## Framework Administered Account for Selected Fund Activities: Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Subaccount

## Source details

**Canonical URL:** [Framework Administered Account for Selected Fund Activities: Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Subaccount](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2009/_032709.pdf)

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### Background and purpose
- In March 2009, the Fund established a new Framework Administered Account to administer external financial resources for selected Fund activities (the “SFA Instrument”).
- The AML/CFT Topical Trust Fund (“TTF”) subaccount (the “Subaccount”) would be the second subaccount under the SFA.
- Purpose: to finance capacity building, training and related activities aimed at helping countries strengthen their frameworks on AML/CFT, leveraging the Fund’s technical expertise and facilitating coordination among donors and TA providers.
- Rationale: Robust AML/CFT controls are a necessary condition for countries’ integration into the global financial system, and improving worldwide compliance with AML/CFT standards benefits the international financial system.

### Design and governance: essential terms and conditions
- Resources of the Subaccount shall consist of:
  - amounts contributed to the Subaccount by donors (“Contributors”), and
  - earnings that accrue as a result of the investment of these amounts (net of any costs associated with such investments).
- Each Contributor must consent to the essential terms and conditions of the Subaccount before the Managing Director may accept the Contributor’s resources.
- Resources will be placed in the Subaccount by each Contributor after signature of a Letter of Understanding between the Contributor and the Fund.
- The Subaccount will permit Contributors to transfer resources from any bilateral subaccount under the SFA into the AML/CFT subaccount.
- Contributors may join the Subaccount at any time; a Contributor’s consent constitutes ex ante concurrence to any additional Contributor joining on the same essential terms and conditions.
- A Contributor may withdraw from the Subaccount and receive a retransfer of its net contributions without precipitating the termination of the Subaccount.

### Financial terms and cost recovery
- Use of resources: to finance capacity building, training and related activities, consistent with the purposes of the Fund for AML/CFT.
- To help defray the expenses incurred by the Fund in the management of the Subaccount that it will finance, reimbursement equal to 7 percent of the expenses financed from the Subaccount will be paid to the Fund from the Subaccount.
- Earnings from investment of contributed amounts (net of investment costs) form part of Subaccount resources.

### Implementation and approval
- The Managing Director established the essential terms and conditions with respect to the nature, design, implementation of activities to be financed, and the method by which the costs of the activities will be financed from the Subaccount.
- The essential terms and conditions are consistent with the terms of the SFA Instrument, and the activities to be financed are consistent with the purposes of the Fund.
- Proposal: that the Executive Board approve the establishment of the Subaccount.

*Prepared by the Legal and Finance Departments, and the Office of Technical Assistance Management; Approved by Sean Hagan, Andrew Tweedie, and Alfred Kammer; March 27, 2009.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2009/_032709.pdf_