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Item Maldives : new horizons(Business Outlook ބިޒްނެސް އައުޓްލުކް, 2007-02) Business Outlook; ބިޒްނެސް އައުޓްލުކްItem ޤައުމީ އުފެއްދުންތެރިކަމުގެ މިންގަނޑު 2012 އިން 2016 އަށް(Maldives Bureau of Statistics) މޯލްޑިވްސް ބިއުރޯ އޮފް ސްޓެޓިސްޓިކްސް; Maldives Bureau of StatisticsItem Medium term debt management strategy 2021-2023(Ministry of Finance, Republic of Maldives) Ministry of Finance, Republic of Maldives; މިނިސްޓްރީ އޮފް ފައިނޭންސް، މާލެ ދިވެހިރާއްޖެItem Government budget in statistics Republic of Maldives financial year 2010(Ministry of Finance, 2010) Ministry of Finance; މިނިސްޓްރީ އޮފް ފިނޭންސްItem Government budget in statistics Republic of Maldives financial year 2007(Ministry of Finance, 2007) Ministry of Finance; މިނިސްޓްރީ އޮފް ފިނޭންސްItem Country report the Maldives(Economic Research Department, 2012-11) Maasdam, Reintje; ރިއެންޖޭ މާސްދަމްItem Economic and environmental vulnerabilities of the Maldives and graduation from LDC status(University of Malta, Islands and Small States Institute & The Commonwealth Secretariat, 2004) Majeed, Abdullahi; Abdulla, AmjadThe Maldives is a small island developing state, heavily dependent on fisheries and tourism, which are major sources of foreign exchange earnings and government revenue, and which together account for about 40 percent of gross domestic product. The success of these industries depends on climatic conditions. This renders the country very vulnerable economically and environmentally. The Least Developed Country status of the Maldives is under threat because the country has experienced relative economic improvements that, ironically, have to a large extent been possible by virtue of the support accorded to the Maldives as an LDC. This chapter argues that the criteria used in assessing LDC status need to be refined so as to give more weight to economic vulnerability. The chapter also proposes that no country should be graduated until the criteria are appropriately refined, so as to avoid the risk that the country in question ends up worse-off in spite of its economic successes.Item Maldives : diagnostic trade integration study : volume 1(2006-11)A. GEOGRAPHICAL FEATURES The Maldives is a low-lying archipelago consisting of approximately 1,190 islands, located in the Indian Ocean southwest of Sri Lanka. It has exclusive economic rights over some 859,000 km of sea surrounding the islands but its land mass is limited to only 300 km and is widely scattered over an 850 km north-south fairly narrow stretch. Its population of around 300,000 people inhabits about 200 islands, dispersed in 26 geographical atolls1, and organized in 20 regional administrative units. One third of the inhabited islands have a population of less than 500, the rest have a population of less than 1,000. This exceptionally wide dispersion of its people makes the Maldives unique, even among other countries that are archipelagos. Of the remaining islands, 87 are tourist resorts and 57 are leased for commercial agriculture or used for industrial activity and garbage storage. Accordingly, the vast majority of the islands are uninhabited although a few of these are used for subsistence agriculture. The surrounding sea contains enormous fishery resources. The islands are also an attractive tourist destination given their sandy white beaches and clear lagoons, bringing more than 600,000 tourist arrivals in 2004. The main natural endowments are thus associated with the marine environment. However, the meagre landmass is a causal factor limiting economic opportunities and market development and the country’s geographical features incur high transport costs, thus putting pressure on the competitiveness of the economy. B. GOVERNMENT The Maldives is an independent sovereign nation governed under a democratic executivestyle system. The capital Male’ is situated roughly almost at the middle of the north-south string of islands that make up the country. The president, also head of state and government, and lawmakers are elected according to universally accepted democratic principles for a term of five years. Each atoll is represented in the country’s legislature. Over the years, the country has been politically stable, and in May 2005, the first steps for introducing a multiparty system were taken. 1 Atoll is derived from the Maldivian word atholhu, the only Maldivian word that has become international. It identifies an atoll as a number of islands sharing a common outer reef; there can be one to several hundreds of islands forming an atoll. xi C. ECONOMIC TRENDS Buoyant GDP growth of up to 6 – 9 per cent year driven by investment in the tourism sector with negative or very low levels of inflation is a distinctive feature of the economy in recent years. Significant progress has also been achieved in human and social development over the past two decades. Prudent macroeconomic and public investment policies as well as a largely favourable external environment has facilitated this progress, lifting the Maldives from being one of the 20 poorest countries in the 1970s to one that shares many characteristics of a lower middle-income country today. The GDP per capita was Rf 30,733 (US$ 2,401 equivalent) in 2004. As a result, the