expected to be included in the
new money laundering legislation. Through October 2009, the FIU
only processed four suspicious transaction reports.
Large currency transaction reporting:
No information available.
Narcotics asset seizure and forfeiture:
No information available.
Narcotics asset sharing authority:
No information available.
Cross-border currency transportation requirements:
No information available.
Cooperation with foreign governments:
No information available.
U.S. or international sanctions or penalties: No
Enforcement and implementation issues and comments:
The FIU distributes the United Nations’ lists of the proscribed
people and organizations. The Maldives does not have a national
sanctions list.
U.S.-related currency transactions:
No information available.
Records exchange mechanism with U.S.:
No information available.
International agreements:
The GOM is a party to:
* the UN Convention for the Suppression of the Financing of
Terrorism - Yes
* the UN Convention against Transnational Organized Crime - No
* the 1988 UN Drug Convention - Yes
* the UN Convention against Corruption - No
In 2008, the Maldives became a member of the Asia/Pacific Group
on Money Laundering (APG), a Financial Action Task Force-style
regional body. Maldives has not yet had a mutual evaluation.
Recommendations:
The Government of the Maldives (GOM) is developing its anti-
money laundering/counter-terrorist financing (AML/CFT) system.
The Maldives is in the process of drafting AML/CFT laws and
should work closely with the APG to ensure that countermeasures
adhere to international standards. The GOM should pass its draft
anti-money laundering law and provide adequate resources and
training to its new FIU to enable it to fulfill its responsibilities.
____________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 2 Watch List)
The Maldives is primarily a destination country for migrant workers
from Bangladesh and, to a lesser extent, India, some of whom are
subjected to forced labor. Some women and girls also are
subjected to sex trafficking. An unknown number of the 80,000 to
110,000 foreign workers currently working in the Maldives –
primarily in the construction and service sectors – face conditions
indicative of forced labor: fraudulent recruitment practices,
confiscation of identity and travel documents, withholding or
nonpayment of wages, or debt bondage. Thirty thousand of these
workers do not have legal status in the country, though both legal
and illegal workers were vulnerable to conditions of forced labor.
Diplomatic sources estimate that half of the 35,000 Bangladeshi
workers in the Maldives went there illegally and that a number of
these workers are victims of trafficking. Migrant workers pay
$1,000 to $4,000 in recruitment fees in order to migrate to the
Maldives; such high recruitment costs increase workers’
vulnerability to forced labor, as concluded in an ILO report. In
addition to Bangladeshis and Indians, some migrants from Sri
Lanka, Pakistan, and Nepal reportedly experienced recruitment
fraud before arriving in the Maldives.
A small number of women from Sri Lanka, Thailand, India, China,
the Philippines, Eastern Europe, and former Soviet Union
countries, as well as some girls from Bangladesh, are subjected to
sex trafficking in Male, the capital. Some reports indicate that the
prostitution of local girls is also a problem in the Maldives. The
Human Rights Commission of the Maldives reported that some
migrant female domestic workers were trapped in circumstances
in which employers used threats and intimidation to prevent them
from leaving. Some underage Maldivian children are transported
to Male from other islands for forced domestic service, and a
small number were reportedly sexually abused by the families with
whom they stayed. This is a corruption of the widely
acknowledged practice where families send Maldivian children to
live with a host family in Male for educational purposes.
Trafficking offenders in the Maldives usually fall into three groups:
families that subject domestic servants to forced labor;
employment agents who bring low-skilled migrant workers to the
Maldives under false terms of employment and upon payment of
high fees for purposes of forced labor; and employers who
subject the migrants to conditions of forced labor upon arrival.
Recruitment agents in source countries generally collude with
employers and agents in the Maldives to facilitate fraudulent
recruitment and forced labor of migrant workers.
