APG Annual Report Applications for permission to reproduce all or part of this publication should be made to:

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2 APG Annual Report Applications for permission to reproduce all or part of this publication should be made to: APG Secretariat Locked Bag A3000 Sydney South New South Wales 1232 AUSTRALIA Tel: Fax: E Mail: mail@apgml.org Web: APG 12 Annual September Report 2013/All rights reserved Page 2

3 CONTENTS APG Organisational Statements ( ). 4 APG Co-Chairs Report Certification.. 5 APG Co-Chairs Foreword. 6 Executive Secretary s Report.. 7 Part One: Overview and Summary.. 9 Part Two: Key Meetings Part Three: Performance Highlights 28 Part Four: Management and Accountability. 35 Part Five: Programmes and Plans in ATTACHMENTS. 47 Audit Report of Moore Stephens 12 September 2013 APG Financial Statements APG Terms of Reference 2012 Glossary of Abbreviated Terms APG Annual Report Page 3

4 APG ORGANISATIONAL STATEMENTS ( ) VISION A pro-active multilateral organisation contributing to a reduction in crime in the Asia/Pacific region through continuous efforts. MISSION To combat money laundering and the financing of terrorism and proliferation in the Asia/Pacific region through effective implementation of the international anti-money laundering and countering the financing of terrorism and proliferation (AML/CFT) standards by APG members and effective participation in the international AML/CFT standard-setting process. VALUES 1. Cooperation 2. Accountability 3. Consistency 4. Transparency 5. Equality To achieve the APG s Mission, the APG will: GOALS 1. Be a cohesive and effectively governed autonomous multilateral organisation. 2. Participate in the global AML/CFT network and support international cooperation on AML/CFT. 3. Assess and improve members compliance with the international AML/CFT standards. 4. Conduct research and analysis to enhance understanding of the ML, TF and PF environments and the effectiveness of AML/CFT efforts. 5. Assist members to implement the international AML/CFT standards through guidance, advice and coordination of technical assistance and training.

5 APG CO-CHAIRS REPORT CERTIFICATION To: APG Members In accordance with Section 6.5 of the APG Terms of Reference 2012 requiring the filing and signing of Annual Reports and financial statements by the APG Co-Chairs, we submit the following report to the membership on the operations of the Asia/Pacific Group on Money Laundering for the period 1 July 2012 to 30 June This report highlights the achievements of the APG over the reporting period against the Goals and Strategies contained in the APG Strategic Plan This report also contains additional information as required by public sector agencies under Australian law which, although the APG is not bound to include, is nevertheless included as a matter of best practice. The independent audit report of Moore Stephens (Accountants) of Canberra, Australia dated 12 September 2013 is attached to this report. 12 September 2013 [signed] Deputy Commissioner Andrew Colvin APG Co-Chair Australia [signed] Deputy Director General Liu Zhengming APG Co-Chair China APG Annual Report Page 5

6 APG CO-CHAIRS FOREWORD The first year of our new mandate ( ) has now concluded and we are very pleased with the results achieved against our new Strategic Plan and our Annual Business Plan Deputy Director-General Liu Zhengming Over the year, the APG undertook in excess of 60 missions across a range of key areas including governance, outreach, global network participation, support to members under the FATF s ICRG monitoring, technical assistance/implementation, and workshop/private sector awareness outreach. We are pleased that not only were these activities achieved but all within budget including a budget surplus of $144,000. This surplus allowed the overall increase to the current year s budget to be kept down to only 2.9% compared to an increase last year ( ) of 14%. Deputy Commissioner Andrew Colvin The budget surplus results, in part, from a considerable amount of voluntary funding from APG members and observers across a range of functional areas including governance, technical assistance, travel sponsorship and Secretariat infrastructure. Primary donations over the year have been made by Australia, Canada, China, Commonwealth Secretariat, India, New Zealand, Singapore, Chinese Taipei and the United States. The total amount of voluntary funding from all of these sources in the year was almost $1,000,000. Further details on the content of these grants and their purpose are provided in this report, but we would like to acknowledge at the outset the importance of these funding sources for the continued operations of the APG. On behalf of the membership we thank these members and organisations for their valuable and on-going support. Many of the programmes planned in could not have been undertaken without this generous support. Over the year we have modified to some extent the role and functions of the APG Steering Group. Originally established in 2002 to provide strategic advice to the Co-Chairs and membership on the structure, functioning and support for the APG, it has evolved to a decision-making body in a number of important areas. The Steering Group now may consider and decide, by consensus, policy or operational issues referred to it by the APG membership and, in other cases, by the Secretariat where the Steering Group decides that this is necessary. The Steering Group may also now decide on individual applications for observer status in the APG. This new structure has worked well against the backdrop of the growing size and operations of the APG. Without the Steering Group s new role it would be difficult to conclude many important matters requiring attention outside the venue of an Annual Meeting. During the last year the Steering Group met five times and examined important policy and operational issues relating to governance, membership issues and funding; mutual evaluation policy and follow-up issues; and oversight of the technical assistance and training strategy and operations. The Steering Group has matured considerably into an effective governance body and is the mechanism now by which the APG is able to efficiently function between Annual Meetings. Finally, before closing, we want to acknowledge the significant effort of four APG members which have been removed from FATF monitoring through the International Cooperation Review Group, namely: Brunei Darussalam, the Philippines, Sri Lanka and Thailand. Removal from the ICRG process is an important achievement and the result of over two years of extensive policy development and implementation within each of these members to address the requirements of their ICRG Action Plans. These members have all made important improvements to their levels of technical compliance with the international standards. We look forward to another successful APG year and to the 2014 Annual Meeting to be held in Macao, China. 12 September 2013 [signed] Deputy Commissioner Andrew Colvin APG Co-Chair Australia [signed] Deputy Director General Liu Zhengming APG Co-Chair China APG Annual Report Page 6

7 EXECUTIVE SECRETARY S REPORT The past year has been very busy and challenging. In terms of the APG s 91 tasks outlined in the Business Plan against our overall strategies stated in the Strategic Plan , the APG was able to meet all but four (4) of its agreed tasks. Those four tasks (identifying trained experts for 3rd round of evaluations, ensuring those experts attend required meetings, planning and delivering an assessor training workshop, and conducting pre-mutual evaluation training) were contingent on the FATF finalising a variety of its own policy initiatives. Unfortunately, it was unable to accomplish those tasks within the financial year. So, while we have met 95% of our set tasks this year, the remaining 5% Dr Gordon Hook could not be achieved due to circumstances beyond our control. This has not, however, diminished our overall successes for the year. In our five key programme areas we managed to broadly achieve the following outcomes: Governance and membership: Our organisation continues to grow with new observers and with jurisdictions in the region exploring membership options. A new organisational working group structure for mutual evaluations (approved in July 2013) and a new Secretariat structure (since 2012) to accommodate new staff and streamline functional areas will help facilitate further work during the next year. External (voluntary) funding arrangements with members and observers (outlined in the Co-Chairs Foreword) continue to assist the membership in accomplishing its strategic goals. Without those sources of funds the activities of the APG would be severely restricted. Mutual evaluation programme: A large amount of complex policy work has been undertaken during the year in relation to the FATF s mutual evaluation methodology and follow-up processes for the next evaluation round. The APG contributed significantly to this process. As our second round follow-up procedures are still in effect (until 2015) 40 progress reports were completed in the year, many involving APG review teams. Each report was individually considered and adopted at the 2013 Annual Meeting with some significant issues identified for further membershiprelated action. Implementation assistance: The APG takes a strategic approach to the delivery of its technical assistance programme by focusing on thematic areas identified as common gaps in legislative, administrative and training measures across the membership. Twenty (20) ICRG-related visits to APG members occurred during the year involving technical assistance needs assessments and support. Additional technical assistance involving on-site visits and the Strategic Implementation Planning Framework were conducted. The Annual Technical Assistance and Training Forum 2013 involved face-to-face meetings with donor jurisdictions and organisations and over 25 meetings with individual APG members. An in-depth IIWG project to study lessons learned from implementing investigations and prosecutions of money laundering continued throughout the year and will result in a public report in Typologies: The Annual Typologies and Capacity Building Workshop held in Hanoi, Vietnam in November 2012 was successful in attracting a large number of delegates and delivering concrete outcomes. For the first time the Typologies Workshop included dedicated typologies sessions involving the private-sector. A typologies workshop for the APG s Pacific members was held in March 2013, the first such sub-regional typologies workshop in the APG, and several Pacific typologies projects are underway. In addition, an in-depth project to study money laundering and terrorist financing vulnerabilities in the gold sector was approved at the 2013 Annual Meeting in Shanghai, China. Work products and work planned in the typologies area mean that the APG continues to stay on the cutting edge of money laundering and terrorist financing research and to contribute to global initiatives in this area. Associate membership/global network: A number of FATF meetings were attended during the year (three plenaries and three regional review group meetings and inter-sessional meetings). Extensive input was provided to the FATF in relation to APG members within the ICRG process. While there were successes this year with four APG members being removed from ICRG review there are still 11 members within the ICRG process at varying stages. The APG continues to provide technical support and information to those members working their way through this process. As for the global network, close ties have been developed with the Eurasian Group (EAG), the Eastern and South African Anti-Money Laundering Group (ESAAMLG) and the Middle East and North Africa Financial Action Task Force (MENAFATF) through a variety of programmes and meetings. We are currently working very closely with the EAG on a joint typologies workshop in Mongolia in September APG Annual Report Page 7

8 On behalf of the Co-Chairs and entire membership, I would like to thank all delegates who participated in the APG s programmes during the last year including members of the Steering Group, mutual evaluation review teams, working group co-chairs and project leaders, Donor and Provider Group members, APG members of the FATF s Asia-Pacific Regional Review Group and those members and observers who participated in various APG member-visits. Without that dedicated participation throughout the year we would not have had the successes we did. I would also like to thank (as did the Co-Chairs in their Foreword) Australia, Canada, China, Commonwealth Secretariat, India, New Zealand, Singapore, Chinese Taipei and the United States for their substantial voluntary contributions in the year which made many of our activities possible. On a final note, I would once again like to express my gratitude on behalf of the APG membership to the Australian Government, in particular the Australian Federal Police, for its generous administrative hosting support for the Secretariat, including office accommodation, legal, human resources and information technology support and for the provision a project officer secondee to the Secretariat, all at no cost to the membership -- a significant cost saving for all members. I would also like to thank other Australian government agencies, including AUSTRAC, the Attorney-General s Department and the Department of Foreign Affairs and Trade for their continuing support on a range of topics of importance to the membership. The Secretariat looks forward to the challenges ahead in September 2013 [signed] Dr Gordon Hook APG Executive Secretary APG Annual Report Page 8