Maldives’ graduation from LDC status is a real possibility. However, the government would prefer to delay graduation so as not to lose foreign assistance – including participation in the Integrated Framework – that is critical to the country’s recovery from the divesting tsunami that hit the Maldives and other countries in the region on 26th December 2004. Although loss of human life was minimal, it is estimated that the loss to the economy caused by the tsunami is around 62 per cent of GDP, with full recovery not expected before 2008. It is understood that the United Nations Economic and Social Council (ECOSOC) is sensitive to the government’s need for a carefully managed graduation programme with appropriate transition arrangements. Though liberalization of the economy is advanced and economic growth rates are nominally high, a significant proportion of the jobs created have gone to foreign workers due to rigidities in the local labour market. For a variety of reasons that is elaborated upon in the DTIS, relatively high levels of unemployment and underemployment are a distinctive characteristic of the economy. Flexibility in macro-economic policy is somewhat limited as the country’s currency, the Rufiyaa, is pegged to the US dollar. Recent developments have had a negative impact on trade and economic performance. In particular, there has been a dramatic change in 2005 following the tsunami. This resulted in a downturn in the tourism sector which contributes substantially both to GDP and to foreign exchange earnings. In addition, the garment and apparel industry literally collapsed during 2004 as the end of the Multi-Fibre Agreement (MFA) quota system approached. Rising oil prices throughout 2005 and during the first half of 2006 has brought about a downward spiral in the terms of trade. The boom years that Maldives has experienced in recent years up to 2004 may now be at an end. There is therefore an urgent need to address this situation so that measures can be taken to mitigate the problems that are now being experienced. To this extent, the DTIS exercise for the Maldives has been more than timely. xii D. POVERTY AND HUMAN DEVELOPMENT The recent economic shocks that the country has experienced have exposed the constraints of an economy that is dependent essentially on the tourism sector and the limited intra- and inter-sectoral linkages. Moreover, lack of employment opportunities and insufficient provision of secondary and tertiary education facilities on the atolls, has caused migration to Male’. Migratory trends were further aggravated by the tsunami. As a result the Male’ population is now estimated at 70,000, whereas its theoretical capacity is 50,000. Congestion and unemployment are the immediate negative impacts. With regard to indicators of human welfare, in particular the human development index (HDI), in 2005 the Maldives was ranked 96 (HDI=0.745), behind Dominican Republic (0.749), Turkey (0.750) and Sri Lanka (0.751), ahead of Turkmenistan (0.738) and Jamaica (0.738). This is actually a small slide from a ranking of 84 in 2004 when the Maldives was ahead of Turkey (94) and Sri Lanka (96). The GDP per capita of $ 2,401 in 2004 is near that of Vietnam but below Sri Lanka and Seychelles. The Vulnerability and Poverty Assessment (VPA) carried out by UNDP in 1997 and 2004 indicated that absolute poverty is below one percent. E. TRADE PERFORMANCE AND POLICIES The Maldives economy is very open. Trade in goods typically accounts for around 75-80 per cent of GDP. If services are taken into account, trade in goods and services account for approximately 150 per cent of GDP. Imports of goods typically outweigh exports of goods (mostly fish and fish products) by a factor of between three and four. However, this large shortfall in foreign exchange earnings is to a large extent made up for by revenues from the export of services via the tourism sector. There is therefore only a relatively modest negative current accounts balance. Although there is currently very limited production activity in the Maldives, there is need to be aware of anti-export bias in the tariff structure that may impact on other sectors, such as tourism. Apparently, this problem is being addressed through the extensive use of discretionary duty concessions and exemptions. The total value of these in 2004 was Rf. 413 million, compared to actual collections of Rf 1,136 m, representing approximately 36 per cent of total revenue. In previous years the proportion of concessions and exemptions has been similar (37 per cent in 2001). In 2004 main beneficiary sectors were tourism and fisheries. Theoretically, graduation from least-developed country status will affect the privileges and preferences that Maldives currently enjoys under the multilateral trading system as an LDC member of the WTO. As the graduation of an LDC is unprecedented since the establishment of the WTO in 1995, the graduation of the Maldives will establish some important precedents for the trade body in regard to transitional arrangements. Indeed, xiii WTO members (through the Committee for Trade and Development, CTD) have responded cautiously and agreed to grant the Maldives a transitional period based on a roadmap for graduation to be prepared by the