Program: Technical Assistance for Anti-Money Laundering and Countering the Financing of Terrorism in Ethiopia

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1 Strengthening AML/CFT Capacities in Ethiopia Final Report January 2015 Program: Technical Assistance for Anti-Money Laundering and Countering the Financing of Terrorism in Ethiopia Program Manager: Global Center on Cooperative Security (Global Center) 747 Third Avenue 4 th Floor New York, NY USA Reporting period: September 2014 December 2014 Project Duration: May 2013 December Quarterly Report Summary 2. Program Support to the FIC a. Training and Technical Assistance i. Training: Multi-Faceted Role of the FIC, October 2014 ii. Training: Advanced Development of Standard Operating Procedures, October 2014 iii. Training: Advanced Financial Intelligence Training II, December 2014 iv. Scheduled Training: Frozen Asset Management and Seizure, January 2015 b. Stakeholder Engagement and External Awareness i. Finalization of Knowledge Products for Publication ii. Third Assessment Report iii. Regional Trainings in Collaboration with the MoJ: Bahir Dar, Mekelle c. Professional Associations and Collaborations i. FIU Site Visit: Mauritius ii. 3. Program Support to the MoJ a. Implementation of Awareness Raising Plan b. Manual Development 4. Political Developments and Analysis a. FATF Public Statement October 2014 b. Personnel Changes 5. Summary of Final Project Outputs and Outcomes: FIC Workstream a. Training and ongoing technical assistance for FIC staff on core FIU functions b. Strengthening the FIC s analytical toolbox c. Training and raising awareness of prioritized reporting entities and the wider public, and developing FIC external relations capacity d. Inter-agency cooperation and knowledge-sharing as well as awareness raising in the government sector 1

2 6. Summary of Final Project Outputs and Outcomes: MoJ Workstream a. Assessment of existing training materials and preparation of additional materials for incorporation into the MoJ s final training manuals b. Technical support for MoJ-sponsored practitioner field trainings on investigating and prosecuting money laundering and terrorist financing offences c. Support the MoJ in raising public awareness of AML/CFT 7. Lessons Learned and Sustaining Progress in the Future Program support starting date: June 2013 Completion date (expected): December 2013 (for assistance to the MoJ) extended through 2014 on one component: Awareness Raising and Outreach December 2014 (for assistance to the FIC) Previous reports: Inception Report June 2013 Quarterly Report October 2013 Quarterly Report December 2013 Quarterly Report June 2014 Quarterly Report September Quarterly Report Summary In the final quarter, the project continued to meet programmatic and budgetary goals as expected and did so in coordination with the Danish Embassy in Addis Ababa. Activities undertaken for both the Financial Intelligence Center (FIC) and Ministry of Justice (MoJ) workstreams have demonstrated progress in the reporting period;; however implementation of the MoJ s awareness raising plan continued to be limited. A summary of project updates discussed in this report are presented by component below. FIC Component 1 Training and Ongoing Technical Assistance: Three successful trainings were delivered for FIC staff and relevant stakeholders during the reporting period of September through December On October, a project consultant from the Mauritius Financial Intelligence Unit delivered training on the multi-faceted role of the FIC and also facilitated a workshop to further develop and refine the FIC s standard operating procedures. In December, an interactive three-day training session was held on advanced financial intelligence titled Advanced Financial Intelligence II. Due to scheduling constraints, an additional training on the procedures for asset seizure and frozen asset management was postponed until January FIC Components 2 & 4 Strengthening the FIC s Analytical Toolbox & Interagency Cooperation: Ethiopia has made substantial progress in strengthening formal and informal interagency relationships, building awareness among key stakeholders, and enhancing the FIC s analytical capacities. Local project partners have developed written knowledge products on anti-money laundering and countering the financing of terrorism (AML/CFT) issues within the Ethiopian context, including advocating for enhanced attention and collaboration on these issues from academia, law enforcement, and non-profit organizations. The December training on advanced financial intelligence included colleagues from the FIC, MoJ, Federal Police Commission (FPC), 2