9 PART ONE APG Annual Report Page 9

10 PART ONE OVERVIEW AND SUMMARY OVERVIEW OF APG Establishment of APG The APG was established in Bangkok, Thailand in 1997 through an initiative by the FATF Asia Secretariat (funded by Australia) starting in In co-operation with other international bodies, the FATF Asia Secretariat worked to consolidate support for anti-money laundering measures. Its primary objective was to obtain wide regional commitment to implement anti-money laundering policies and initiatives and secure agreement to establish a more permanent regional anti-money laundering body. Typologies Workshops were held in Hong Kong, China in October 1995 and November 1996, and the Third Asia Money Laundering Symposium was held in Tokyo, Japan in December At the Fourth (and last) Asia/Pacific Money Laundering Symposium (in Bangkok) in February 1997, the APG was officially established by Terms of Reference as an autonomous regional anti-money laundering body. At the same time a new APG Secretariat was established to be located in, and financially supported by, Australia. APG Terms of Reference (1997 and 2012) The 1997 Terms of Reference were endorsed by the APG s 13 founding members, namely Australia; Bangladesh; Chinese Taipei; Hong Kong, China; Japan; New Zealand; People s Republic of China; Philippines; Singapore; Sri Lanka; Thailand; United States of America; and Vanuatu. This document served as the constitutional framework document for the APG, together with supplemental documents endorsed subsequently to the Terms of Reference (i.e., Explanatory Note on Membership and the Steering Group Terms of Reference), until July 2012 when it was replaced by a more comprehensive and streamlined APG Terms of Reference The new APG Terms of Reference 2012 (attached to this report) consolidates and rationalises the APG reporting and governance framework. It also formally recognises and endorses the revised FATF standards (2012) which will form the core standards for the APG s next round of mutual evaluations. Role of APG Available at The primary objective of the APG is to combat money laundering, the financing of terrorism and the financing of proliferation of weapons of mass destruction in the Asia/Pacific region through effective implementation of the international anti-money laundering and countering the financing of terrorism and proliferation (AML/CFT) standards by APG members and effective participation in the international AML/CFT standard-setting process. In order to achieve this objective the APG has six primary functions. Those functions are to: 1. Provide a focus for co-operative efforts to combat money laundering and the financing of terrorism/ proliferation in the region; 2. Provide a forum in which regional issues can be discussed and experiences shared, and where operational cooperation among members is encouraged; 3. Facilitate the adoption and implementation by members of internationally accepted combating of money laundering and financing of terrorism and proliferation measures; 4. Enable regional and jurisdictional factors to be taken into account in the implementation of international combating of money laundering and the financing of terrorism and proliferation measures; 5. Encourage jurisdictions to implement combating money laundering and the financing of terrorism and proliferation initiatives including more effective mutual legal assistance; and 6. Co-ordinate and provide practical support, where possible, to members and observer jurisdictions in the region which request it. APG Annual Report Page 10

11 APG ORGANISATIONAL STRUCTURE The APG is an autonomous, voluntary and co-operative multilateral organisation established by consent among its 41 members. The APG s strategic direction, finances, business plan, work schedule and priorities, and its procedures are determined on a consensus basis among all members. Under the APG Terms of Reference 2012 there are five principal APG bodies as follows (described below in order of importance): Membership; Co-Chairs; Steering Group; Working Groups (of which there are four); and Secretariat. Diagrammatically the APG is structured as follows: APG Organisational Structure The following provides greater detail on the organs and functions of the APG. Members and Observers The membership is the decision-making body of the APG. All other organs (Co-Chairs, Steering Group and Secretariat) are ultimately responsible to, and report to, the APG membership. Since its establishment in 1997 the APG has grown considerably. From its original 13 founding members it now consists of 41 members across the largest geographical region in the world making it the largest FATF-style regional body (geographically and membership size). 10 members of the APG are also members of the FATF, namely: Australia; Canada; China; India; Hong Kong, China; Japan; Korea; New Zealand; Singapore; and the United States. For efficient management and effective representational purposes for the 41 members, the APG region is divided into five easily identifiable and logical sub-regions as follows: 1. North Asia 2. South East Asia 3. South Asia 4. Pacific 5. Other APG Annual Report Page 11

12 The membership composition of each sub-region effective 30 June 2013 is as follows: APG Members by Sub-Region North Asia South East Asia South Asia Pacific CANZUS China Brunei Darussalam Afghanistan Cook Islands Australia Hong Kong, China Cambodia Bangladesh Fiji Canada Japan Indonesia Bhutan Marshall Islands New Zealand Macao, China Lao PDR India Nauru United States Mongolia Malaysia Maldives Niue Republic of Korea Myanmar Nepal Palau Chinese Taipei Philippines Pakistan Papua New Guinea Singapore Sri Lanka Samoa Thailand Solomon Islands Timor Leste Tonga Vietnam Vanuatu APG Co-Chairs The APG has two Co-Chairs: Australia, as host of the APG Secretariat, holds one Co-Chair position (a permanent position) and the other is rotated among APG members every two years. The rotating Co-Chair position is currently held by China with a term from July 2012 to July Both Australia and China are founding members of the APG in The Co-Chairs are responsible for chairing APG meetings and providing strategic advice and direction to the membership. Co-Chair, China (July ): Mr Liu Zhengming is Deputy Director- General of the Anti-Money Laundering Bureau of the People s Bank of China (PBC). During his career he has held a number of responsibilities in the areas of international cooperation, domestic coordination, policy making and antimoney laundering supervision. Before he took current position with PBC in 2007, Mr Liu Zhengming served as Deputy Chief of the Division of Supervision over Foreign Financial Institutions in the Foreign Affairs Department of the People s Bank and then as the Chief of the International Monetary Fund Division of the People s Bank. Since 2002 he has been the Chief Representative at the Frankfurt Representative Office. Mr Liu Zhengming has a Bachelor s degree in International Finance and a Master s degree in Banking and Finance. Deputy Director-General Liu Zhengming Deputy Commissioner Andrew Colvin Co-Chair, Australia: The Australian Co-Chair position is held by Australian Federal Police (AFP) Deputy Commissioner Close Operations Support, Andrew Colvin. Deputy Commissioner Colvin joined the AFP in 1990 and was appointed to his current role responsible for Close Operations Support in Prior to this appointment he was the Deputy Commissioner Operations from 2010 to During his career he has held a number of portfolio responsibilities including serious and organised crime, counter terrorism, terrorism financing, high tech crime, drug trafficking, money laundering and politically motivated crime. Between 2002 and 2005, he managed the national and international aspects of the AFP s response to terrorism, including the 2002 Bali bombings, the 2003 Jakarta Marriott Hotel bombing and the 2004 Australian Embassy bombing. Deputy Commissioner Colvin was awarded the Order of Australia Medal for his contribution to the 2002 Bali bombing investigation. Previous Rotating Co-Chairs Since the APG s establishment in 1997 there have been a number of rotating Co-Chairs as follows: APG Annual Report Page 12

13 APG member Agency/Department Date Philippines: Department of Foreign Affairs Malaysia: Central Bank of Malaysia Korea: Korea Financial Intelligence Unit Japan: Japan Financial Intelligence Office Indonesia: Indonesian Financial Transaction Reports & Analysis Centre Singapore: Commercial Affairs Department India: Directorate of Enforcement Incoming Rotating Co-Chairs New Zealand (July ) After China s term expires in 2014, New Zealand will assume the chair for The New Zealand government has agreed to host an Annual Meeting in New Zealand is a founding member of the APG. Sri Lanka (July ) Sri Lanka was endorsed in July 2013 as the rotating Co-Chair for following the completion of New Zealand s term and will host an Annual Meeting in Sri Lanka is a founding member of the APG. Steering Group The APG Steering Group is an advisory and governance group established under the APG Terms of Reference 2012 with cross-regional representation of the five major Asia/Pacific sub-regions. The purpose of the Steering Group is to provide the Co-Chairs and members with strategic advice on the structure, functioning and support for the APG and to consider and decide on issues referred to it by the membership. To achieve this purpose, members of the Steering Group consider governance and other issues of strategic importance referred to it. Members of the group also: Provide advice to the APG Co-Chairs and APG members through the APG Secretariat on issues of strategic importance. Advise on potential future Co-Chairs of the APG. Assist with engaging and influencing all APG members to effectively participate in APG activities, including leading or sponsoring specific APG projects. Encourage non-members in their geographic area to join the APG and consider, as required, the participation of non-members and non-observers in APG events on a case-by-case basis. Membership in the APG Steering Group includes representatives from each of five geographical sub-regions within the APG. In addition, the current APG Co-Chairs, and the immediate past and nominated future Co-Chair (for one year each) are members of the Steering Group. Donors and Providers (DAP) Group and APG Working Groups The APG DAP Group and a number of working groups have been formed by the APG membership since the APG s establishment. Their function is to address specific issues and report to the membership on those issues. Currently there are four working groups as follows: DAP Group; Typologies Working Group; Implementation Issues Working Group; and Working Group on Mutual Evaluations and Follow-up. DAP Group: The DAP Group was established by written terms of reference endorsed by the membership in At that time there was a need for a strategic framework and central contact point to coordinate technical assistance with bi-lateral and multi-lateral AML/CFT donors in the region for low capacity APG members. The DAP Group has evolved into a core operating group and has 12 APG donor members and 14 donor observer organisations as members. The APG Secretariat chairs face-to-face DAP Group and teleconference meetings. APG Annual Report Page 13