Maldives government. However, in tangible terms, there are two major consequences of Maldives graduating from LDC status: loss of preferential market access; and possible reduction in trade related technical cooperation. F. BUSINESS ENVIRONMENT AND PRIVATE SECTOR DEVELOPMENT The business environment in the Maldives is liberal – the result of which is particularly visible in the tourism sector. As a result, the Maldives comes out fairly well in the World Bank ‘Doing Business Survey’ of such issues as ease of entry and establishment or free repatriation of profits (see the Appendix to this chapter). Indeed, given the specificity of tourism sector ‘resource-seeking’ investment, or perhaps more aptly in the Maldives case, ‘resort-seeking’ investment, a benign approach is primarily what is required to attract the necessary flows. But the business environment in the Maldives is also one in which there are significant gaps in the underlying policy, institutional and legal framework for business development and private sector support. This is reflected in the general weakness of the domestic private sector and thin national portfolio of SMEs engaged in value added activities in the dominant tourism and fishery sectors, forging stronger intraand inter-sectoral linkages, and achieving a more diversified economy. It is also true that as a small island developing economy, the business environment in the Maldives poses formidable challenges for the investor and entrepreneur. Aside from Male’, the capital, there is no significant population centre. Local markets are also difficult to reach given the exceptionally wide dispersion of people. There are therefore serious limitations on the extent to which economies of scale can be exploited. High costs of transportation, infrastructure, energy and water, complete dependence on imported technology, and unavailability of a wide range of skills are further constraints on attaining a competitive business environment. These difficulties were dramatized in the collapse of garment manufacturing when the Multi Fibre Agreement (MFA) expired at the end of 2004. The challenge for the Maldives is to put in place the necessary framework to enable it to take full advantage of its comparative advantage in the tourism and fishery sectors and strong potential in other sectors such as horticulture, port services, handicraft, aquaculture, etc. There is considerable scope for value-added business opportunities in the two main sectors and for dynamic linkages between these and other sectors. As the Appendix illustrates, on some key aspects of the business environment, the record of the Maldives is mixed. xiv G. CUSTOMS SERVICES AND TRANSPORT INFRASTRUCTURE The discussion in the DTIS of the services that facilitate trade in the Maldives is based on recognition that tourism and fishery are the most important export sectors. Currently, over 600,000 tourists a year visit the country, with projections for continuing growth. This requires adequate airport, port and transport transfer facilities to service this volume of visitors in addition to efficient importation processes for the inputs – ranging from construction materials for building and maintenance work on the resorts to food, beverages, and other consumer goods - required by the tourism sector. The fishery sector also depends on the importation of critical inputs such as fuel, boat engines and other fishing gear. Fishery exports are mostly perishable goods and therefore depend on efficient export processes. Significant constraints in hub capacity for both air and maritime transport need to be addressed. Transaction costs are lower when customs procedures are carried out efficiently. The DTIS research confirmed that there is a perception among private sector users that customs procedures are not applied in a uniform and customary way across the country. Malpractice is alleged arising from face-to-face contact between clients and customs officers. But the overall assessment of the DTIS team is that customs procedures are satisfactory although there is room for improvement. In particular, although the customs service is computerized and officers have received training in operating such tools and facilities, there are still gaps at the technical level hindering an optimal use of the technology and IT software systems available. For example, the ASYCUDA++ is not fully utilized and all potential application towards more efficient use has not been explored. In addition, current operational systems and procedures in the cargo control area impede the movement of goods and do not meet the set objective of obtaining maximum revenue at minimum cost. There is also a lack of effective communication and coordination among customs services, the trading community and other agencies (port authority, aviation services, clearing agents, coast guard or police), which adversely affects the efficiency of processes relating to the movement of goods. H. TOURISM SECTOR Very few countries in the world can offer tourists an exotic atoll environment, and even fewer countries in the world are made up of coral platforms, with the accompanying image of Robinson Cruise islands and islets with white sandy beaches, unpolluted crystal clear water and abundant