3 Ethiopian Revenues and Customs Authority (ERCA), and Federal Ethics and Anti-Corruption Commission (FEACC). A number of interactive group activities enabled participants to engage, network and share knowledge regarding their respective roles and opportunities for interagency cooperation in the handling of AML/CFT cases. These trainings continue to offer an excellent venue for facilitating cooperation and building relationships between departments and Ministries; and the Project Team has observed increasing interaction between counterparts across agencies within Ethiopia. The Project Team continued to facilitate technical assistance and mentorship to the FIC. The Team also remained in regular communication with SØIK, the World Bank, and UNODC to ensure that there was no duplication of efforts and to coordinate programming calendars to avoid overlap. FIC Component 3 External Awareness and Relations: At the regional level, a four-person Ethiopian delegation participated in an on-site information sharing and IT system familiarization visit to the Financial Intelligence Centre in Mauritius on December The visit was designed to provide strategic guidance and share experiences related to information system architecture, database creation and management, and IT software selection. In collaboration with the MoJ, the FIC also facilitated regional trainings in Mekelle and Bahir Dar to raise awareness of AML/CFT issues and strengthen the implementation of AML/CFT practices in rural regions outside Addis Ababa. The Project Team also continued work with Mr. Tu emay Aregawi Desta to draft the Third Assessment Report on Ethiopian AML/CFT progress. MoJ Component 1 Assisting in the Development of the MoJ s Final Training Materials: The Project Team encountered significant delays in the production and finalization of the MoJ training manual. The Team received feedback from the MoJ review committee regarding the structuring and inclusion of Ethiopian-specific context into the manual draft, along with a revised version shared with MoJ colleagues. The Project Team has indicated that this version remains a working document to be further refined and advanced by the MoJ. MoJ Component 2 Assisting in the design and delivery of MoJ-sponsored trainings: The MoJ previously delivered regional trainings in the Benishangul, Jijiga, and Gambella regions. Planning is underway for a training in the Afar region in the northeast, as well as in Addis Ababa. The Addis Ababa training will include senior leadership from the FIC and serve as the closing session for the training series. MoJ Component 3 Assisting in the Design and Implementation of an AML/CFT Awareness Raising and Outreach Strategy: An awareness raising strategy has been formulated and formally accepted by the Ministry of Justice. Some progress has been made toward implementation of individual action items, but continues to be slow overall. The following pages in this report focus on the main activities undertaken during this reporting period and provide a summary of final project outputs and outcomes. It closes with a financial summary. The Program Manager remains available for any follow-up discussions or updates as needed by the Embassy of Denmark in Addis Ababa. 3

4 2. Program Support to the FIC a. Training and Technical Assistance Provision i. Training: The Multi-Faceted Role of the FIC Ethiopian FIC staff participated in a training on the multi-faceted role of financial intelligence units in strengthening the country s AML/CFT capacities, held in Addis Ababa on October Presentations focused on the role of the FIC in issuing guidelines for implementation to reporting entities, monitoring compliance, record keeping and information management, as well as the importance of international exchanges of information through regional organizations such as the Egmont Group. Participants were actively engaged through the use of interactive case studies, and feedback from training evaluations indicated that all participants felt they had greatly enhanced their level of understanding related to these topics and would be able to utilize this information in their jobs. In particularly, participants indicated they had greatly enhanced their knowledge on matters related to issuing guidelines and monitoring compliance from reporting entities. Key highlights from the training evaluations are included below: All of the participants were satisfied with the training subject and content, with 82% indicating they were happy or very happy. All of the participants reported that the training increased their understanding of new payment products and service, and all of the participants indicated they would be able to use this knowledge in their job. o Participants felt they gained the most information on issuing guidelines for compliance by the FIC, with all participants ranking their knowledge level at 4 or 5 on a 1-5 scale. o Another area of significant growth was in compliance monitoring. Following the training, 82% ranked their knowledge level at 4 or 5, and no participants ranked lower than 3. ii. Training: Advanced Development for Standard Operating Procedures for Financial Intelligence On October, fifteen staff members from the FIC participated in a workshop on advanced development of standard operating procedures for financial intelligence in Addis Ababa. The workshop included presentations by staff from the FIU Mauritius on best practices for standard operating procedures in the areas of intake and receipt, advanced data analysis and information technology, and dissemination practices. Ms. Fetlework Gebre Egziabher Abrha, Deputy Director General of the FIC, served as co-facilitator and provided local insight to ensure that the best practices were adapted and tailored to the Ethiopian AML/CFT landscape. Participants were actively engaged throughout the training, and feedback from training evaluations indicated that participants felt the workshop was useful in advancing the development of the FIC s 4