14 Each year the DAP Group meets, concurrently with the APG Annual Meeting, at the Annual Forum on Technical Assistance and Training. Individual donor sessions are held with APG members where donors and providers are encouraged to commit to tailored technical assistance programmes to assist members to more closely comply with the international AML/CFT standards. The APG Secretariat chairs the DAP Group by agreement of the membership and individual DAP group members. Typologies Working Group: The APG Typologies Working Group, established at the 2003 Annual Meeting, built on the earlier APG Working Group on Alternative Remittances and Underground Banking. APG members recognised the importance of having a formal working group committed to researching and analysing emerging trends and issues in relation to money laundering and terrorist financing. Each year the Typologies Working Group manages research projects and organises the publication of APG Annual Typologies Reports and individual research reports. The Terms of Reference for this working group were updated in July 2013 to more accurately reflect its roles and functions, and to take account of developments in the global AML/CFT sector. The new Typologies Terms of Reference provide for contact group engagement with the private sector in recognition of the APG s commitment to more effective cooperation. The Typologies Working Group is currently co-chaired by Fiji and India. Implementation Issues Working Group: The Implementations Issues Working Group (IIWG) was established by formal terms of reference at the 2003 APG Annual Meeting to build on and develop the work done by the APG Working Group on Information Sharing. The purpose of the IIWG is to assist APG members to effectively implement the FATF 40 Recommendations. To achieve this, the IIWG provides practical assistance to APG members through the provision of post mutual evaluation implementation materials and tools in collaboration with evaluated members and the DAP group. This assists members who have just been evaluated to systematically identify and meet compliance gaps identified in the mutual evaluation report. The IIWG also provides information and advice to donors and providers to assist in the development of programs to assist members to address practical implementation issues. The IIWG also undertakes in-depth projects with relevant bodies to study implementation lessons and practice. The IIWG is currently co-chaired by New Zealand and Hong Kong, China. Working Group on Mutual Evaluations: This working group was formally established in July 2013 as a replacement for the previous ad hoc working group on FATF standards. Its mandate is to oversee the APG s mutual evaluation programme, mutual evaluation follow-up issues and consistency between mutual evaluation reports. This working group contributes to APG policy input into the FATF relating to the FATF standards, including best practice papers and assessment methodology. This working group will also make recommendations to the full membership on action, if needed, to address on-going deficiencies reflected in individual member progress reports (a function previously performed by the APG Steering Group). The Working Group on Mutual Evaluations is co-chaired by Australia and another member to be identified. Secretariat The APG Secretariat is part of the governance structure of the APG. Its primary role is to support the operations of the APG including the Co-Chairs, Steering Group, Working Groups and individual APG members. The Secretariat acts as a focal point for the APG. Its primary responsibilities include: Supporting the governance framework of the APG, including Co-Chairs and Steering Group; Providing secretariat services to and serving as a focal point for the APG membership; Coordinating and leading AML/CFT mutual evaluations; Implementing the APG's technical assistance and training (TA&T) strategy including the effective coordination of those services with donors and providers; Providing expertise and research on money laundering, terrorist financing and proliferation financing in relation to weapons of mass destruction as well as other emerging issues to members and interested persons and organisations; Organising and conducting the APG's Annual Meeting and other inter-sessional meetings, such as Working Groups and special project groups; APG Annual Report Page 14

15 Preparing, conducting and chairing the Annual Typologies Workshop for law enforcement and finance sector specialists to analyse and share information on methods, trends and case studies, and to conduct projects on emerging typologies; Reporting to APG members at Annual Meetings and Working Groups; Attending FATF Plenary meetings as an Associate Member and liaising regularly with the FATF Secretariat; Participating in the FATF's Asia/Pacific Regional Review Group on International Cooperation and supporting APG members subject to this process; Providing advice and information to, and linkages between, international and regional agencies (especially financial, legal and law enforcement agencies) on money laundering, terrorist financing and proliferation financing matters; Establishing and maintaining effective working relationships with relevant international and regional organisations, including the UN, World Bank, International Monetary Fund, Asian Development Bank, Egmont Group, OECD, APEC, Pacific Islands Forum Secretariat, ASEAN, the Group of International Finance Centre Supervisors, and other similar bodies to advance the APG's strategic goals; Providing information and education to private sector agencies, including Universities and other tertiary education institutions, in relation to the global AML/CFT standards under the APG's private sector outreach programme. In discharging these responsibilities, the Secretariat supports approximately 400 delegates from its 41 members and observers (jurisdictions and international organisations), as well as providing policy and administrative support across a range of business activities. STRATEGIC INTERNATIONAL CONTEXT In the APG Terms of Reference of 1997 and in subsequent amendments, it was recognised that the FATF standards constitute the international standards for anti-money laundering and combating the financing of terrorism. This was carried forward in the APG Terms of Reference 2012 with a formal endorsement by the full membership of the newly revised 2012 version of those standards at the 15 th Annual Meeting of the APG in July Since its inception, the APG has worked closely with the FATF and other FATF-Style Regional Bodies (FSRBs) both in terms of development of the FATF standards and in terms of coordinating joint programmes, research and workshops. In June 2006 the APG was granted Associate Membership in the FATF. This type of membership permits the APG to have direct access into the policy-making and standard-setting process of the FATF. The significance of this relates directly to non-fatf APG members who may attend FATF plenary meetings as APG delegates. Since 2006, the level of non-fatf APG participation has increased significantly as more and more APG members take an active interest in the process by which the FATF makes global AML/CFT policy. In July 2007 at the APG Annual Meeting in Perth, Australia a rule was agreed that any FSRB admitted to the FATF as an Associate Member is automatically an observer in the APG. All of these FSRBs are FATF Associate Members and therefore Observers in the APG. The APG, FATF and the other seven FSRBs form an effective inter-connected network committed to reducing serious financial crime around the globe. The other FATF-style regional bodies are: CFATF Caribbean Financial Action Task Force, based in Trinidad and Tobago; EAG Eurasian Group, based in Moscow, Russia; ESAAMLG Eastern & Southern Africa Anti-Money Laundering Group, based in Dar es Salaam, Tanzania; GAFISUD South America Anti-Money Laundering Group, based in Buenos Aires, Argentina; GIABA West Africa Money Laundering Group, based in Dakar, Senegal; MENAFATF Middle East and North Africa Financial Action Task Force, based in Manama, Bahrain; MONEYVAL Council of Europe Anti-Money Laundering Group, based in Strasbourg, France The APG and FATF have reciprocal rights of attendance at each other s meetings as well as reciprocal sharing of documents and participation in working groups. The APG and FATF are involved in joint mutual evaluations of common members of both organisations. APG Annual Report Page 15

16 Global AML/CFT Network The Global FSRB network includes 183 jurisdictions around the world, 41 of which are APG members In addition to the FSRBs already been mentioned there are a number of other key participant-observers (jurisdictions and organisations). All APG Observers (jurisdictions and organisations) are listed in the following table: APG Observers (effective 2013) Jurisdictions Organisations FSRBs France APEC Secretariat Group of Int l Finance Centre Supervisors CFATF Germany Asian Development Bank Oceania Customs Organisation EAG Kiribati* Interpol Pacific Islands Forum Secretariat ESAAMLG Micronesia ASEAN Secretariat Pacific Financial Technical Assistance Centre FATF Russian Federation Commonwealth Secretariat United Nations GAFISUD United Kingdom Egmont Group of FIUs UN Office on Drugs and Crime GIABA IMF World Bank MENAFATF ADB/OECD Anti-Corruption Initiative World Customs Organisation MONEYVAL Pacific Island Chiefs of Police* Pacific Islands Legal Officers Network* *re-instated July 2013 *admitted following 2013 Annual Meeting *admitted following 2013 Annual Meeting STRATEGIC AND OPERATING PLANS The APG adopts four-year Strategic Plans, Annual Business Plans and an annual Budget all of which are prepared by the Secretariat, approved by the membership, and reported to the membership on their expiry. The APG also has a communication strategy (Information and Communications Strategy 2010) that outlines the framework within which the APG manages the information it collects during the course of it business and the rules relating to engagement with the private sector, including the media. APG Annual Report Page 16

17 APG Reporting Framework The APG s formal reporting structure requires a number of performance and outcomes-based reporting as follows: Annual Report; Mid-year report and budget update; Report Against Business Plan; Report Against Strategic Plan (at expiry of four year strategic plan). Budget expenditures are reported to the membership in the mid-year report, on a preliminary basis at mid-point in the financial year, and in a detailed Budget Paper for the APG Annual Meeting. Independently audited and detailed annual financial statements are prepared after the Annual Meeting each year and attached to the Annual Report. SIGNIFICANT APG MEETINGS EACH YEAR The APG holds three significant meetings each year: APG Annual Meeting; Annual Forum on Technical Assistance and Training; and Annual Typologies and Capacity Building Workshop. Available at APG Annual Meeting: The full membership meets once a year in plenary (usually in mid-july) to discuss a range of issues but primarily to make the necessary strategic and business decisions for the operation of the APG. Decisions are made on confidential issues, such as membership action, the budget, strategic and business plans (as well as reports against those plans), policy issues including FATF associate membership issues, mutual evaluation reports and follow-up reports and other issues. Annual Meetings are hosted by the rotating Co-Chair usually every second year and are convened over a five day period with extra days as required. Annual Forum on Technical Assistance and Training: Each year the APG's Annual Forum on Technical Assistance and Training convenes during the week of the APG Annual Meeting to address regional technical assistance needs. The Annual Forum includes a series of meetings between the DAP Group and individual APG members to discuss priority assistance needs and assistance. Annual Typologies and Capacity Building Workshop: Yearly typologies and capacity building workshops are held by the APG (usually in October or November) to bring together law enforcement and regulatory experts to discuss money laundering and terrorist/proliferation financing trends as well as policy issues emerging from those trends. These workshops generally have topical 'themes' to provide a focus for the discussion. Delegates during these meetings also consider ways to improve international co-operation in the detection, investigation and seizure of terrorist finances and proceeds of crime, and where appropriate, the repatriation of the proceeds of crime, especially when the proceeds are transmitted to other jurisdictions. SUMMARY OF THIS ANNUAL REPORT Outline of Report Structure This Annual Report summarises the achievements of the APG against the Strategic Plan from 1 July 2012 to 30 June 2013, incorporating outcomes from the 16th Annual Meeting in July 2013 convened in Shanghai, China. The report is divided into five Parts and is prefaced by reports from the APG Co-Chairs and the Executive Secretary. Part One provides a background summary of the APG as an organisation. Part Two contains a summary of the 16 th Annual Meeting. Notwithstanding that the Annual Meeting each year falls outside the reporting period it has been the practice of the APG to report on the major outcomes of the meeting as part of the activity of the organisation for the financial year. APG Annual Report Page 17