marine life. Overall, the assessment of the DTIS is that institutional capacity for the development, management and implementation of tourism policy in the Maldives is adequate, although there are significant gaps and policy shortcomings. There is also an almost total absence of civil society involvement or engagement with tourism policy. xv The recommendations cover these issues including the need for support to SME development to facilitate linkages within and between tourism and other economic sectors. With foreign workers accounting for over half the total number of jobs in the tourism sector, the recommendations also deal with labour market issues, education and training. I. FISHERY SECTOR The geographical characteristics of the Maldives as an archipelago with a 960,000-km² exclusive economic zone (EEZ) make marine resources an important natural asset. The vast EEZ contains a variety of pelagic species (i.e. fish living in the open ocean) such as tuna species and mackerel, near shore reef fish species and demersal or bottom living species. There are two main commercially active sub-sectors: marine catch fishery and fish processing. There is at present no aquaculture on any commercial scale. Unlike tourism where the government is active in promoting FDI and in marketing the Maldives as a destination, the fishery sector has seen virtually no FDI and attracts relatively little government support. The assessment of the DTIS is that the overall capacity to carry out fishery policy analysis and implement development plans is considered insufficient. There is scope for upgrading the level of technical training and bringing modern methods of fishery policy management into work of the key government agencies concerned. The non-alignment of policy with commercial opportunities is further reflected in the almost total absence of aquaculture – the cultivation of certain fish species – in the Maldives although the reef provides a natural habitat. Another gap concerns the inadequate policy measures to promote the sector as an employment and business opportunity. Although fishing as such is potentially lucrative and generates average returns that are higher than income from public sector employment, as an occupation it is held in low esteem in Maldives society. The younger population shuns fishing, a trend confirmed by survey findings which shows that the average crew age is increasing. The provision of appropriate training facilities as the basis of modernization and professionalization of the occupation can help overcome this trend with significant gains for the development of the sector. Credit and business support facilities for the occupation are also required. Inadequate policy measures to promote the sector as an employment and business opportunity is also reflected in the weak linkages to the tourism industry. Although resort and catering industry chefs demand fresh reef fish, crustacean products and the more expensive tuna species such as yellowfin and bigeye for their clientele, supply has been uncertain and inconsistent, leading in some case to fish imports!Item Republic of Maldives: detailed assessment report on anti-money laundering and combating the financing of terrorism(International Monetary Fund, 2011-07-20) International Monetary FundThis report summarizes the anti-money laundering and counter-terrorist financing measures (AML/CFT) that were in place in the Republic of Maldives at the time of the on-site visit (October 17–28, 2010) and shortly thereafter. It describes and analyzes these measures and offers recommendations on how to strengthen certain aspects of the AML/CFT system. It also assesses the Maldives’ level of compliance with the 40+9 Recommendations of the Financial Action Task Force (FATF) (see the attached table on the Ratings of Compliance with the FATF Recommendations). Key Findings 2. The financial sector of the Maldives, although small and not very developed, is susceptible to both money laundering and, to a lesser extent, terrorist financing. While the authorities do not have estimates of the size of the crime economy, anecdotal evidence suggest that trafficking in illegal drugs and corruption alone produce significant amounts of illegal funds. There are also indications that resources have been raised in the country to fund terrorists and terrorist activities abroad. 3. Over the last years, the Maldives has taken steps to lay down the foundations of an AML/CFT framework. Institutional measures have been taken to set up a financial intelligence unit (FIU), and laws have been passed to criminalize, albeit insufficiently, the laundering of the proceeds of drug-related offenses and impose basic AML/CFT preventive measures on banks. Regulations were adopted to address some AML/CFT aspects in the securities sector. 