5 standard operating procedures and the concepts they had learned would be utilized in their current positions. Key highlights from the training evaluations are included below: All of the participants were satisfied with the training subject and content, with 88% indicating they were happy or very happy. All the participants reported that the training increased their understanding of standard operating procedures, and all of the participants indicated they would be able to use this knowledge in their job. o Dissemination and information technology were the primary specific topics listed as most interesting and relevant to their jobs. o 75% of participants indicated that they would revise current SOPs or draft new ones in response to lessons learned at the training. iii. Training: Advanced Financial Intelligence Training II On 3-5 December 2014, a three-day training was held on advanced financial intelligence to over 20 representatives from the FIC, MoJ, FPC, ERCA, and FEACC in Addis Ababa, Ethiopia. Topics covered during this training included operational financial intelligence analysis, internet fraud and cybercrime, SWIFT, bankruptcy fraud, and analysis targeting. Over the course of the three days, trainees participated in a number of group exercises, on topics such as deductive logic, evaluation of sources, document and information management, how to determine whether a transaction is suspicious, and good practices in reading suspicious transaction reports (STRs). Trainers supplemented the training with examples of Danish practices within the FIU, and encouraged participants to translate these instances to the Ethiopian context. The training was an important step in fostering communication and collaboration between agencies on financial intelligence, and delineating roles and responsibilities related to AML/CFT. Feedback from the trainings was highly positive and key highlights from the training evaluations are included below: All of the participants were satisfied with the training content, with 94% indicating they were happy or very happy. All the participants reported that the training increased their understanding of financial intelligence, and all of the participants indicated they would be able to use this knowledge in their job. 94% of participants ranked their knowledge level on the financial intelligence analytical process, methods for evaluating information, and best practices for developing hypothesis and inferences as a 4 or 5 on a scale of 1-5 following the training. Feedback on the group work was highly positive, with participants indicating the activities were interesting, engaging and helped them to learn from their peers. 5

6 b. Stakeholder Engagement and External Awareness i. Finalization of Knowledge Products for Publication In order to raise awareness and institutionalize knowledge, the Project Team partnered with a number of local and international experts to produce written documents addressing the various components of AML/CFT within the Ethiopian and/or East African context. The Project Team has provided feedback and guidance to local experts in the finalization of these pieces. Some of these articles have been published on the Global Center website or shared with the FIC, and placement of the remaining articles will be determined based on buy-in and guidance from the FIC and MoJ. Forex and Remittances Role of Public and Private Banks AML/CFT Guidelines for DNFBPs Practices for Law Enforcement, FIUs and Customs FIC Communication Strategy Potential for Charity Abuse for ML/TF Purposes Comparative Assessment of Proclamation 780 Role of Graduate Schools in AML/CFT Confiscation Under AML/CFT Law ii. Third Assessment Report Building upon the Second Assessment Report published February 2013, Mr. Tu emay Aregawi Desta partnered with Mr. Biniam Shiferaw Ayalew to conduct an updated research study and assessment of the AML/CFT regime in Ethiopia. The authors met with relevant AML/CFT stakeholders and produced an initial draft in December 2014 for feedback and guidance from the Project Team. This report includes key statistics from the FIC, highlights the advancements made by the Ethiopian AML/CFT regime, and indicates potential areas for continued intervention. This report is currently being edited and will be published on the Global Center website. A copy of the report will be shared with the Embassy of Denmark once it has been finalized. iii. Regional Trainings in Collaboration with the MoJ On 25 and 30 December 2014, the FIC and MoJ collaborated on regional trainings in the city of Bahir Dar in north-western Amhara Region and Mekelle in the northern Tigray Region. Trainings included expert presentations and actively engaged participants in group discussions which were facilitated to raise awareness of AML/CFT issues and strengthen the implementation of AML/CFT measures in rural regions. These trainings were part of a series of trainings designed to spread knowledge outside of the capital. Previously the FIC and MoJ had facilitated successful trainings in Adama in the central Oromia region and Awasa on the shore of Lake Awasa in the Great Rift Valley. 6