18 Part Three of this report contains a detailed performance report against the strategic goals and key performance indicators in the APG Strategic Plan The five goals are: Goal 1: APG Governance and Accountability Goal 2: Global Participation and Cooperation Goal 3: Assessing Compliance Goal 4: Research and Analysis Goal 5: Implementation Assistance Part Four of this report outlines the management and accountability structures in place in relation to the APG Secretariat including a statement of the structure of the Secretariat, an outline of the Secretariat s hosting arrangement and risk management framework, issues relating to staff and asset management. The APG financial statements are also discussed in this part together with a summary of the financial outcomes of the year. Part Five is a summary statement of major APG activities planned for the coming financial year ( ). Table of APG Activities Below is a list of all APG Activities in divided into three categories: APG ACTIVITIES, MISSIONS AND CONFERENCES Associate Member Activities APG Plenaries, Meetings, Visits Conferences, workshops, seminars WGEI Intersessional Meeting, France, September 12 ICRG RRG Face-to-Face, Australia, September 12 FATF Second Experts Meeting on Corruption, France, October 12 FATF Plenary and WG Meetings, France, October 12 WGEI Intersessional Meeting, Luxembourg, December 12 ICRG RRG Face-to-Face Meeting, Hong Kong, China January 13 FATF Plenary and WG Meetings, France, February 13 ICRG RRG Face-to-Face, Thailand, May 13 FATF Plenary and WG Meetings, Norway, June 13 APG Annual Meeting and TA&T Forum, Australia, July 12 Membership/ICRG Mission, Myanmar, August 12 High-level ICRG Meeting, Indonesia, September 12 High level ICRG Meeting, Pakistan, October 12 TA&T Mission, Papua New Guinea, October 12 APG Outreach Mission, Thailand, November 12 APG Typologies Workshop, Vietnam, November 12 SIP Mission, Timor-Leste, November 12 FATF Standards Workshop North Asia, South Korea, December 12 NPO Regional Workshop, Australia, December 12 APG/ComSec South and South East Asian Regional Workshop on Corruption, December 12 ICRG Mission, Cambodia, December 12 ICRG Mission, Lao PDR, December 12 Meeting with DPRK, Hong Kong, January 13 Niue SIP Mission, New Zealand, January 13 Membership Mission, Vanuatu, January 13 Meetings with NZ Justice and MFAT, New Zealand, February 13 Nauru SIP Mission, Australia, February/March 13 Pacific Typologies Workshop and FATF Standards Workshop, Australia, March 13 Meeting with Commonwealth Secretariat, United Kingdom, February 13 Meetings with US Treasury and Justice, USA, March 13 APG/IMF FATF Standards and National Risk Assessment Workshop, Singapore, March 13 ICRG Mission, Mongolia, March 13 ICRG Mission, Vietnam, March 13 ESAAMLG Judicial Workshop, South Africa, September 12 4th International Conference on Financial Crime & Terrorism Financing, Malaysia, September 12 DCI & Royal Brunei Police Force Regional Conference 2012, Brunei, October 12 UNCTED Workshop UNSCR 1373, Netherlands, October 12 ADB/OECD Anti-Corruption Initiative, Vietnam, October 12 PILON 2012 Annual Meeting, Papua New Guinea, October 12 APEC Risk Assessment Workshop, Singapore, November 12 Global Counterterrorism Forum, Indonesia, January 13 UNODC Tri-fold Expert Working Group on Precursors / Cross-Border Cooperation and Legal Frameworks / Illegal Financial Flows, the Netherlands, February 13 CGCC/UNCTED/UNCTITF Expert Working Group Meeting on Preventing Terrorist Abuse of the Non-profit Sector, USA, March 13 ComSec Financial Inclusion and Literacy Seminar, Sri Lanka, March 13 NZ Senior Alliance Group (SAG) Principals Meeting, May 13 AUSTRAC/Palau FIU Micronesia FIU Networking workshop, Palau, May 13 AFP s Terrorism Financing Investigations Workshop, Indonesia, May 13 Forum Regional Security Council (FRSC) meeting, Fiji, May 13 APG Annual Report Page 18

19 China and Macao, China, Pre-Annual Meeting, visits April 13 Sri Lanka RRG Exit Mission, Sri Lanka, April 13 Brunei RRG Exit Mission, Brunei, April 13 ICRG Mission, Lao PDR & Cambodia, April 13 APG/ASEAN Joint Workshop on Supervision, Malaysia, April 13 Philippines RRG Exit Mission, Philippines, May 13 Thailand RRG Exit Mission, Thailand, May 13 ICRG Mission, Myanmar, May 13 FATF Standards and SIP Risk Assessment workshop, Sri Lanka, May 13 FSM high-level mission, June 13 3 trips to Canberra by Secretariat to AFP HQ for APG financial briefs and meetings with APG Co- Chair Asian Regional Law Enforcement Management Program (ARLEMP). Vietnam, June 13 ACAMS and FIU AML/CFT Seminar, NZ, June 13 Strategic Implementation Planning (SIP) Workshop in Dili, Timor Leste, 20 and 21 November Timor Leste joined the APG in 2008 and was evaluated in the APG s 2 nd round programme in The SIP workshop was designed to assist government officials in Timor Leste to prepare a detailed plan to implement to recommendations made in that report. Members of the Singapore delegation to the APG Annual Meeting Singapore is a founding member of the APG (1997) and is also a member of the FATF. Singapore was evaluated by the APG and FATF jointly in 2008 and provides a voluntary contribution to the APG to support its programmes. APG Annual Report Page 19

20 PART TWO APG Annual Report Page 20

21 PART TWO 16TH ANNUAL MEETING AND TECHNICAL ASSISTANCE FORUM APG TYPOLOGIES WORKSHOPS 16 th Annual Meeting and Technical Assistance Forum Background Under the APG's Terms of Reference 2012 the APG must meet at least once each year in plenary. The purpose of Annual Meetings is to discuss the APG's strategic directions and work programme. Discussions cover issues such as: Structure and operation of the APG (including its Terms of Reference, planning issues, budget etc); Mutual evaluations of members; Implementation issues of members; Technical assistance and training issues; Money laundering methods and counter-measures; and Special issues and developments of significance to members. 16 th Annual Meeting 2013 L: Mr Li Dongrong, Deputy Governor People s Bank of China R: Mr Tu Guangshao, Executive Vice-Mayor of Shanghai The 2013 APG Annual Meeting was convened in Shanghai, China from 15 to 19 July 2013 at the Wyndham Grand Plaza Royale Oriental. Over 400 delegates attended the meeting from 48 jurisdictions (41 members; 5 observer jurisdictions (France, Germany, Russian Federation, United Kingdom, Kiribati); 1 guest jurisdiction (DPRK). Ten (10) observer organisations (ADB, Commonwealth Secretariat, EAG, ESAAMLG, FATF, PFTAC, PIFS, UN, UNODC, World Bank) also attended the meeting. The plenary was opened by Mr Li Dongrong, Deputy Governor of The People s Bank of China, and Mr Tu Guangshao, Executive Vice-Mayor of Shanghai. The Vice-Mayor remarked that Shanghai is an important international financial and conference centre and was pleased to see the APG delegates using the city as an Annual Meeting venue. Both officials warmly welcomed all delegates to Shanghai and wished everyone a successful meeting. FATF President Vladimir Nechaev, of the Russian Federation, also addressed the plenary and stated that: Since its establishment in February 1997, the APG has grown from 13 to 41 members. The APG s membership now encompasses all of the major jurisdictions in the region, and includes a wide range of jurisdictions, from the largest economies in the world to a number of micro-states. But whatever their size and nature, all APG members are committed to implementation of the international AML/CFT standards and, with the APG as the focal point, working together to achieve effective implementation. Your work in APG makes a vital contribution to our global efforts both through your participation in the work of the FATF, and through your essential work with member countries on mutual evaluation reports and follow-up; as well as on training and technical assistance. Mr Vladimir Nechaev APG Annual Report Page 21

22 Major Annual Meeting Outcomes The major outcomes of the 16th APG Annual Meeting follow: APG CO-CHAIR CHINA China is a founding member of the APG and is also a member of the FATF and EAG. Since 2012 Deputy Director-General Liu Zhengming of the People s Bank of China has represented China as APG Co-Chair. He is also China s head of delegation to the FATF and is past Chairman of the EAG. Membership issues APG members noted a report relating to a high level membership related visit to the Federated States of Micronesia (FSM). It is anticipated that in the next financial year ( ) FSM will apply for full membership. Members also considered an application by Kiribati to have its observer status re-instated (revoked in 2009 for non-participation). Noting the presence of a high level delegation from Kiribati and a renewed commitment to participate in APG activities the membership strongly supported that re-instatement of Kiribati. The membership also noted a significant degree of outreach in the year to the Democratic Peoples Republic of Korea and the Pacific nation of Tuvalu and supported further outreach in the coming year. Governance/finance A new Business Plan for was adopted with a supporting budget outlining a busy year for The core budget agreed for is $2,037,270 representing an increase of 2.9% over last year s core budget. In agreeing to this budget, members noted that the continued availability of accumulated equity (or reserves above the minimum proposed carry over reserve of $200,000) in of approximately $139,000, reduced members fees by the same amount in the coming year. With this agreed budget, activities for include a number of membership-related missions; workshops; premutual evaluation visits to APG members to be evaluated early in the next round; ICRG-related assistance missions for Opening ceremony 16 th Annual Meeting, Shanghai, China. 400 delegates participated in this event. Canada, New Zealand, Chinese Taipei and the United States sponsored many of the delegates to attend. APG Annual Report Page 22

