Parliament yesterday passed legislation on anti-money laundering and combating the financing of terrorism (AML/CFT) following review by the national security committee.
All 53 MPs in attendance at yesterday’s sitting voted in favour of passing the bill.
Presenting the committee report (Dhivehi) to the Majlis floor, MP ‘Reeko’ Moosa Manik, chair of the national security committee, explained that the legislation introduces rules governing financial transactions and the inflow and outflow of money from the Maldives.
The bill will also address the persisting dollar shortage, the foreign currency black market, and counterfeiting of dollars, Moosa added.
Moreover, a limit would be placed on the amount of cash that can be taken out of the country, which has to be declared to customs, the opposition Maldivian Democratic Party MP said.
The new law would also benefit investors as it would inspire confidence in the legal system and offer security to foreign investments, Moosa said.
In the ensuing debate, Jumhooree Party Leader Gasim Ibrahim contended that the parallel market for dollars sprang up as a result of the Maldives Monetary Authority (MMA) not allowing the price of dollars to fluctuate.
Gasim suggested that the economy suffered adverse effects due to discrepancies between monetary and fiscal policy.
Moosa noted that noted that a high-level delegation from the Asia/Pacific Group on Money Laundering (APG) had urged MPs to expedite the passage of the legislation.
MPs were warned of “negative consequences” such as restrictions in conducting international financial transactions and credit card transactions as well as transferring money to overseas bank accounts should the bill not be passed before June.
In a meeting with committee members in February, APG Co-chair Andrew Colvin warned that the organisation along with the Financial Action Task Force (FATF) “would be left with little option but to take certain measures that would be negative for the Maldives” should the legislation not be passed.
APG Executive Secretary Dr Gordon Hook noted that implementing AML/CFT laws was “an obligation that the Maldives undertook voluntarily when you joined the APG in 2008″ as a condition of membership.
“There are 41 countries in the APG. They include every country in the Asia/Pacific region with the exception of North Korea and three tiny Pacific states. Among those 41 countries of which Maldives is a member, you are the only country without a comprehensive AML/CFT framework,” he observed.
The anti-money laundering bill was submitted to parliament in late 2013 and sent to the national security committee for further review.
The absence of legislation “makes Maldives very vulnerable to money laundering and terrorist financing,” Dr Hook said.
He added that the vulnerabilities were identified by the International Monetary Fund (IMF) in a report prepared in 2011.
MMA Assistant Governor Neeza Imad meanwhile told MPs that the Maldives received a very low rating in an assessment by the APG in 2011, after which the central bank began drafting legislation on AML/CFT.
Technical assistance was provided by the APG and the IMF, she noted.
Countries that are listed by the APG for non-compliance with its standards on AML/CFT face “hindrances” in securing foreign direct investment, opening accounts overseas, and conducting international financial transactions, Neeza said.