7 c. Professional Associations and Collaborations i. FIU Site Visit at Financial Intelligence Unit, Mauritius On December, a four-person delegation from the Ethiopian FIC conducted an on-site information sharing visit with substantive staff members from the FIU Mauritius. The goal of the visit was to better familiarize themselves with the day-to-day operations of a well-established peer FIU, with a focus on building capacities beyond the deficiencies that had been emphasized in previous FATF Public Statements. These identified areas include the continued refinement of best practices for implementation of standard operating procedures, development of guidelines for designated non-financial businesses and professions (DNFBPs), and a highly technical training on IT systems and database management to assist in the selection and implementation of AML software. The FIU Mauritius has demonstrated high levels of capacity in these areas and is familiar with the Ethiopian context due to involvement in previous trainings. The visit provided the Ethiopian staff with the opportunity to witness these concepts in practice at a well-established FIU, which helped advance their understanding of the implementation needs or challenges they may face as they move forward. The FIU Mauritius prepared and distributed hard and soft copies of all training materials for the FIC to keep on file, including documents that might not otherwise be made public. This will allow for an FIC-wide dissemination of the information learned, as the materials have been shared upon the delegation s return and will be included in orientation materials for future FIC staff. This visit also provides a key training opportunity for the delegation members, building a train the trainer model that will help ensure the sustainability of the work and further build the institutional memory of the FIC as it looks to grow and expand its human and technical capacities. ii. Annotated Review of Guidelines for DNFBPs Designated non-financial businesses and professions (DNFBPs) have been identified as vulnerable to ML and TF abuse in Ethiopia, due in part to low levels of awareness among stakeholders. As a regulatory authority, the FIC is drafting a directive for DNFBPs related to AML/CFT compliance. A strategic project consultant reviewed the initial draft with senior leadership from the FIC to provide assistance in further refining and strengthening the directive in line with international standards. Program Support to the MoJ a. Implementation of Awareness Raising Plan The updated awareness raising strategy was signed and formally accepted in mid-2014, but implementation has been limited. There has been minimal progress on the development of public awareness brochures and the journal publication. Additional complications have arisen with regards to updating the MoJ website, as the project would require the contacting of an outside vendor by the Information and Communication Technology (ICT) Department within the MoJ. To date, three radio programs have been aired on Radio Fana Broadcasting focused on ML, TF, and asset freezing. Contract negotiations had been underway for the production of two TV programs to air on the preexisting legal program, Amicus ;; however the MoJ has reported that they have been unable to finalize this program as funding was inaccessible for a certain period of time. This remained a point 7

8 of concern to the Project Team, who continued to encourage the MoJ to set and meet feasible goals and objectives with practical timelines and outputs. b. Manual Development Update The project team encountered significant delays in production and finalization of the manual due. After the manual had stagnated with the MoJ review committee for many months, the Project Team received feedback from the review committee in the previous quarter, and has updated the draft to provide more Ethiopian-specific context and to be more practitioner-oriented in its format and tone. The revised draft was shared with project consultant assistance in shaping the document to be more substantively practical and relevant at the practitioner/operational level. The Project Team has provided this revised draft to MoJ staff, indicating that this remains a working document to be further refined and advanced by the MoJ. 3. Political Developments and Analysis a. FATF Public Statement: October 2014 In October 2014, the FATF formally removed Ethiopia from its ongoing monitoring process related to AML/CFT compliance. This was a very exciting acknowledgement for the FIC staff as they have long awaited recognition of Ethiopia s progress in building its AML/CFT regime. FIC leadership continues to attend RRG meetings and remains in contact regarding their status. 4. Summary of Final Project Outputs and Outcomes: FIC Workstream a. Component 1 -- Training and ongoing technical assistance for FIC staff on core FIU functions i. Objective as stated in the initial contract Working closely with SØIK, UNODC, and the MoJ, and based upon established operating procedures in the Ethiopian legislation and international standards, technical experts will assist in the delivery of an intensive training series designed for the FIC staff. In accordance with the immediate needs of the FIC outlined in the Scope of Services, the first objective of the FIC workstream would be the delivery of an intensive training regimen for FIC staff on the core FIU functions and be followed by more advanced seminars. 8