23 APG members under the FATF s ICRG monitoring process; and technical assistance and training/implementation missions up to 15 of these missions. Many of these initiatives are outlined in in greater Part Five of this report. Mutual evaluation programme The mutual evaluation progress reports of 30 APG members, 10 progress reports of joint APG/FATF members and one (1) member status report (outlining policy, technical and statistical information in relation to each member s domestic AML/CFT systems) were examined and discussed during the Annual Meeting. Of those reports 13 members were considered not to have made sufficient progress against the recommendations contained in their mutual evaluation report. As a consequence, the membership placed these members on either enhanced or expedited mutual evaluation follow-up. Amendments to the 2 nd round mutual evaluation follow-up procedures were adopted together with a new mutual evaluation schedule for the 3 rd round of evaluations commencing in In the coming year, a number of training programmes will be developed for expert evaluators to apply the new assessment methodology and for training of APG members on how to prepare for a new evaluation. Typologies The Typologies Working Group (co-chaired by Fiji and India) met during the Annual Meeting week to: Review new Terms of Reference for this group (subsequently adopted); Finalise the draft of the APG s Annual Typologies Report 2013; Discuss typologies projects to date; Discuss new projects for the coming year including work with the FATF; and Discuss the upcoming joint APG/EAG Typologies workshop to be held in Mongolia in September During the APG plenary session this work was reviewed and the Annual Typologies Report adopted. The report contains a synopsis of the typologies projects undertaken in ; an overview of all FATF/FSRB projects; a statement of recent trends on money laundering and terrorist financing; and a number of cases studies. ANNUAL FORUM ON TECHNICAL ASSISTANCE AND TRAINING OUTCOMES Technical Seminars Available at Three technical seminars were conducted on Monday of the Annual Meeting plenary week as follows: Technical Seminar 1: New Aspects of the FATF Standards Financing of Proliferation: Recommendation 7. Bangladesh and New Zealand co-chaired this seminar. Presentations from the FATF and the United Nations were made on the content of the new recommendation, relevant FATF guidance notes, effectiveness issues, UN Security Council Resolutions 1874 and Implementation experiences from China, France, New Zealand and Bangladesh was shared with seminar participants. Technical Seminar 2: FATF Standards Regulatory Aspects. The Risk-Based Approach and Politically Exposed Persons. Malaysia and the FATF co-chaired this seminar with presentations from Malaysia, New Zealand, Fiji, India, Philippines, Bangladesh and Papua New Guinea. Some of the topics discussed were the risk-based approach in relation to financial inclusion and an overview of politically exposed persons (PEPs) including experiences with the regulations of PEPs. Technical Seminar 3: FATF Standards Operational Aspects. Law Enforcement, Investigation & Prosecutions and International Cooperation. Hong Kong, China and Fiji co-chaired this seminar. Presentations and discussion focused on the enhanced requirements in the revised FATF standards relating to law enforcement authorities and financial intelligence units. These were also presentations on strategic analysis and on advanced investigative techniques. APG Annual Report Page 23

24 Major Outcomes from Annual Forum During the 2013 Annual Forum on Technical Assistance and Training the following activities occurred: Individual meetings were held between the APG s Donors and Providers (DAP) Group and 23 members on TA&T needs and current and planned delivery of assistance; Two meetings were held by the DAP Group relating to planning and delivery of TA&T; Two sub-regional meetings for ASEAN and Pacific Islands Forum members, jointly chaired by APG/ASEAN Secretariats and APG/Pacific Islands Forum Secretariats respectively were conducted; Three technical seminars for all APG members and observers on TA&T issues that are emerging as a result of the revised FATF standards; and A joint report from the DAP Group delivered to the plenary on their TA&T activities and outcomes of the Forum Participants discussed TA&T summaries for all recipient members and TA&T gap analyses for members under ICRG review as well as needs information from APG members collected in the lead up to the Forum. As a result the following outcomes were achieved: Based on discussions and needs expressed at the Forum, a bilateral donor has offered substantial funding to a prominent multilateral technical assistance and training provider to run a workshop in the next 6 months on key CFT issues for APG members; Agreement within the DAP Group that Myanmar needs assistance in coordinating donors; Enhanced understanding by the DAP Group regarding the concerns of APG members that require guidance and technical assistance in undertaking national risk assessments this was expressed a number of times in individual sessions and at two regional sessions; One donor is pursuing an internal proposal to fund an advisor in order to assist a number Pacific jurisdictions to undertake national risk assessments; Increased understanding by Papua New Guinea of the ICRG process and possible impacts, after a one-on-one meeting with the APG Secretariat; Ad hoc inaugural meeting of the South Asia members to discuss creation of a South Asia association of financial intelligence units; Agreement by the Association of Pacific Financial Intelligence Units to support the proposed APG multiworkshop event that will include the Trans-Pacific Drugs Route project meeting, a workshop on risk assessment, and complete mutual evaluation assessor training; Delivery of a group statement by the DAP Group in support of their own coordination, the Forum and the APG technical assistance and training coordination function; Agreement to hold a Recommendations 6 and 7 meeting for Donors and Providers; An offer from the United States to host this workshop in the US. The APG, in conjunction with the APG/ASEAN Coordinating Group, conducted a regulatory/supervisory workshop in Kuala Lumpur, Malaysia from 22 to 24 April 2013 APG Annual Report Page 24

25 APG TYPOLOGIES WORKSHOPS Background Typologies workshops are held by the APG to bring together experts and delegates to discuss money laundering and terrorist financing trends as well as policy issues emerging from those trends. These workshops generally have topical 'themes' to provide a focus for the discussion and have five main purposes - to: Bring together expert law enforcement and regulators experts in order to share knowledge and experience; Identify the current ways by which proceeds of crime are laundered and terrorism is funded in the Asia/Pacific region; Determine any emerging money laundering and terrorist financing trends or patterns within and between jurisdictions in the Asia/Pacific region; Consider and make recommendations about money laundering and terrorist financing counter-measures; and Consider ways to improve international co-operation in the detection, investigation and seizure terrorist finances and proceeds of crime, and where appropriate, the repatriation of the proceeds of crime, especially when the proceeds are transmitted to other jurisdictions. These workshops underline the vital importance of cooperation between jurisdictions and between agencies within those jurisdictions to effectively combat profit driven crime and terrorism. The APG plays an important role in the global fight against money laundering, terrorist financing and financing of proliferation. In the financial year the APG held two typologies workshops: Annual Typologies Workshop 2012 in Hanoi, Vietnam; and APG Pacific Typologies Workshop 2013 in Brisbane, Australia. Annual Typologies Workshop 2012 The 2012 Typologies Workshop was held in Hanoi, Vietnam from 19 to 23 November 2012 and was chaired by the Director of the Financial Intelligence Unit of Fiji (APG Typologies Working Group Co-Chair); Special Director, Enforcement Directorate, India (APG Typologies Working Group Co-Chair); and the Chief Director of the Banking Supervisory Agency, Vietnam. Delegates from across the region (166 in total) attended the workshop. 166 APG delegates attended the Annual Typologies Workshop in Hanoi, Vietnam, November 2012 The central topics on this year s workshop agenda were: Money laundering and terrorist financing vulnerabilities with specific designated non-financial businesses and professions; Money laundering and terrorist financing vulnerabilities with hawala/underground banking; Laundering the proceeds of corruption; APG Annual Report Page 25

26 Trade-based money laundering, proceeds of tax offences; Addressing the policy gap in proceeds of crime and prosecuting money laundering; Building strategic partnerships within the private sector and between government and the private sector on AML/CFT risks / vulnerabilities and responses. Breakout sessions dealt individually with these topics. There were also special presentations on counterfeit currency and separately on cooperation with the private sector. Pacific Typologies Workshop 2013 The 2013 Pacific Typologies Workshop was held in Brisbane from 4 to 8 March It was the first APG sub-regional typologies workshop and was attended by more than 60 delegates from 12 Pacific APG members, as well as from Australia, Indonesia, New Zealand, the United States and the United Kingdom. The Pacific Island Forum Secretariat, the Pacific Island Law Officers network, Kiribati and Tuvalu also attended and contributed as observers. The Workshop was hosted by AUSTRAC (Australia s FIU and AML/CFT regulator) and sponsorship funding to support priority delegates to attend the Workshop was provided by Australia, the Pacific Island Forum Secretariat and the United States. Niue case study discussed during Pacific Typologies Workshop in Brisbane, Australia 2013 The workshop enabled members and observers, who face similar issues and challenges, to share information, build capacity and strengthen networks. In addition, four new Pacific-focused APG typologies projects were launched at the workshop that seek to address issues of significance in the Pacific: Money laundering risks associated with offshore financial centres, co-led by Cook Islands and Samoa; Frauds and money laundering in the Pacific, co-led by Fiji and Vanuatu; Recovering the proceeds of corruption in the Pacific, co-led by Papua New Guinea and Tonga, in association with PILON; and Money laundering and terrorist financing risks and vulnerabilities associated with trans-pacific drug trafficking project co-lead by Tonga and Vanuatu. High level APG membership mission to Micronesia, June 2013 Mongolia delegates to APG Annual Meeting. Mongolia will host the joint APG/EAG Typologies Workshop in September 2013 APG Annual Report Page 26

27 Below: FATF/APG on-site visit to Brunei Darussalam as part of the FATF s international cooperation (ICRG) review process. Brunei was found to be in substantial completion of its ICRG Action Plan. As a result, the FATF removed Brunei from ICRG monitoring in June Left: The Sri Lankan FIU hosted an APG workshop on the revised FATF standards in Colombo from 28 to 30 May 2013 for APG delegates from South Asia. 63 delegates attended the workshop from South Asia. Right: APG workshop on revised FATF standards for North Asia delegates hosted by the Korean FIU (KoFIU). 36 delegates from North Asia APG members attended. APG Annual Report Page 27

