III EAG consultations with private sector

On December 16, 2008 as part of the 9th EAG Plenary the consultations with the private sector were held.

They were dedicated to assessing ML/TF risks under the current conditions of financial instability and elaboration of the relevant recommendations for EAG member states. Particular attention was paid to the risks of increasing cross-border money flows as well as penetration of criminal proceeds into the financial system and spread of alternative money transfers remittance.

In particular the following financial sector vulnerabilities of the Eurasian region were identified:

• The lack of liquidity in the banking sector poses increased risks when the amount of monitored cashless transaction decreases in favor of less monitored settlements with the use of cash.
• As the cost of financial services increases, an upward trend is observed in the price-rates for electronic wire transfers which are used by persons temporarily residing in the EAG member states. This fact makes alternative remittance systems more attractive for natural persons.
• National financial systems face intense capital flight. In the circumstances of a liquidity lack, there are increasing risks of incoming criminal proceeds.

As a result of the consultations special recommendations were formed by the EAG to the private sector institutions of the region.