The Government of the Maldives does not comply with the
minimum standards for the elimination of trafficking in persons;
however, it is making significant efforts to do so, including ratifying
a counter-trafficking action plan. Despite these efforts, the
government has not demonstrated increased efforts to address
human trafficking over the previous reporting period; therefore,
the Maldives is placed on Tier 2 Watch List for a second
consecutive year. The government lacks systematic procedures
for identifying victims of trafficking among vulnerable populations,
and during the reporting period it did not investigate or prosecute
trafficking-related offenses or take concrete actions to protect
trafficking victims and prevent trafficking in the Maldives. Counter-
trafficking efforts are impeded by a lack of understanding of the
issue; a lack of legal structure; and a lack of a legal definition of
trafficking.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2010
Overview: No terrorist incidents occurred in the Maldives in 2010,
although there was growing concern about the activities of local
violent extremists and their involvement with transnational terrorist
groups. There was particular concern about the possibility of
young Maldivians joining violent extremist groups in Pakistan,
Saudi Arabia, and the Middle East and returning to the Maldives
to radicalize their peers and establish violent extremist groups.
The Vice President of the Maldives has publically voiced concerns
about young Maldivians being recruited by militant groups in
Pakistan and Afghanistan. In February, the government estimated
there were 200-300 unregistered Maldivian students in Pakistan.
There was an increasing trend, though a relatively small one, of
Maldivians joining terrorist organizations, including those with ties
to Lashkar-e-Tayyiba. Examples of Maldivians with known terrorist
ties included the nine Maldivians arrested by Pakistani authorities
for involvement with violent extremist groups in the Waziristan
region in March 2009, who were subsequently transferred to the
Maldives in 2010 and released. In addition, two of the 2007 Sultan
Park bombers incarcerated at Maafushi Prison had their
sentences changed from incarceration to three year suspended
sentences and were released in August 2010. The Sultan Park
bombing was the first recorded terrorist bombing in the Maldives,
and resulted in injury to 12 foreign nationals.
Because of concerns about radicalization and extremist
ideologies, the government continued to control all religious
matters, including religious affiliation, expression, education, and
worship. According to government officials, the purpose of this
tight control was to maintain a moderate Islamic environment
rather than an extremist one.
Legislation and Law Enforcement: The Maldives Police Services
led a stakeholder group in drafting a counterterrorism bill, with
assistance from INTERPOL and the UN Office on Drugs and
Crime. The bill was in the Attorney General's office for review at
year’s end.
In December, the Immigration Department began installing a new
border control system for the airport with biometric capacity and
an integrated database.
Countering Terrorist Finance: The Government of Maldives
recognized the need for legislation to enhance its ability to
prosecute in cases of anti-money laundering/countering terrorist
finance (AML/CTF) and fulfillment of UNSCRs. Existing legislation
in the Maldives did not criminalize money laundering, apart from a
small provision in the Drugs Act. The Maldives Financial
Intelligence Unit has taken the lead in drafting an AML/CTF act
with IMF assistance. In July, the draft bill was sent to the Attorney
General's Office. In November, the Maldives Monetary Authority
published for public comment a draft of the Maldives Financial
Transactions Reporting regulation. The draft regulation aims to
prevent the use of the financial system for money laundering and
terrorist financing.
Regional and International Cooperation: The United States and
the international community provided counterterrorism training to
Maldivian security forces and sponsored Maldivian officials and
security force personnel for regional conferences on combating
violent extremism.
Countering Radicalization and Violent Extremism: The Ministry of
Islamic Affairs ran a religiously-based counter-radicalization
program aimed at rehabilitating prisoners jailed for violent
extremism-related incidents. The Minister of Islamic Affairs has
written books against extremism and brought mainstream scholars
from other countries to talk to Muslims in the Maldives.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
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| MALDIVES |
| KnowYourCountry |
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*Please note that FATF deems that a country has significant aml deficiencies if
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
Key Findings
The financial sector of the Maldives, although small and not very
developed, is susceptible to both money laundering and, to a
lesser extent, terrorist financing. While the authorities do not have
estimates of the size of the crime economy, anecdotal evidence
suggest that trafficking in illegal drugs and corruption alone produce
significant amounts of illegal funds. There are also indications that
resources have been raised in the country to fund terrorists and
terrorist activities abroad.