28 PART THREE APG Annual Report Page 28

29 PART THREE PERFORMANCE HIGHLIGHTS APG STRATEGIC PRIORITIES The APG s strategic priorities are outlined in the APG Strategic Plan as a series of five goals each containing a subset of strategies or performance outcomes against which the goals are designed to be measured. These performance outcomes are set against a framework of APG values which, as an organisation, the APG endeavours to incorporate into its operational activities and assert in its dealings with other international organisations, including the global AML/CFT network. Below is a summary of the performance highlights of the APG for the financial year under each strategic goal. Strategic Goal #1 Be a cohesive and effectively governed autonomous, multilateral organisation Effectively Governed Organisation Support effective governance structures Meetings: China organised, hosted and delivered the 2013 APG Annual Meeting in Shanghai, China (see Part Two of this report for detailed event summary). Co-Chairs: A change of rotating Co-Chairs occurred to China from India effective July Macao, China will host the Annual Meeting in 2014 during China s term as Co-Chair. In July 2012 the membership endorsed New Zealand as the incoming Co-Chair for a two-year term effective July 2014 to July In July 2013 the membership endorsed Sri Lanka as the Co-Chair for a two year term from 2016 to 2018 subsequent to New Zealand. Steering Group: The APG Steering Group effectively represented the five APG sub-regions throughout the year on a variety of policy and operational topics ranging from crucial member/observer issues to governance matters of strategic importance to the membership. Commit adequate resources A number of APG members and observers made voluntary contributions throughout the year to support the operations of the APG, namely: Australia, Canada, China, Chinese Taipei, New Zealand, Singapore, United States and the Commonwealth Secretariat (observer). The following members/observers provided facilities for APG activities: Australia: RRG meetings, Pacific Typologies Workshop, FATF standards workshop; SIP meetings. New Zealand: SIP meetings. Malaysia: FATF standards workshop. Hong Kong, China: RRG meetings. Singapore: FATF standards/national risk assessment workshop. Sri Lanka: FATF standards/sip risk assessment workshop; APG/Commonwealth Secretariat workshop. Korea: FATF standards workshop Thailand: RRG meeting. Vietnam: 2012 Typologies Workshop. APG expert workshop facilitators and trainers were provided by the following members and observers: Australia; China; Cook Islands; India; Malaysia; Macao China; Papua New Guinea; United States; Malaysia; Hong Kong, China; Fiji; Palau; the Philippines; Chinese Taipei; New Zealand; FATF Secretariat; IMF; Pacific Islands Forum Secretariat; United Kingdom; UN; UNODC; and World Bank. The provision of these experts ensured successful delivery of all workshop and training activities. APG Annual Report Page 29

30 Support Secretariat to ensure proper management of APG funds and assets China s voluntary contribution of $345,000 provided the funds necessary to engage a senior officer in the Secretariat in Australia (AFP) provided a typologies research officer to the Secretariat through a secondment arrangement (at no cost to membership) for an indefinite period. Australia (AFP) continued to provide Secretariat office space with extensive use of AFP assets to ensure proper a fully functioning and effective Secretariat to support APG operations throughout the financial year. Australia (AFP) provided internal financial and HR services together with internal financial audit services to the Secretariat in order to ensure that financial management and accountability of APG funds meet Australian legal requirements. Encourage expanded membership Membership outreach continued in the year with: Micronesia: outreach to Micronesia continued during the year with a high level delegation visiting the capital city (June 2013) to encourage a membership application. Outreach will continue in the next financial year. Kiribati: continuing outreach resulted in attendance at Pacific Typologies Workshop in Brisbane (March 2013) and observer reinstatement application. Kiribati s observer status was granted by the membership in July Tuvalu: applied for guest status to attend the Pacific Typologies Workshop in Brisbane, Australia in March While not a member or observer, discussions with officials at the meeting were held on possible observer status being granted should they apply. DPRK: two face-to-face meetings with DPRK officials in the year; a request to attend the 16 th Annual Meeting as a guest was granted. Maintain effective communications The APG website service (public and private) was upgraded during the year through the grant of funds for this purpose from the Government of India in the amount of $60,000. The improved website provides a more efficient platform for distribution of public and non-public information, documents and notices. A number of telephonic meetings were arranged through the Secretariat for priority matters including: Steering Group, DAP Group, Ad Hoc WG on FATF standards, IIWG and Typologies WG. Strategic Goal #2 Participate in the Global AML/CFT Network and Support International Cooperation on AML/CFT Global Participation and Cooperation Participation in policy making The APG actively maintained its associate membership status in the FATF throughout the year by attending: three (3) FATF plenary meetings and two (2) FATF inter-sessional meetings to support development of the revised FATF standards and assessment methodology. 13 individual APG members participated as delegates in FATF plenaries and other meetings through the mechanism of Associate Membership The APG membership provided policy comment on all FATF initiatives relating to the international standards including the methodology for assessing compliance in the 3 rd round through the ad hoc working group on FATF standards. Mechanisms for international engagement The APG actively engaged with FATF, EAG, ESAAMLG, MENAFATF, Commonwealth Secretariat, World Bank, United Nations as follows: The FATF, EAG and ESAAMLG participated in the 16 th Annual Meeting. EAG participated in the APG Typologies Workshop. APG worked jointly with the FATF and World Bank on updating the FATF guidance on financial inclusion and AML/CFT. APG Annual Report Page 30

31 APG and Commonwealth Secretariat conducted a joint capacity building workshop in Hanoi, Vietnam. APG worked with ESAAMLG and Commonwealth Secretariat on regional judicial training. APG and MENAFATF are partnered on a joint best practices paper on technical assistance. APG and EAG agreed on joint organisation and delivery of the 2013 Typologies Workshop in Mongolia. APG and United Nations (CTED) worked together to deliver global NPO sector vulnerabilities project and continue to work together on another global project relating to terrorist assets freezing mechanisms. Supporting APG members The Secretariat provided extensive support to APG members in the FATF s ICRG process through onsite missions (21), exchange of information, technical advice and procedural advice. Technical assistance donors were informed of all aspects of members requirements to comply with ICRG obligations. The Secretariat represented the views of APG members under ICRG review at FATF plenaries. Four (4) APG members were removed from ICRG review. planned with identified delegates to undertake evaluation training. Assessment Training Delay in training this year (originally planned for April 2013) was due to non-completion of FATF material. Organisation and planning for APG assessment training in the next financial year ( ) commenced. Mutual Evaluation Procedures Members made policy comment on FATF procedures and amended second round mutual evaluation follow-up procedures to better reflect changing policy environment and lessons learned during the year. Mutual Evaluation Follow-up Review teams for 20 progress reports were organised and coordinated. Interveners were selected by the Secretariat for the 2013 Annual Meeting. APG membership considered progress reports and members endorsed required membership-related action in 10 cases. Strategic Goal #4 Strategic Goal #3 Assess and Improve Members Compliance with International AML/CFT Standards Conduct Research and Analysis to Enhance Understanding of Money Laundering, Terrorist/Proliferation Financing Environments Research and Analysis Assessing and Improving Compliance 3rd Round Mutual Evaluation Programme The 3rd round APG mutual evaluation programme was approved by members. Mutual evaluations of Malaysia and Sri Lanka were APG Typologies Working Group Co-Chairs (Fiji and India) managed Typologies Working Group and projects, and maintained oversight of preparation the APG Annual Typologies Report The Report was published in July Typologies Workshops Two (2) typologies workshops were delivered: APG Annual Report Page 31

32 Annual Typologies Workshop, in Vietnam; Pacific Typologies Workshop, in Australia. Mongolia will host 2013 Annual Typologies Workshop. Thailand was identified as 2014 host. Identifying Typologies Issues Typologies Working Group adopted a project on money laundering and terrorist financing vulnerabilities with gold and gem dealers. Cooperating with Global Typologies Partners APG participated/contributed to FATF typologies projects on counterfeit currency and hawala. APG and EAG agreed on joint typologies workshop in 2013 to be held in Mongolia. Strategic Goal #5 Assist Members to Implement the Standards through Guidance, Advice and Technical Assistance and Training Implementation Assistance Supporting IIWG New Zealand and Hong Kong, China jointly chaired the Implementation Issues Working Group (IIWG) and its related projects. Domestic and Regional Implementation Issues The IIWG continued its project on identifying lessons learned with investigating and prosecuting money laundering. The IIWG commenced a project with the DAP Group on lessons from implementing targeted financial sanctions. APG worked jointly with World Bank and FATF on published guidance relating to financial inclusion. Three (3) Strategic Implementation Planning workshops were delivered (Nauru, New Zealand and Timor Leste). APG and Commonwealth Secretariat are working jointly on implementation issues relating to small states. Private Sector Engagement The November 2012 Typologies and Capacity Building Workshops included dedicated sessions with the private sector. The APG Typologies Working Group Terms of Reference were amended to include private sector engagement and cooperation. APG will undertake a workshop in 2014 for private sector NPOs to raise awareness of sector vulnerabilities to terrorist financing. Membership Technical Assistance Needs APG delivered the 2013 Annual Forum on Technical Assistance and Training and conducted 23 individual needs assessment sessions during the Forum. Technical assistance information collection was completed in July 2013 to form the basis for assistance projects in next financial year. Assistance with Global Partners APG conducted four (4) sub-regional workshops on the revised FATF standards (for North Asia, the Pacific, South East Asia and South Asia). APG Secretariat provided information and advice to DAP Group members to assist in developing and designing TA&T projects to build capacity and enable effective implementation of AML/CFT standards. APG conducted a sub-regional workshop on Preventing the Abuse of NPOs in December APG conducted a joint APG/ASEAN AML/CFT Regulatory/Supervisory Workshop in April APG and Commonwealth Secretariat delivered a joint workshop for prosecutors and law enforcement agencies from South and South East Asia in December APG Annual Report Page 32

33 Below: Joint Commonwealth Secretariat/APG South and South East Asian Regional Workshop on Investigation and Prosecution of Economic and Financial Crime, Sri Lanka December The workshop was attended by prosecutors, investigators and experts from Australia, Bangladesh, Brunei Darussalam, Maldives, Malaysia, Pakistan, Singapore and Sri Lanka. The 24 delegates undertook desk top exercises involving the recovery of corruption proceeds. Above and right: The 31 st Pacific Islands Legal Officers Network (PILON) annual meeting was held in PNG from 29 to 31 October The APG attended this meeting and presented to the Attorneys-General from 13 Pacific APG members and 2 Pacific APG observers on How to counter corruption by using AML/CFT. PILON has chosen Corruption and Proceeds of Crime as one of its three strategic priorities to address over the next two years. PILON and the APG are currently working together on a typologies project led by Papua New Guinea and Tonga, both of whom are members of the APG. PILON became an Observer in the APG in 2013.