4. The current AML/CFT framework is very recent and in need of considerable improvements, both in terms of substance and implementation. Domestic inter-agency interaction relies on informal arrangements between the competent authorities rather than on formal arrangements, the criminal legal framework is minimal, and most of the measures for the private sector are issued in the form of guidance rather than mandatory requirements. At the time of the assessment, no enforceable AML/CFT obligations were in place. Shortly thereafter, the authorities passed a new Banking Act which requires banks to implement basic AML/CFT measures such as customer identification and reporting of suspicious transactions to the FIU. Intermediaries in the securities sector are required to implement limited AML/CFT measures which became enforceable in April 2011. Financial institutions other than banks and securities intermediaries, as well as designated businesses and professions (DNFBPs) active in Maldives are not subject to AML/CFT requirements. The authorities are working on a draft AML/CFT law which would impose more comprehensive AML/CFT preventive measures on financial institutions and DNFBPs, strengthen key agencies such as the FIU, and enhance domestic cooperation and coordination. Legal Systems and Related Institutional Measures 5. The Maldives has criminalized money laundering, but only with respect to the proceeds of offenses listed in the Drugs Act. The money laundering offense covers some aspects of the standard but not, for example, the conversion of criminal property and the concealment or disguise of the location, disposition and movement of that property. The authorities believe that, although not mentioned in the law, it is necessary to obtain a conviction for the predicate offense in order to secure money laundering charges. 6. The framework for provisional measures and confiscation suffers from major shortcomings and is rarely used. The types of property that may be confiscated are limited to tangible, corporeal assets with a direct link to the predicate offense, and there is no possibility to confiscate property of corresponding value. 7. The authorities’ action against money laundering is not commensurate to the risk thereof. No investigation has taken place and no charges have been brought for money laundering under the Drugs Act. Drug trafficking is, however, one of the most frequent asset-generating crimes in the Maldives with an increasingly high number of the population using and or trafficking in illegal psychotropic substances. Anecdotal evidence suggests that it may generate up to US$157,000 a day, or US$57 million per year. 8. Activities other than those listed in the Drugs Act do not constitute predicate offenses for money laundering. All of the FATF-designated categories of offenses have been criminalized in the Maldives. However, asset generating crimes other than drug-related offenses such as corruption are not predicate offenses for money laundering and this constitutes a major shortcoming of the current AML/CFT framework. 9. Terrorist financing is not criminalized in a separate and autonomous way. The provision of “finance and property” for the commission of a terrorist act only constitutes an ancillary offense (aiding and abetting) to the commission of that act. The offense is drafted in broad and undefined terms. This would entail that some aspects of the standard are covered (such as the direct and indirect provision of financial support, for example), but it also creates considerable ambiguity in the authorities’ mind as to the precise scope of the offense. No charges have ever been brought before the courts for this offense. 10. There are no laws or procedures in place to freeze terrorist funds or assets of persons in line with United Nations Security Council Resolutions (UNSCR) 1267 and 1373 (and their successor resolutions), and those designated under the freezing mechanisms of other countries. The Maldivian central bank, the Maldives Monetary Authority (MMA), has sent the UNSCR Consolidated list to banks, credit card operators and money transfer businesses with an “instruction” to freeze the account of designated persons and entities, but there is no legal basis (for the MMA or any other authority) to require financial institutions to compare their list of clients with the Consolidated list (or any other list), and, in case of a positive match, to freeze and report the assets. 11. The Maldives suffered one terrorist attack in its capital, the Sultan Park bombing, in September 2007 but reached no clear conclusion as to its funding. The intelligence gathered by Maldivian authorities and by foreign law enforcement agencies (both in respect to this attack and in relation to terrorist activities conducted in other countries) indicated that funds may occasionally be raised in Maldives to support terrorism abroad. There is, however, no information on the amounts involved. 12. Shortcomings in the overall criminal legislative framework, in particular with respect to criminal procedure, and the lack of resources of competent authorities make it challenging for the Maldives to fight effectively against money laundering and terrorist financing. The criminal process is slow and fraught with legal uncertainty mainly due to the paucity of criminal procedure rules. In addition, the AML/CFT system is strained by a lack of capacity in the Maldives Police Service (MPS), the Prosecutor General’s Office (PGO), and the judiciary. 