July 2007 Report on Greece

Potential Developments

GREECE (July 6): On the initiative of Mr Nicholas C. Garganas, Governor of the Bank of Greece, the Governors of Central Banks of Albania, Bulgaria, Cyprus, Former Yugoslav Republic of Macedonia, Greece, Romania and Serbia met in Athens on 6 July 2007, with a view to agree on a new framework of enhancing regional co-operation in the area of banking supervision. Against the background of a constantly rising number of cross-border banking institutions in South Eastern Europe, the Governors discussed and agreed on a multilateral Memorandum of Understanding that defines the areas and terms of co-operation among banking supervisory authorities in the region, while being in line with the existing regulatory and supervisory legal regimes in each country. The Governors also discussed an action programme to facilitate and support the implementation of the new co-operation framework. The envisaged new co-operation framework would help ensure a more structured form of co-operation and allow banking supervisors to cope more effectively with the increasingly complex banking institutions, thereby contributing to financial stability in the region. The new framework would also help alleviate the administrative burden on the banks stemming from regulatory and reporting requirements. In its design and implementation, the Governors agreed to draw on the evolving experience with the corresponding EU framework and on the principles of the Basle Committee on Banking Supervision. The Governors also decided to broaden the range of the regularly exchanged information in the area of banking supervision, to set up communication networks among the supervisory authorities in the region and to establish working groups to explore the potential for convergence of regulatory and supervisory practices, including those that aim at curbing money laundering and the financing of terrorism. The Governors agreed to explore the possibility of participation in the new co­operation framework also of the supervisory authorities of other countries, who are responsible for banking groups operating in South Eastern Europe.

Source: Bank of Greece

Anti-Money Laundering

GREECE (July 5): The Financial Action Task Force (FA TF) has completed an assessment of the implementation of anti-money laundering and counter-terrorist financing standards in Greece. Among its major findings were: In general, it appears that the money laundering offence is not effectively implemented. The criminalisation of terrorist financing is very recent (July 2004) and there have been no TF cases as yet; the provisions in relation to confiscation of criminal proceeds do not fully comply with the international standards; the Greek FlU has been assigned extensive powers and responsibilities; however, there are serious doubts about the current structure and capacity of the unit to properly perform its tasks and functions, in particular the traditional core functions of an FlU. The powers and capacity of the law enforcement services are generally sound; the preventive system that deals with customer identification is generally insufficient and not in line with the international standards; the total number of suspicious transactions reports appears low, with virtually none from outside the banking sector; there are deficiencies in AMLjCFT supervision in the banking area and, to a more severe extent, in the securities sector. Measures are non-existent in the insurance sector; Greece needs to put comprehensive AMLjCFT obligations into place for DNFBPs in order to comply with the FA TF standards; Greece has a sufficient framework for providing international co-operation and is able to do so broadly, although certain limitations in the coverage of the money laundering and terrorist financing offences could provide a technical limitation to such assistance.

Source: Financial Action Task Force
Impact: Update Anti-Money Laundering

(Posting date 16 July 2007)

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