34 Above: The Minister of Justice for Thailand (centre) visited the APG Secretariat offices in Sydney, Australia in 2013 to discuss a range of issues including hosting the 2014 APG Typologies Workshop in Bangkok. Above right: Parliament House in the capital city of Tarawa, Kiribati. Kiribati was re-admitted as an APG observer in July Initially an observer from 2002, Kiribati s observer status was discontinued in 2009 but was re-instated in 2013 with the unanimous agreement of the APG membership. Above left: Cultural performance in Kiribati. Left: Chairman of the Senate of Pakistan (right) exchanging views with APG Executive Secretary on the FATF s review of Pakistan by the ICRG. Islamabad, Pakistan, 4 October APG Annual Report Page 34

35 PART FOUR APG Annual Report Page 35

36 PART FOUR MANAGEMENT AND ACCOUNTABILITY OVERVIEW Management and accountability of the APG as an organisation is centred within the APG Secretariat. The Secretariat is located in Sydney, Australia and its operations and staff members are subject to Australian law. Policy formulation, membership fee collection, budget expenditure, asset management, financial audits and membership communication are all focused within the Secretariat. Under the APG Terms of Reference 2012, the APG Executive Secretary is the sole person with executive authority on behalf of the membership. Membership fees are calculated and collected by the Secretariat and expenditure of those fees is undertaken by the Secretariat in accordance with APG membership direction under annual budgets and business plans. This part summarizes the following areas: Organisation and management of the Secretariat during the financial year; APG legal status and AFP/APG hosting arrangement; Risk management and internal audits; Financial management. MANAGEMENT OF SECRETARIAT Organisation of Secretariat All staff members of the APG Secretariat are employed by the Australian government within the Australian Federal Police (AFP) for management and accountability purposes. Effective 30 June 2013 the APG Secretariat consisted of 13 staff members permanent staff and one placement (secondee) from the AFP -- as follows: 1. Executive Secretary; 2. Assistant Secretary; 3. Principal Executive Officer I; 4. Principal Executive Officer II; 5. Principal Executive Officer III; 6. Director, Technical Assistance and Training; 7. Executive Officer I; 8. Executive Officer II; 9. Policy Officer, Technical Assistance and Training; 10. Policy Officer, Corporate Support; 11. Project Officer (Australian government secondee); 12. Executive Assistant; 13. Administrative Assistant. The Secretariat is located within the structure of the AFP s Deputy Commissioner Close Operations Support for administrative purposes. Within that structure the Secretariat is required to provide an organisational chart for staff purposes (see below). Secretariat staff members are subject to the AFP Commissioner s Orders which include measures relating to employment, accountability and professional conduct. Secretariat staff performance is measured against generic AFP staff descriptions and specific APG professional criteria (as provided within the AFP/APG hosting arrangement that acknowledges the unique and separate nature of APG operations from the wider AFP). The following chart indicates the staff organisation of the Secretariat as at 30 June 2013: APG Annual Report Page 36

37 APG Secretariat Organisation 30 June 2013 Secretariat Staff Management The Secretariat is staffed with two senior executives (Executive Secretary and Assistant Secretary) together with executive level staff members and additional policy and support staff. The five core programme areas of the APG are distributed amongst senior staff members as follows: Governance and membership: Executive Secretary/Assistant Secretary Technical Assistance and Training: Director, Technical Assistance and Training Typologies and FATF s WGTM: Principal Executive Officer I Mutual evaluation programme and FATF s WGEI: Principal Executive Officer II APG s IIWG and FATF s ICRG: Principal Executive Officer III Secretariat staff members are assigned a range of other functions including conducting mutual evaluations, preparing progress reports, organising training workshops, undertaking high level visits and attending FATF and other FSRB meetings and events. These arrangements are designed to ensure that work flows are managed efficiently within existing resources. Legal Status of APG and Secretariat The APG Terms of Reference 2012 is not a formal legal instrument such as a Treaty, International Convention or Memorandum of Understanding between States Party. The APG does not qualify as an entity with distinct legal personality at international law or under Australian law, nor do its staff members qualify under Australian law for any privileges and immunities, including diplomatic, criminal or tax immunities. Given the lack of legal status by the APG and its Secretariat the APG cannot enter into contracts (including employment contracts) or other legally enforceable obligations on its own behalf. The lack of legal status for the Secretariat requires that: APG Secretariat staff members be employed by the Australian government for governance and accountability purposes across a range of areas including, financial management, employment law, and general good governance including disciplinary codes of conduct, and APG Annual Report Page 37

38 An Australian government agency or entity is able to enter into enforceable obligations on behalf of the Secretariat for the APG s organisational benefit. AFP/APG Hosting Arrangement The APG Secretariat s arrangement with the AFP for hosting of office space and administrative support is formalised within a hosting arrangement. That arrangement provides that the AFP shall provide accommodation and other support to the Secretariat at no cost to the APG membership. Support other than accommodation includes: Access to shared/common facilities; HR support/processing; Financial support/processing of accounts; Legal assistance; IT support; Maintenance of furniture and fittings; Maintenance of office equipment; and Use of the AFP library. The AFP s Governance Framework applies to the staff and administrative support operations of the Secretariat. That framework includes laws and regulations of the Australian Commonwealth including the Financial Management and Accountability Act and orders issued by the AFP Commissioner including orders relating to human resource management, staff remuneration and conditions of service as well as other fundamental management matters. Asset Management APG Funds and Financial Accountability All APG funds are defined in Australian law as Australian public funds for the purpose of the federal Financial Management and Accountability Act. The APG cannot independently administer its own funds as it is not a legal entity under Australian law. The AFP, as the APG Secretariat s Australian host agency, therefore administers those funds through AFP systems for the benefit of APG members. APG funds are held in a special Parliamentary account administered by the AFP and are subject to audit by the AFP and by external audit from the Australian National Audit Office and/or other independent auditors as may be appointed by the AFP. General and on-going audits of APG funds form part of the broader AFP audit function. APG funds therefore form part of the AFP s reporting requirements and are accounted for in the AFP s financial statements. Other Assets APG assets must be acquired in accordance with the AFP s Asset Management policy. Although limited, APG assets must be acquired though the AFP s National Procurement and Contracts Team, and include: Mobile Phones; Computer equipment (modems, USB drives; laptop computers). These assets are required to be kept in an AFP Asset Register which is audited on a regular basis. Items registered on the asset register are insured by the AFP. Any APG assets not on this register must be insured by the APG (pursuant to the AFP/APG Hosting Arrangement). Risk Management - Internal Audit The APG Secretariat falls within the AFP s broader reporting framework to the Australian government. The Secretariat is subject to internal AFP processes relating to the assessment of management and risk APG Annual Report Page 38

39 functions. In 2008 the Secretariat was subject to an independent management audit to identify the areas of risk. Additionally, the APG Secretariat is regularly examined by the AFP for business efficiencies and provided advice on areas of business improvement to assist APG members to maximise their investment in Secretariat support for their activities. APG Secretariat Staff, Sydney, Australia, July 2013 ACCOUNTABILITY FOR APG ASSETS IN Summary of Budget Outcomes for A core budget for of $1,980,112 was approved and adopted at the 2012 Annual Meeting. Below is an overview of the APG finances in the year All figures are in Australian dollars. Contributions required from members to meet the budget were calculated using the APG funding formula that calculates contributions using an 80/20 per cent combination of GDP and GDP per capita and required a minimum contribution of $7,560. As in previous years, members noted at the 2012 Annual Meeting that the core budget would not, of itself, enable the APG to complete the work outlined in the Business Plan. Members agreed therefore that voluntary contributions, continued use of accumulated assets and various streams of non-core budget funding totalling $1,003,927 should be made available in to meet the costs of the APG s agreed work programme. Total revenue from all sources was budgeted at $2,919,039. Total proposed expenditure from all streams of funding (core and non-core) was $2,984,039. The APG therefore budgeted for a deficit of $65,000 through the expenditure of previously accumulated reserves. The budget outcomes for the period 1 July 2012 to 30 June 2013, based on the audited financial reports (Annex C) are as follows: the APG commenced the financial year with a total equity of $203,103; total income for the year was $2,967,065, with $1,980,112 coming from APG members in required contributions, and $986,953 in voluntary contributions and other revenue and gains; total expenditure for the year to 30 June 2013 from all revenue sources was $2,822,732, including expenditure against the core budget, reserved expenditure, and in expenditure from other revenue APG Annual Report Page 39

40 sources (sponsorship and other funding support, including resources provided free of charge by the Secretariat s host agency, the AFP); the APG s net operating result for was a surplus of $144,333; and the APG therefore had a total equity of $347,440 as at 30 June This better-than-budgeted outcome was due to two factors: several new sources of non-core revenue were identified during the year which both reduced the call on the core budget and accumulated reserves and allowed an expansion of activity; and lower than projected expenditure on salaries (savings of approximately $187,800), due to vacancies in staff positions for part of the year pending satisfactory completion of recruitment requirements within the Australian government. External (Voluntary) Financial Support As stated in the Co-Chairs Foreword to this report a number of APG members and observers provided financial support over members fee obligations for APG business during Those members were: Australia: the remaining amount ($2,523) from a previous AusAID grant was realised as revenue in in support of staff attendance at the ADB/OECD Anti-Corruption Seminar in Vietnam. AusAID has also provided the APG with new funding of $140,639 for the period to strengthen Mongolian governance frameworks. $33,410 of this amount was realised as revenue in in support of sponsored attendees and APG staff. Additionally, Australia (AFP) provided $131,956 as a general voluntary contribution; Canada: project funding of $346,718 over 18 months (until March 2014) was provided to support the APG s ICRG-related activities, post-evaluation planning and awareness raising missions to a number of APG members and to support attendance by delegates at major APG events. $92,403 of that amount was realised as revenue by 30 June 2013; China: a voluntary contribution of $345,000 was made to fund a new senior Secretariat position for two years. The position was filled in December 2012 and $84,727 of this donation was realised as revenue in The remaining amount will fund the position until December 2014; Commonwealth Secretariat: a grant of $52,142 was provided to support regional participation in the 2012 APG Typologies and Capacity Building Workshops. $51,389 was realised as revenue in in support of sponsored attendees and APG staff to attend these workshops; India: voluntary contribution of $60,000 to fund the upgrade to the APG website. $27,270 was realized as revenue in and the remaining funds will be realized as revenue early in FY when the website upgrade is complete; New Zealand previously provided $49,734 and $54,967 for technical assistance and training activities in the Pacific and South East Asia respectively. A further $28,773 of this funding was realised as revenue to support APG missions and sponsorship of delegates to APG events. The remaining $21,623 in funding is due to be spent in Additionally, New Zealand provided $19,185 as a general voluntary contribution; Singapore: a grant of $38,595 was provided to support effective interagency and intergovernmental engagement and collaboration to implement the 2012 FATF 40 Recommendations. $26,932 was realised as revenue in in support of APG participation in various missions and the APG FATF Standards Workshop held in Singapore in March 2013; Chinese Taipei: the remaining $62,359 of a 2011 grant of $100,500 was realised as revenue in to sponsor priority delegates from the Pacific to attend various APG events. Chinese Taipei agreed in 2013 to provide a further grant of $161,000 over the two years January 2013 to December 2014 for Pacific Island APG members and observers to more effectively engage with the APG and to implement the global AML/CFT standards. $8,418 of this new grant was realised as revenue in in support of various missions; United States: provided $124,467 in June 2010 to support APG TA&T activities. A further $38,106 of this amount was realised as revenue in in support of APG FATF Standards Workshops and APG Annual Report Page 40

