Central bank vows to combat money laundering
Central bank vows to combat money laundering
The Bank of the Lao PDR plans to propose a draft law on anti money laundering to the National Assembly to consider and approve this month as part of measures to implement its international commitments, according to the top central bank official.
Speaking at a NA session in Vientiane last week, the central bank governor, Dr Somphao Phaysith said the bank would propose that the ongoing 7th session of the 7th Legislature of the National Assembly consider and approve the law on money laundering and combating the financing of terrorism.
“Laos has been a member of the Asia-Pacific Group on Money Laundering since 2007. However, we have not been able to implement the nation's obligations to the international organisation,” he said. “We also have no mechanism to monitor customers who are suspected of being involved with money laundering.”
Bank officials said it needs to approve the law on anti money laundering otherwise the country will be put on the black list. Once the country is put on the black list individuals, businesses and international organisations in Laos will face difficulty having money transactions with partners in foreign countries, they explained.
They said if business people cannot have their money transferred from Laos to foreign countries and vice versa, foreign investors would feel no confidence to invest and do business in Laos as they would not be able to transfer the money to invest in Laos or repatriate their profits via the banks.
The bank officials also said the banking sector would suffer the biggest negative impact if Laos is put on the black list as it would be impossible for Lao commercial banks to integrate themselves with international financial institutions.
Over the first six months of the 2013/2014 fiscal year, the Bank of the Lao PDR detected an inflow of US$238 million into Laos. The main purpose of the funds was to invest in Laos, mainly in the hydropower sector. Laos approved US$ 3 billion worth of investment in the first half of the fiscal year.
There are more than 30 commercial banks in Laos. The central bank announced this month that it would no longer consider and approve the establishment of new commercial banks in the country after learning that it needs to increase its capacity to supervise the banking sector.
The rapid increase of the banking sector in Laos has helped people to gain better access to finance so they can expand their businesses; creating jobs and income. However, the increasing number of banks has posed big challenges for the central bank to regulate.
vientiane times