13. The authorities set up an FIU within the central bank on the basis of a 2004 interministerial agreement. The FIU did not become operational until 2006, when the MMA issued an “AML/CFT” Circular to all banks and other money transfer businesses instructing them to report suspicious transactions to the FIU. Despite its title, the Circular only address AML. Absent a legal basis for the MMA to impose AML/CFT obligations, the Circular is not mandatory and not enforceable, but two banks and two money remitters nevertheless filed suspicious transactions reports (STRs) with the FIU in 2009. All four reports were analyzed by the FIU; two were closed because they contained no suspicious elements, one was forwarded to the MPS for further investigation, and one is still with the FIU. 14. The FIU lacks operational independence and has not been granted the necessary powers to conduct its functions in an effective manner. The FIU is the national center for the receipt and analysis of STRs filed by banks, but does not have the authority to disseminate financial intelligence; only the MMA has this authority. The analysis function is limited notably because the FIU has not been afforded access to all relevant information. While so far all the FIU’s requests for information from other agencies have been complied with, there is no legal basis for these agencies to provide the requested information. The FIU does not have the authority to receive, analyze and disseminate STRs from entities other than banks. Since it became operational, the FIU has spear headed the country’s AML/CFT efforts and created a useful (although informal) network of contacts with other key authorities. Preventive Measures—Financial Institutions 15. Banks and intermediaries in the securities sector are the only entities in the Maldives required to implement AML/CFT measures: Mandatory measures for banks were introduced in December 2010 (i.e. less than 8 weeks after the end of the assessment) with the enactment of the Banking Act; The Capital Market Development Authority (CMDA) 2010 Regulation on Anti-Money Laundering in Securities-Related Transactions (the CMDA 2010 Regulation) requires CMDA licensees to apply a number of AML/CFT measures, but, because the Regulation does not constitute primary or secondary legislation, it does not fully conform with the FATF standard. 16. The 2010 Banking Act sets out CDD and record keeping obligations for banks, as well as a requirement to report suspicious transactions to the FIU. Until December 2010, the only text that addressed AML measures was a 2006 MMA Circular to banks and other institutions involved in money transfer activities which provides general information on money laundering and lists some preventive measures that should be implemented. The Circular is, however, neither mandatory nor enforceable and thus falls short of the standard. 17. While the issuance of the 2010 Banking Act is a very positive step in establishing a mandatory framework for AML/CFT preventive measures, the Act should be enhanced in order to be in line with the standard: The identification requirements in particular need to be strengthened (notably with respect to the identification of beneficial owners and the verification of the identity of all customers), and record keeping requirements should be more specific. Internal control requirements are very broad and are yet to be elaborated in regulation. Furthermore, the Banking Act is silent on a number of additional measures that banks should be required to undertake. There are, in particular, no obligations: to apply enhanced due diligence with respect to customers or beneficial owners who are politically-exposed persons; to pay special attention to complex, unusual large or unusual patterns of transactions; to apply correspondent banking relationships and wire transfer rules in line with the standard. 18. AML/CFT measures for intermediaries in the securities sector were issued in 2010 and only became enforceable in April 2011 (i.e. more than 8 weeks after the assessment), but their legal basis is, in many instances, insufficient to be in compliance with the standard. The CMDA 2010 AML Regulations set out some (albeit basic) customer identification requirements and requires licensees to exercise special due diligence to extraordinary complex and large transactions that do not have a clear investment purpose, or that appear otherwise suspicious. It does not, however, require licensees to report suspicious transactions to the FIU. Moreover, record keeping and internal control requirements are too broad to be effective. Overall, considering that the CMDA Regulation is neither primary nor secondary legislation, it is insufficient to meet many of the requirements of the standard. 19. At the time of the assessment, monitoring and supervision of the banks’ and securities intermediaries’ compliance with AML/CFT requirements had not formally begun. The MMA and the CMDA, which are responsible for supervision of financial institutions in the banking and securities industries respectively, have been granted a range of powers to fulfill their functions, but have not started using them for AML/CFT purposes. This is due, in the banking sector, to the recent enactment of the Banking Act and, in the securities sector, to the fact that the CMDA Regulation provided the CMDA licensees with a 6 month timeframe (i.e. until April 2011) to comply with its provisions. It is nevertheless worth mentioning that the MMA did, in the course of prudential supervision, conduct some form of monitoring of banks’ compliance with the 2006 AML Circular (although it was not mandatory) and suggested ways to improve the banks’ nascent AML/CFT systems. 