Egmont Group

To enable better communication between Financial Intelligence Units (FIUs) and speed up efforts against money laundering and terrorist financing, the Egmont Group was founded in 1995. National agencies like the Belgium Financial Intelligence Processing Unit (CTIF-CFI) and the Financial Crimes Enforcement Network (FinCEN) were pioneers of the Egmont Group. Today, it comprises more than 150 members across the globe, including FINTRAC and UKFIU as well. 

What is the Egmont Group?

The Egmont Group is an international organization working towards advancing anti-money laundering efforts to help countries achieve a global agenda of mitigating financial crime. The forum created with the purpose of streamlining information sharing between FIUs was established in Brussels and is currently headquartered in Toronto, Canada. With exactly 159 member FIUs, it emphasizes and facilitates the worldwide cooperation of intelligence sharing units, keeping intact AML/CFT compliance and other binding standards. 

What does the Egmont Group of FIUs do?

The members of the Egmont Group are crime prevention networks working towards the collection and analysis of financial information. This allows organizations to prevent possible instances of money laundering and terrorist financing by reporting it to the relevant regulatory authorities. The jurisdiction of these intelligence units are not just limited to providing essential information, but they can also carry out organized money laundering investigations extending on an international level if required. Egmont Group makes sure FIUs conduct secure and transparent sharing of information in light of globally acclaimed policies and procedures of Anti Money Laundering and counter-terrorist financing. 

Egmont Group and the FATF

The Egmont Group works closely with member countries and their representative bodies through conducting committee and working group meetings. The Financial Action Task Force (FATF) plays a key role in devising international initiatives and decisions. The joint list for Trade-based money laundering (TBML), developed by Egmont Group and the FATF, lists risk indicators to help domestic and global authorities to identify potential misinterpretation of trade agreements, their prices or quantity of items/goods. The risk indicators chalked out by EG-FATF are listed below:

Structural Risk Indicators

The structural risks associated with falsely set up trade entities and shell corporations correspond to businesses based in high-risk jurisdictions, lacking online presence & regular payroll transactions, and exhibiting unusual periods of dormancy. 

Trade Activity Risk Indicators

Carrying out illegitimate trade activities such as counterfeiting, trafficking, and smuggling, etc. Inconsistent trade activity and establishing ties with numerous third parties leading to unconventional business practices are also potential risks. 

Commodity and Trade Document Risk Indicators

Inconsistent trade documents (invoices, contracts and corporation papers), absence of supporting transactional data, and routing of commodities through various jurisdictions without proper certification. Mismatches in payment receipts and complex trade imports are other indicators. 

Transaction Activity and Account-based Indicators 

Some of these risk indicators include uninformed payment changes, a relatively higher number of transactions from a single account, routed payments in a circle, and frequent cash deposits to offshore accounts. 

What are Parts of the Egmont Group?

Technical Assistance and Training Working Group (TATWG)

This TATWG aims at providing worldwide technical assistance to members and conducts training programs with other related organizations. Through conducting regional and global awareness campaigns and seminars, the training group of Egmont creates better opportunities for financial intelligence units to understand AML/CFT obligations and FATF’s 40 Recommendations. 

Membership, Support, and Compliance Working Group (MSCWG)

This unit handles all membership-related concerns across regional and candidate FIUs. It is also responsible for ensuring compliance standards endorsed by the Heads of FIUs in the Egmont Group Support and Compliance Process. Ensuring cooperation between intelligence units for better compliance management is also the duty of MSCWG. 

Information Exchange on ML/TF Working Group (IEWG)

The IEWG is assigned the task of analyzing and addressing information-sharing challenges across financial intelligence units. To better assist operational analysts and IT support experts, the IEWG focuses on increasing the nature and credibility of financial data through timely sharing of information across members and observer organizations. 

Policy and Procedures Working Group (PPWG)

The PPWG identifies concerns related to the essential implementation of policy and procedures across member FIUs. This part of the Egmont Group stresses the importance of strategic, operational, and policy-related concerns and coordinates these responses across partner entities. PPWG ensures that Egmont Group documents are frequently reviewed to keep policy and legal frameworks up to date. 

Suggested Reads:

CFT & AML Compliance To Hold Back Financial Crimes
40 recommendations of FATF – Shaping the future of your business