9 ii. Outputs: Training series on core competencies related to AML/CFT for all relevant FIC staff and additional relevant stakeholders # of Date Training Subject Participants August 2013 Advanced Financial Intelligence I October 2013 Standard Operating Procedures I November 2013 Advanced Financial Intelligence II January 2014 Collaborative Financial Intelligence 11 International Frameworks on Sanctions and April 2014 Asset Freezing May 2014 Regulatory Standards for Reporting Entities June 2014 Closed Door Discussion: Role of Financial Institutions in Driving Economic Growth June 2014 Regulatory Standards of Financial Service Providers June 2014 Risks Associated with New Technologies August 2014 Economic Crime and Multiagency Cooperation October 2014 Multi-Faceted Role of the FIC October 2014 Standard Operating Procedures II December 2014 Advanced Financial Intelligence II Part 2 22 Development of action agenda to address concerns outlined in the ICRG monitoring process Annotated reviews of national regulation on asset freezing, Proclamation No. 780/2013 and Customer Due Diligence Directive No. SBB/46/2010 Development of standard operating procedures as related to analysis, receipt, and dissemination of STRs Review and assistance with the development of FIC guidelines for DNFBPs 9

10 iii. Outcomes: The project demonstrably increased the technical capacity of the FIC staff through an intensive training series on core FIC functions conducted under this objective. The FIC has enhanced its operational capacity and now serves as a leading institution in Ethiopia s strengthened national AML/CFT regime. The training series received positive feedback from participants, with the majority indicating an increased assessment of their skills and comprehensive levels on key issues as a result of their participation in these sessions. Participants ranked their level of satisfaction and perceived understanding of the issues on a scale of 1-5, with 1 being low levels of satisfaction and 5 being very happy. The Project Team has compiled the data collected in post-training evaluations to produce an overall assessment of the training, the highlights of which are included below. o Concerning training subject and topics, 98% of participants rated their satisfaction with the training they attended as 3 or higher, with 91% providing a 4 or 5 rating. o Nearly all of the participants rated their satisfaction with the content shared during the training program as a 3 or higher, with 89% rating it as a 4 or 5. o The quality of discussion was also highly rated, with 87% rating the discussion as a 4 or 5 and almost no one rating it lower than a 3. o 87% of participants indicated they were satisfied with the quality of group activities, and 74% rated them as a 4 or 5 overall. o 98% of participants felt their understanding had increased as a result of the training they attended. o When asked if the knowledge they acquired during the trainings could be used in their job, 97% replied yes. Under this objective, the Project Team collaborated with international experts to provide substantive review and feedback on the development of Ethiopian legislation and guidance notes to reporting entities. This support provided direct and specific commentary designed to strengthen Ethiopian legislation in line with international AML/CFT standards. Ethiopia s progress on this front was noted when it was listed as fully compliant with all FATF Recommendations and officially removed from the ICRG review process in October a. Component 2 -- Strengthening the FIC s analytical toolbox i. Objective as stated in the initial contract: Activities in this component will seek to strengthen the FIC s capacity for strategic and tactical analysis through the development of internal knowledge and its dedicated analytical unit. Supported by experts from the SØIK and other partners, and building on the earlier and ongoing training activities, technical experts will deliver an advanced training and best practices exchange program to designated FIC analysts. ii. Outputs: Throughout the training series, presenters emphasized the importance of the financial intelligence process for effective analysis and identification of money laundering and terrorist financing. Advanced sessions were held on intelligence analysis, IT selection, and database management. 10

