The Egmont Group - An International FIU Network

As per the above definition, the FIU is responsible for receiving, analyzing and disseminating to other government authorities - in particular law enforcement investigatory agencies and criminal prosecutorial authorities - the financial information that has been reported by financial institutions for AML/CFT purposes. There are different models under which an FIU can be incorporated within the governmental structure of a particular jurisdiction. The most common, and the form of my agency, FinCEN, is the "Administrative Model." "The Administrative Model is a centralized, independent, administrative authority, which receives and processes information from the financial sector and transmits disclosures to judicial or law enforcement authorities for prosecution. It functions as a 'buffer' between the financial and the law enforcement communities."²⁸ Many administrative FIUs are situated within the government framework of the finance ministry or central bank, particularly where the central bank also retains supervisory functions.

The next most common model is the "Law Enforcement Model [which] implements anti-money laundering methods alongside already existing law enforcement systems, supporting the efforts of multiple law enforcement or judicial authorities with concurrent or sometimes competing jurisdictional authority to investigate money laundering."²⁹ Additionally, there are judicial and hybrid models. The point to be stressed, however, is that each jurisdiction must have a single government agency to carry out the responsibilities with respect to information exchange with FIU counterparts from other jurisdictions.

The Egmont Group has grown considerably from its first gathering in June 1995, as the FIUs increasingly focused on nurturing the exchange of information available within their respective countries. In its Statement of Purpose, adopted at the fifth plenary meeting in 1997, the Egmont Group agreed to pursue among its priorities the stimulation of information exchange and to overcome the obstacles preventing cross-border information sharing. In the Principles for Information Exchange adopted in 2001, the Egmont Group stated, inter alia:

• FIUs should be able to exchange information freely with other FIUs on the basis of reciprocity or mutual agreement and consistent with procedures understood by the requested and the requesting party. Such exchange, either upon request or spontaneously, should produce any available information that may be relevant to an analysis or investigation of financial transactions and other relevant information and the persons or companies involved.³⁰

The membership continued to focus on progress on the legal and practical aspects of promoting information exchange, as exhibited in the 2004 Best Practices for the Exchange of Information Between Financial Intelligence Units.³¹ They focused on the development of standard Memoranda of Understanding, which albeit is non-binding as a matter of law, formalized the importance of reciprocity of treatment. Among the resources they created was the Egmont Secure Web, a secure internet-based mechanism (hosted by FinCEN) for the exchange and communication of sensitive information. Similar systems are now being developed, such as FIU.Net, for use among the EU Member State FIUs. The Egmont Group is working in collaboration with this system in order to maximize information sharing.

The de facto recognition of the initial success and potential for the FIU model of information sharing came to be reflected in the international financial standards mentioned above. For example, as the attention turned to this newly defined need for an FIU five years ago, the IMF undertook a review, the purpose of which was "to respond to the need for information on FIUs."³¹ The IMF concluded:

• FIUs are an essential component of the international fight against money laundering, the financing of terrorism, and related crime. Their ability to transform data into financial intelligence is a key element in the fight against money laundering and the financing of terrorism. The place of FIUs is now well established in the arsenal of measures to combat these serious crimes.³³

In addition to the 2003 FATF Recommendation 26 specifically calling for each country to create an FIU, the Interpretative Note to Recommendation 26 states:

• Where a country has created an FIU, it should consider applying for membership in the Egmont Group. Countries should have regard to the Egmont Group Statement of Purpose, and its Principles for Information Exchange Between Financial Intelligence Units for Money Laundering Cases. These documents set out important guidance concerning the role and functions of FIUs, and the mechanisms for exchanging information between FIU.

Moreover, the 2003 FATF Recommendations were significantly revised to focus on international information sharing among competent authorities including FIUs, specifically in Recommendation 40:

• Countries should ensure that their competent authorities provide the widest possible range of international co-operation to their foreign counterparts. There should be clear and effective gateways to facilitate the prompt and constructive exchange directly between counterparts, either spontaneously or upon request, of information relating to both money laundering and the underlying predicate offences. Exchanges should be permitted without unduly restrictive conditions. . . . ³⁴

In 2007, membership in the Egmont Group had grown to 106 members, reflecting the dramatic increase in the number of jurisdictions from which either newly established or significantly enhanced agencies have sought recognition of their operational status as financial intelligence units. The informal model of coordination had also become increasingly unwieldy. For that reason, the members decided to establish a more formal structure.

At the 2007 plenary, the member FIUs adopted a Charter which states the following as the "Objectives of the Egmont Group":

• The goal of the Egmont Group is to provide a forum for FIUs around the world to improve co-operation in the fight against money laundering and financing of terrorism and to foster the implementation of domestic programs in this field. This support includes:

• expanding and systematizing international co-operation in the reciprocal exchange of information;
• increasing the effectiveness of FIUs by offering training and promoting personnel exchanges to improve the expertise and capabilities of personnel employed by FIUs;
• fostering better and secure communication among FIUs through the application of technology, such as the Egmont Secure Web (ESW);
• fostering increased coordination and support among the operational divisions of member FIUs; and
• promoting the establishment of FIUs in conjunction with jurisdictions with an AML/CFT program in place or in areas with a program in the early stages of development.

The Egmont Group also created a permanent Secretariat located in Toronto, Canada, on the basis of a host arrangement of the Government of Canada granting the Secretariat and its officials privileges and immunities.

Supported by the permanent Secretariat, the Egmont Group Charter has now institutionalized the working framework for its membership. The Egmont Committee, a group of 14 members, is an intermediary group between the 106 Heads of member FIUs and the five Egmont Working Groups. This Committee addresses the administrative and operational issues facing Egmont and is comprised of seven permanent members and seven regional representatives based on continental groupings (i.e., Asia, Europe, the Americas, Africa and Oceania). Egmont's five Working Groups are broken down into Legal, Operational, Training, Information Technology and Outreach (responsible for potential candidate FIUs).