OSCE holds meeting in Kyiv on misuse of new payment methods for money laundering

KYIV, 8 September 2011 – Fighting the laundering of criminal profits through new payment methods was the focus of a roundtable meeting organized by the OSCE in Kyiv today. 

More than 60 participants from Eastern and South Eastern Europe representing financial intelligence units (FIUs), national banks, the judiciary and police authorities took stock of the current use of new payment methods for criminal purposes. They discussed existing payment systems, focusing in particular on electronic money (including prepaid stored value cards), alternative remittance systems and mass cash payment systems, and discussed ways of preventing the abuse of these systems for money-laundering purposes.

Alexey Stukalo, the Head of Economic Activities of the Office of the Co-ordinator of OSCE Economic and Environmental Activities, said: “In recent years specialized international and national bodies have identified a growing number of cases where new payment methods were abused by criminals for money laundering and terrorist financing purposes. For example, prepaid cards are often used by drug dealers. This represents a serious threat to security in the OSCE region which needs to be addressed by governments, the private sector and international organizations.”

Oleksiy Feshchenko, the First Deputy Head of the State Financial Monitoring Service of Ukraine said: “New payment methods are an integral part of the financial system and should be adequately regulated and supervised to reduce the risk that they may be abused by criminals. FIUs should use modern analytical techniques and reports from traditional financial institutions to detect cases of such abuse.”

Participants identified challenges in adopting and fully implementing appropriate national legislation and regulatory frameworks to counter the laundering of the proceeds of crime through new payment methods and made recommendations for further action at the national and regional level.

The event follows a regional seminar on 6-7 September on seizing and recovering the proceeds of drugs and crime organized  by the OSCE’s Strategic Police Matters Unit and the State Financial Monitoring Service of Ukraine with the support of the Office of the Co-ordinator of OSCE Economic and Environmental Activities.