11 FIC best practice exchange and discussion forums through trainings delivered by representatives of more developed FIUs, including Mauritius, Nigeria, and Thailand On-site information sharing and IT system familiarization visit to the FIUs of the Republic of Korea, People s Republic of China and the Republic of India on 22 March 5 April 2014 On-site information sharing and IT system familiarization visit to the Financial Intelligence Centre in South Africa between 1-5 July 2014 On-site training with IT and analytical staff from the FIU Mauritius related to provide strategic guidance and share experiences related to information system architecture, database creation and management and IT software selection on December 2014 Establishment and strengthening of best practices exchange with SØIK Development of a strategic partnership the Mauritius Financial Intelligence Unit iii. Outcomes: The activities undertaken through this objective have resulted in significant increases in the analytical capacities of the FIC staff. The importance of data analysis was stressed as a key component of the FIC mandate in all trainings, and advanced level sessions were held with FIC analytical staff to enhance their understanding of the financial intelligence process and best practices for data analysis and information management. On-site information sharing visits provided an important opportunity for hands-on engagement with experienced staff and allowed for an interactive discussion on the day-to-day best practices of a well-established FIU. These visits have been extremely useful to the FIC in identifying best practices related to the analysis and dissemination of suspicious transaction reports, as well as the further development of standard operating procedures. These visits have also provided a key internal training opportunity, with delegation members sharing information and lessons learned with other FIU staff upon their return. This component of the project has strengthened relationships between the FIC and SØIK and the FIU Mauritius, which will enable long-term strategic partnerships and facilitate information sharing with more welldeveloped FIUs. b. Component 3 -- Train and raise awareness of prioritized reporting entities and the wider public, and develop FIC external relations capacity i. Objective as stated in the initial contract: Organized with the ongoing assistance and strategic guidance provided by technical experts, outreach activities will be conducted by FIU representatives. This approach will help build confidence among FIC staff and help establish the FIU s credibility among reporting entities, the general public, relevant partner agencies within the Ethiopian government, key international partners, and multilateral AML bodies. Priority will be given to the facilitation of a seminar with the directors and compliance departments of commercial banks on reporting guidelines and indicators for identifying suspicious transactions. ii. Outputs: 11

12 Development of an outreach and communication strategy for the FIC including the production of brochures, op-eds, and radio and TV programming Drafting of knowledge products by international and local consultants: o Forex and Remittances o Role of Public and Private Banks o Role of Graduate Schools in AML/CFT o Potential for Charity Abuse for ML/TF Purposes o Comparative Assessment of Proclamation 780 o Confiscation Under AML/CFT Law o AML/CFT Guidelines for DNFBPs o Practices for Law Enforcement, FIUs and Customs o Third Assessment Report Regional training series in collaboration with the MoJ: o March 2014: Adama city, Oromia region o July 2014: Awasa city, Great Rift Valley o 25 December 2014: Bahir Dar city, Amhara region o 30 December 2014: Mekelle city, Tigray region Training and awareness raising for Ethiopian banks o On 23 June 2014, a closed-door discussion was held with senior leadership from Ethiopia s nineteen public and private banks on the role of financial institutions in driving economic growth. This high-level meeting helped strengthen relationships between Ethiopian banks and the FIC, as well as raised awareness about the importance of continued AML/CFT training for working-level risk and compliance staff. Ethiopia s acceptance as a full member of ESAAMLG in September 2013 Completion of mutual evaluation with ESAAMLG o This was conducted on September 2014 with FIC staff and other relevant stakeholders to discuss the existing policies and procedures in order for evaluators to assess the level of compliance with international standards. Outreach with and feedback from key members of the international AML/CFT community, conducted by Project Team on behalf of Ethiopian FIC and its progress o Initial expert revision of national regulation on asset freezing by a former UN official in September 2013 and a second revision by a sanctions expert formerly with the Analytical Support and Sanctions Monitoring Team at the UN in April 2014 o Expert review of Ethiopian CDD directive in September 2013 by an international consultant formerly with US Treasury o On 25 March 2014, the Project Team met with the Al-Qaida and Taliban Monitoring Team. o On 17 April 2014, Team Leader met with Policy Advisors within the Office of Terrorist Financing and Financial Crimes at the US Department of the Treasury. 12