20. Financial institutions other than banks and intermediaries in the securities sector are not subject to AML/CFT obligations. Insurance companies and intermediaries, finance companies, money remittance services providers, foreign exchange businesses and credit card companies therefore operate outside the AML/CFT framework. The authorities are planning on including some, if not all, of these institutions in their draft AML/CFT legislation. Preventive Measures—Designated Non-Financial Businesses and Professions 21. Designated non-financial businesses and professions (DNFBPs) are not subject to AML/CFT obligations and to supervision of any kind. DNFBPs active in Maldives are lawyers, accountants and dealers in precious metals and stones. Casinos are outlawed under the Constitution and Shari’ah. The buying and selling of real estate is conducted by the seller and buyer themselves, or by lawyers. The latter also act as notaries and provide company formation activities and other companies services. Trusts cannot be established under current Maldivian law, but a draft Trust Law was prepared in 2008. According to the authorities, there is at the moment no trust business in Maldives, and no services to trusts formed in other jurisdictions, but the website of some Malé based law firms suggests otherwise. The draft AML/CFT legislation currently being prepared imposes AML/CFT obligations, including reporting of suspicious transactions requirements, on DNFBPs active in the Maldives. Legal Persons and Arrangements & Non-Profit Organizations 22. The current framework does not ensure sufficient transparency of legal persons nor timely access to beneficial ownership and control information. Legal entities may take the form of a company, partnership, cooperative society or non-profit association. According the authorities’ latest figures, there 8,657 legal entities in the Maldives most of which are companies. The Ministry of Economic Development holds some information on registered legal entities, but this information is neither comprehensive nor updated in a consistent manner, and, in the absence of an electronic database, is not readily accessible. 23. The Maldives has a system of registration in place for NPOs but the information maintained by the registrar is insufficient to ensure sufficient transparency of NPOs. Information available at the registrar is limited to that pertaining to the purposes and objectives of registered NPOs, and the identity of their executive committees. There is no active or adequate system to promote effective supervision and monitoring of the NPOs, and no true understanding of risks of terrorist financing in the sector. The authorities suspect that NPOs have been misused to provide funding to terrorists aboard, but their suspicions remain unsubstantiated and no charges were ever brought before the courts. There is no coordinated national strategy to aim at protecting NPOs from abuse for terrorist financing. The authorities are conducting a “scoping exercise” within the NPO sector, which will notably result in a redrafting of the Association Act, but the extent to which it will also look into the NPOs’ vulnerability to terrorist financing risks is unclear. National and International Co-operation 24. A domestic cooperation mechanism specifically dedicated to AML/CFT issues has been set up. A Coordination Committee for Combating Money Laundering and Terrorist Financing was created under the lead of the FIU and brings together representatives from the majority of the relevant authorities (including prosecutors, police, MMA, CMDA). It has not however delivered tangible results at this stage, with the exception of the responses to the detailed assessment questionnaire. 25. There is no legislative framework regulating mutual legal assistance and extradition. The types and range of measures that the Maldivian authorities may take on behalf of another State are mainly defined in memorandums of understanding concluded with other jurisdictions (copies of which were not provided to the assessment team). According to the authorities, very few requests for assistance have been addressed to the Maldives. Informal assistance however is more frequent. Other Issues 26. Overall, the staff of the relevant Maldivian authorities should be increased and provided with training to increase AML/CFT expertise. The FIU has raised awareness on AML/CFT issues amongst the key agencies but there is a need for further AML/CFT training, in particular for the purposes of AML/CFT investigations and supervision. 27. It is important that key pieces of legislation be passed. In addition to comprehensive AML/CFT legislation, the draft revised Penal Code should be adopted and criminal procedure rules should be set out in law in order to enable the authorities to fight against money laundering and terrorist financing in an effective way.Item Legal obstacles in establishing Islamic banking in Maldives(Universitas Trisakti, 2011-01-01) Muneeza, Aishath; Wisham, Ismail