41 the Pacific Typologies Workshop held in Brisbane Australia in March The remaining $37,010 in funding is due to be spent in ; In Kind (Voluntary) Support Australia (AFP): provided office accommodation, essential support services (legal, HR, financial and IT) and seconded staff to the APG Secretariat during the financial year in the total attributed amount of $379,502. Budget for A core budget for of $2,037,270 was approved and adopted at the 2013 Annual Meeting -- an increase of 2.9% over the budget. APG members also approved total non-core expenditure from available reserves, voluntary funding and inkind hosting support from the AFP (as above) in the amount of $1,408,941 in , a substantial increase on equivalent expenditure in The increased voluntary funding provided by a range of donors has allowed the increase in the core budget to be minimised while at the same time supporting a wider range of activities in support of the APG s strategic and business goals for the coming year. Onsite visit to Thailand by the ICRG s Asia/Pacific Regional Review Group to determine whether Thailand should be removed from FATF monitoring. Thailand hosted the Asia/Pacific Review Group in May 2013 and was removed from ICRG monitoring by the FATF in June This onsite visit consisted of delegates from Canada, Australia, United States and Hong Kong, China as well as members of the APG and FATF Secretariats. Thailand s Minster of Justice is pictured centre right. Thailand is a founding member of the APG and hosted the regional meeting leading to the APG s formation in APG Annual Report Page 41

42 PART FIVE APG Annual Report Page 42

43 PART FIVE PROGRAMMES AND PLANS The APG Strategic Plan is the strategic operating framework for the APG s core business. The APG Annual Business Plan outlines the APG s work programme in detail for the coming next year. PRINCIPLE TASKS The APG s key tasks for include the following (some of which are dependent on external funding) are as follows: Key Meetings The following key meetings will occur in the next year: 17 th APG Annual Meeting and Annual Forum on Technical Assistance & Training will convene in Macao, China July 2014; APG Typologies Workshop and Capacity Building Seminars will be jointly held with the Eurasian Group (EAG) in Mongolia in September 2013; APG Donors and Providers (DAP) Group meeting will meet and connected with this there will be one Pacific/APG coordination meeting (APG/Pacific Islands Forum Secretariat), and one ASEAN/APG coordination meeting (APG and ASEAN Secretariats) during the year. Mongolia will host the joint APG/EAG Annual Typologies Workshop in the capital city Ulaanbaatar from 23 to 27 September This is the first joint workshop with the EAG whose Secretariat offices are based in Moscow, Russian Federation. The APG Steering Group will meet at least five times in the year to consider policy, governance, funding and membership issues and will continue to provide on-going advice to the membership and Co-Chairs. Membership Missions Up to five membership-related missions will be undertaken to members and non-members to facilitate full and active membership and promote commitment to the global AML/CFT standards. Additional missions will be undertaken with external donor funding. Participation in Global AML/CFT Network As an Associate Member of the FATF, the APG will continue to participate in three (3) FATF plenary meetings, one (1) FATF inter-sessional meeting, typologies, working group meetings, meetings of the Asia- Pacific Regional Review (RRG) Group, and up to three (3) inter-sessional meetings of the RRG. Information from FATF and other AML/CFT bodies will be communicated to members when received through , APG website and/or individual correspondence/communication. APG Secretariat will provide communications, information and liaison assistance to the RRG in further support of APG members in accordance with the APG Strategic Plan APG Annual Report Page 43

44 Preparation for 3rd Round of Evaluations APG will: a. Prepare for the 3 rd round of mutual evaluations, including assessor and pre-mutual evaluation training; complete a revised mutual evaluation schedule; and establish of a Mutual Evaluation Working Group as a successor to the informal Ad Hoc Working Group on FATF standards. b. Develop and deliver one (1) assessor training workshop under the new FATF assessment methodology in preparation for the APG s 3rd round of evaluations. c. Develop and deliver one (1) regional workshop in late 2013 for APG members to be assessed in followed by pre-mutual evaluation visits to two (2) APG members. d. Commence preparations for on-site mutual evaluation visits in the second half of APG will participate in the FATF evaluation of Norway in 2014 and will continue to implement the 2 nd round mutual evaluation followup procedures, including preparation of detailed analyses of progress by selected members for the 2014 Annual Meeting. Mutual Evaluation/FATF Standards Training The APG will: a. Contribute to preparation of FATF standards/assessment methodology training materials. b. Review the FATF rules relating to mutual evaluation followup and the ICRG as a consequence of the new standards. c. In addition to the APG assessor training and pre-mutual evaluation workshops, the APG will conduct a workshop on the new FATF standards and assessment methodology in August d. Participate in an IMF workshop on the FATF standards in The APG Secretariat is planning training in under the FATF s new assessment methodology. All assessors must undergo new training to participate as experts in the APG s 3 rd round of evaluations. August 2013, a pilot FATF assessor training workshop in Paris in September 2013 and a World Bank assessor training workshop in Washington DC in September e. Deliver an assessment methodology workshop for DAP group members in December 2013, and f. Organise an assessor training workshop for Pacific members in early Typologies Research APG will continue to support the typologies business framework, organise and convene the Typologies Working Group and closely collaborate with the FATF Typologies Working Group including supporting the FATF Typologies Working Group, contributing to FATF projects and participating in FATF activities directly relevant to APG business. APG will collaborate closely with the EAG Typologies WG. Available at The APG Typologies WG will pursue a number of priority projects as recommended by the APG Typologies Working Group in July 2013 and started during The 2013 joint APG/EAG Typologies Workshop will be held in September 2013, hosted by Mongolia. The workshop will focus on a range of ML and TF methods. The agenda will be confirmed by the APG Working Group during July 2013 and the sessions confirmed prior to the workshop. The APG Typologies Working Group will prepare in-depth studies and regional overviews of typologies for adoption and publication by the APG plenary in July APG Annual Report Page 44

45 The APG will continue to support regional training initiatives, led by donors and providers, by building upon relevant typologies work. Implementation Assistance/ICRG Missions The APG will provide priority assistance and support for APG members involved in the FATF s ICRG process, including participation at Asia-Pacific RRG meetings, ICRG meetings, information briefings, supply of information and interpretative materials, implementation assistance and coordination of TA&T. APG will conduct up fifteen (15) ICRG-related assistance missions to APG members under ICRG review. These may be in conjunction with other visits. APG will conduct one workshop for NPOs (private sector) on the risks of terrorist financing in the not-forprofit sector as part of the APG s mission to engage directly with the private sector, and as an outcome of the UN s global NPO project completed March APG Implementation Issues Working Group (IIWG) will assist members to develop sustainable strategies to meet mutual evaluation report recommendations and will: Finalise the amendments to the SIP Framework for consistency with the revised FATF standards and new assessment methodology. Work on a project to identify and document implementation lessons from members experience in prosecuting and sanctioning the ML offence. Continue to develop an implementation resource library reflecting APG members implementation experiences. APG delegates from Pacific Island FIUs in attendance at the Pacific Typologies Workshop in Brisbane Australia, March A number of regional AML/CFT TA&T projects will be considered in collaboration with DAP Group members for legal, financial, FIU and law enforcement sectors. The APG Secretariat will support existing mechanisms APG Annual Report Page 45

46 with the Pacific Island Forum Secretariat and the ASEAN Secretariat, and will continue efforts to establish greater cooperation with a South Asian body, e.g., South Asian Association for Regional Cooperation. The APG Secretariat will also collaborate with DAP Group members and recipient member jurisdictions to develop, coordinate and deliver AML/CFT-specific programmes, including: Regional programmes to build AML/CFT capacity amongst AML/CFT supervisors and regulators. Regional enforcement and prosecution capacity building programmes focusing on targeting policy responses to proceeds of crime. AML/CFT implementation programmes. APG Resources The financial resources required to achieve these programmes and plans for extend beyond members core contributions to include additional financial resources, as well as human and technical resources. Many technical assistance missions and visits to members rely on voluntary funding and on participation by individual member experts. The APG will continue in the coming year to seek additional resources from members and observers to assist in meeting our strategic objectives. The current APG Secretariat personnel resources include 11 full-time staff members, one (1) part-time staff member, and one (1) part-time secondee from the Australian Federal Police (13 in total) as outlined in Part IV. The Secretariat continues to review the level of staff resources in order to meet operational activities of the APG. As work demands increase (in part resulting from an unexpected delay in the commencement of the 3 rd round mutual evaluation programme as noted above) the membership will be informed of the possible need for additional resources to meet these burdens. APG Annual Report Page 46

47 ATTACHMENTS APG Annual Report Page 47

48 Audit Report of Moore Stephens 12 September 2013 APG Financial Statements APG Annual Report Page 48

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