13 iii. Outcomes: As a result of the project s focus on relationship building, the FIC has shown increasing willingness to engage with local, regional and international stakeholders on AML/CFT issues. This is an important step toward increasing international engagement for an entity of a government that has traditionally placed a high priority on privacy and information security. Under this project objective, the FIC conducted successful awareness raising activities designed to improve compliance among reporting entities, including a series of regional trainings in collaboration with the MoJ to expand awareness outside of the capital. The development of a strategic communications plan has helped raise the visibility of the FIC among internal actors, and established the institution as technical experts on AML/CFT within the country. In addition to increasing visibility within Ethiopia, the project also assisted Ethiopia in building its relationship with key members of the international AML/CFT community. Project staff facilitated visits with key AML/CFT officials to help promote Ethiopia s achievements. In September 2013, Ethiopia was accepted as a full member of ESAAMLG, providing important recognition of their advancements on AML/CFT compliance and demonstrating their willingness to collaborate with regional peers. This type of internal and external recognition further establishes the FIC as credible experts and promotes continued engagement with regional and international peers. c. Component 4 -- Inter-agency cooperation and knowledge-sharing and awareness raising in the government sector i. Objective as stated in the initial contract: As a new institution, enhancing its credibility and demonstrating its added value to relevant domestic authorities as identified in Ethiopia s new AML legislation is essential for building a cohesive framework for AML/CFT cooperation among Ethiopian authorities. Technical experts will assist FIC management and key staff in developing strategic and operational relationships with relevant Ethiopian authorities, including the FIC Board of Directors, the Federal Parliamentary Assembly, the Federal Police Commission, the Tax and Customs Administration, the National Bank, and the Federal Ethics and Anti-Corruption Commission. ii. Outputs: Signing of memoranda of understanding by FIC with five government institutions: MoJ, National Bank of Ethiopia, ERCA, FPC, and FEACC Convening of a donor coordination meeting on 8 October 2013 in Addis Ababa. Attendees included representatives from the African Union (AU), Australia, Canada, Denmark, European Union, Germany, Italy, IGAD Security Sector Programme (ISSP), United Nations Office on Drugs and Crime (UNODC) and the United States. The objective of the meeting was to inform the Addis-based diplomatic and donor community about Denmark s ongoing work on anti-money laundering and countering the financing of terrorism (AML/CFT) capacity building activities in Ethiopia, as well as to explore potential linkages with related national and regional engagements. 13

14 Inclusion of relevant stakeholders from a variety of agencies in technical trainings alongside the FIC to both build capacity and foster strengthened inter-agency relationships. Below is a chart indicating participants from each organization in attendance: Training Subject FIC MoJ INSA MCIT FEACC ERCA FPC Fin. Inst. DNFBPs Other Advanced Financial Intelligence I 10 Standard Operating Procedures I 11 Advanced Financial Intelligence II 5 21 Collaborative Financial Intelligence 11 International Frameworks on Sanctions and Asset Freezing Regulatory Standards for Reporting Entities Role of Financial Institutions in Driving Economic Growth 1 18 Regulatory Standards of Financial Service Providers Risks Associated with New Technologies Economic Crime and Multiagency Coop Multi-Faceted Role of the FIC 15 Standard Operating Procedures II 15 Advanced Financial Intelligence II Part iii. Outcomes Interagency coordination and cooperation on issues related to ML and TF is crucial to the soundness of a country s regulatory regime. Ethiopia is making progress in forging formal and informal relationships as a result of continued interagency trainings. Group activities at each of these trainings enabled participants to interact, network, and share knowledge regarding their respective roles and opportunities for interagency cooperation in the handling of AML/CFT cases. Throughout the duration of the program, the Project Team remained in regular communication with SØIK, the World Bank, UNODC, and other relevant actors to ensure that there was no duplication of efforts and to coordinate programming calendars to avoid overlap and best utilize project funding. 14

15 5. Summary of Final Project Outputs and Outcomes: MoJ Workstream a. Component 1 -- Assessment of existing training materials and preparation of additional materials to feed into the MoJ s final training manuals i. Objective as stated in the initial contract: Working with designated MoJ trainers and UNODC, technical experts would help assess the effectiveness and existing gaps in the current suite of MoJ training materials on money laundering and terrorist financing, and the practical challenges of detection, investigation, and prosecution in accordance with international standards and Ethiopian law. Resulting feedback in combination with new modules, cases, and typologies developed with the assistance of technical experts will feed into a final training manual on AML/CFT for Ethiopian authorities. ii. Outputs: Identification and development of four anonymized case studies to be used as illustrative examples Development and refinement of a training manual for practitioner-level MoJ staff on the key concepts and processes for dealing with money laundering and terrorist financing crimes within the Ethiopian context iii. Outcomes: The project team encountered substantial interruptions in the development of a practitioneroriented MoJ training manual. MoJ colleagues continually indicated difficulty in coordinating meetings with the review committee in a timely fashion, which resulted in significant delays in project completion. The MoJ did complete a review of the document and made substantive suggestions as to the organization and framing within the Ethiopian context. The Project Team was able to incorporate this feedback and provide a working version to MoJ colleagues for their continued development and refinement. This document, once finalized, will help institutionalize the knowledge generated through this program and serve as a key resource to address challenges presented by high turn-over rates within the MoJ. b. Component 2 -- Technical support for MoJ-sponsored practitioner field trainings on investigating and prosecuting money laundering and terrorist financing offences i. Objective as stated in the initial contract: Following completion of the training materials, technical experts will remain available to accompany MoJ trainers as they implement training modules with 300 individuals in Ethiopian law enforcement, prosecution, judicial, parliament, financial, and regulatory institutions through a series of regional field trainings as well as trainings in the capital. ii. Outputs: Convening of inaugural train-the-trainer session for the criminal justice officials in Addis Ababa on October