Over the last years, the Maldives has taken steps to lay down
the foundations of an AML/CFT framework. Institutional measures
have been taken to set up a financial intelligence unit (FIU), and laws
have been passed to criminalize, albeit insufficiently, the laundering of
the proceeds of drug-related offenses and impose basic AML/CFT
preventive measures on banks. Regulations were adopted to
address some AML/CFT aspects in the securities sector.
The current AML/CFT framework is very recent and in need of
considerable improvements, both in terms of substance and
implementation. Domestic inter-agency interaction relies on informal
arrangements between the competent authorities rather than
on formal arrangements, the criminal legal framework is minimal,
and most of the measures for the private sector are issued in
the form of guidance rather than mandatory requirements. At the
time of the assessment, no enforceable AML/CFT obligations were
in place. Shortly thereafter, the authorities passed a new Banking
Act which requires banks to implement basic AML/CFT measures
such as customer identification and reporting of suspicious
transactions to the FIU. Intermediaries in the securities sector are
required to implement limited AML/CFT measures which became
enforceable in April 2011. Financial institutions other than banks and
securities intermediaries, as well as designated businesses and
professions (DNFBPs) active in Maldives are not subject to AML/CFT
requirements.
The authorities are working on a draft AML/CFT law which would
impose more comprehensive AML/CFT preventive measures on
financial institutions and DNFBPs, strengthen key agencies such
as the FIU, and enhance domestic cooperation and coordination.
Click here to view full Mutual Evaluation Report (pdf file)
The financial sector of the Maldives, although small and not very
developed, is susceptible to both money laundering and, to a
lesser extent, terrorist financing. While the authorities do not have
estimates of the size of the crime economy, anecdotal evidence
suggest that trafficking in illegal drugs and corruption alone produce
significant amounts of illegal funds. There are also indications that
resources have been raised in the country to fund terrorists and
terrorist activities abroad.
Over the last years, the Maldives has taken steps to lay down
the foundations of an AML/CFT framework. Institutional measures
have been taken to set up a financial intelligence unit (FIU), and laws
have been passed to criminalize, albeit insufficiently, the laundering of
the proceeds of drug-related offenses and impose basic AML/CFT
preventive measures on banks. Regulations were adopted to
address some AML/CFT aspects in the securities sector.
The current AML/CFT framework is very recent and in need of
considerable improvements, both in terms of substance and
implementation. Domestic inter-agency interaction relies on informal
arrangements between the competent authorities rather than
on formal arrangements, the criminal legal framework is minimal,
and most of the measures for the private sector are issued in
the form of guidance rather than mandatory requirements. At the
time of the assessment, no enforceable AML/CFT obligations were
in place. Shortly thereafter, the authorities passed a new Banking
Act which requires banks to implement basic AML/CFT measures
such as customer identification and reporting of suspicious
transactions to the FIU. Intermediaries in the securities sector are
required to implement limited AML/CFT measures which became
enforceable in April 2011. Financial institutions other than banks and
securities intermediaries, as well as designated businesses and
professions (DNFBPs) active in Maldives are not subject to AML/CFT
requirements.
The authorities are working on a draft AML/CFT law which would
impose more comprehensive AML/CFT preventive measures on
financial institutions and DNFBPs, strengthen key agencies such
as the FIU, and enhance domestic cooperation and coordination.
Click here to view full Mutual Evaluation Report (pdf file)
AML News / Updates
January 9, 2011 - IMF report released - Maldives: Detailed
Assessment Report on Anti-Money Laundering and Combating the
Financing of Terrorism (January 2011)
Read Report
January 9, 2011 - IMF report released - Maldives: Detailed
Assessment Report on Anti-Money Laundering and Combating the
Financing of Terrorism (January 2011)
Read Report
| Last Updated: 16 April 2012 |