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Laos Continues To Be Target For Money Laundering

Source: Vientiane Times

Laos continues to face a high risk of money laundering despite the country graduating from the “grey list” of the Financial Action Task Force last year, according to the National Money Laundering and Terrorist Financing Risk Assessment (NRA).

The main sectors vulnerable to this risk are banking, the stock market, insurance, casinos, real estate, financial institutions and money exchange shops, the Anti-Money Laundering Intelligence Office reported.

The assessment was summarised from consultations during a meeting held in Vientiane from August 21-23 between the task force committee for NRA, comprising experts from relevant sectors, and World Bank experts.

The meeting was important for Laos for the purpose of Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), said Deputy Minister of Public Security, Major General Kongthong Phongvichith, who is Vice-President of the National Committee for AML/CFT.

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He said the meeting will help to boost coordination with all relevant sectors, especially in implementation, finding solutions to challenges, and drafting an action plan.

Laos has not yet faced serious issues with regard to money laundering and terror financing but it needs to strictly follow the guidelines of the government and international banking regulatory bodies to prevent all forms of illegal money transfers.

Laos has not drafted a detailed plan on solutions to this issue but the country has drawn up priority actions for solutions and delegated responsibility to each sector.

The National Risk Assessment process allows countries to understand their money laundering and terrorist financing risks, and to develop and implement an effective national response, said World Bank Country Manager Mr Nicola Pontara.

Laos could benefit a lot from this process. For instance, by using a risk-based approach, the country can focus on prioritising its resources for activities that pose the highest risk to its economy, he said.
The strong commitment of the National Coordinating Committee on AML/CFT has made progress possible in the NRA process, he added.

He called for continued coordination and commitment by all concerned government agencies, as this is necessary for effective implementation of the risk-based action plan.

In October 2020, Laos is scheduled to undergo an evaluation under international standards for technical compliance and effectiveness of its AML/CFT framework.

The completion of the NRA and implementation of a risk-based approach to supervision and regulation, based on the findings from the NRA, will be closely scrutinised by the Asia-Pacific Group on Money Laundering, he said.

Mr Pontara underscored that the findings and implementation of any recommendations are owned and managed by Laos, with the World Bank’s technical support. He also stressed that NRA should not be about mere compliance with international standards, or satisfying foreign assessors, but rather to gain a genuine understanding of the risks.

Laos’ resources can then be used more wisely to mitigate against risks from international organised crimes such as drug trafficking, corruption, fraud, and human or natural resource trafficking.

Mr Pontara reiterated the World Bank’s commitment to partner with Laos in its efforts to develop a robust system that can effectively combat financial crimes and further strengthen its anti-money laundering and counter-terrorism financing systems.