16 o The training was attended by 40 Ethiopian officials from the MoJ and a number of key agencies including: ERCA; FPC; FEACC; the Federal Supreme Court; the National Bank of Ethiopia; and the Amhara, Oromia, and Tigray Regional Justice Bureaus. Five regional trainings in December 2013 o The series included the participation of 250 Ethiopian officials including judicial officers from the regional high and supreme courts, the regional justice bureaus and zonal offices, regional and zonal police offices, the ERCA, the Ethics and Anti- Corruption Commission, as well as legal officers from commercial bank branches. o 9-10 December 2013: Tigray region, Mekelle city o December 2013: Amhara region, Bahir Dar city o December 2013: Oromia region, Adama city o December 2013: Southern region, Hawassa city o December 2013: Dire Dawa region (eastern), Dire Dawa city Additional regional trainings in 2014 o May 2014: Benishangul region o June 2014: Jijiga region o 1-2 July 2014: Gambella region iii. Outcomes: The activities conducted under this objective have helped enhance awareness of AML/CFT among legal and law enforcement professionals throughout the country. Expanding awareness outside of the capital is increasingly important given the proximity of various regions to neighboring countries and Ethiopia s strategic location within East Africa. Through engaging with regional justice bureaus outside of Addis, the Project Team worked to build a more comprehensive and effective national AML/CFT regime which can contribute to regional security. The train-the-trainer model was particularly successful in establishing key AML/CFT contacts, and in raising confidence and providing important experience in conducting internal trainings. This has helped Ethiopia develop a network of government justice officials who are informed of AML/CFT issues and will continue to raise awareness and build technical capacity, ensuring the sustainability of the work moving forward. 16

17 c. Component 3 -- Support the MoJ in raising public awareness of AML/CFT i. Objective as stated in the initial contract: In conjunction with activities being undertaken by the FIC, technical experts will assist the MoJ in formulating an AML/CFT outreach and communications strategy. This strategy will, in concert with that of the FIC, form the basis of a public outreach campaign to raise awareness of the new AML law, including the provision of guidelines and requirements of reporting entities. ii. Outputs: The Project Team supported the MoJ in its formulation of the engagement and outreach strategy, which including radio and TV programming, website development, journal articles and the production of a brochure. iii. Outcomes: Under this objective, an updated awareness raising strategy was developed and formally accepted during the project timeframe.. However, implementation remained limited due to difficulties within the MoJ. Two radio programs were aired on Radio Fana Broadcasting focused on AML/CFT and asset freezing. Contract negotiations were also initiated for the production of two TV programs to air on the pre-existing legal program, Amicus. There has been limited progress in the development of public awareness brochures or the journal publication. Additional complications also arose with regards to updating the MoJ website, as the project would require the contacting of an outside vendor by the ICT Department within the MoJ. 6. Lessons Learned and Sustaining Progress in the Future This project has met all of its proposed objectives within the project timelines and budgetary goals as expected and in coordination with the Danish Embassy in Addis Ababa. Activities undertaken have aligned with programmatic goals and contributed to the strengthening of Ethiopia s national AML/CFT regime. This progress was notably recognized at the international level with Ethiopia s official removal from the FATF monitoring process in October This was an important acknowledgement of Ethiopian capacity and political commitment to countering money laundering and terrorist financing. Additionally, as one of the few extended technical assistance programs on AML/CFT in Ethiopia, removal also speaks to the effectiveness of the program in achieving project objectives. 17