Press Release No. 05/213

Press Release: IMF and World Bank Move to Address Challenges Countries Face in Implementing Anti-Money Laundering and Combating Terrorist Financing Standards

September 22, 2005

The Executive Board of the International Monetary Fund (IMF) has endorsed an adjustment of the IMF's anti-money laundering/combating the financing of terrorism (AML/CFT) program to focus more on tackling the challenges faced by countries implementing standards and regimes. The IMF's Board has also endorsed the Financial Action Task Force (FATF)'s Special Recommendation IX concerning measures to deter cross-border movements of currency and monetary instruments, related to the financing of terrorism and money laundering. These decisions are based on a review of the Fund and the Bank's respective work programs following a call by their Boards' in March 2004 to make AML/CFT a regular part of the work of both institutions.

The Fund and the World Bank have been delivering an intensive work program that is yielding results in strengthening AML/CFT regimes in their 184 member countries. The review indicates, nevertheless, that the revision of the FATF standard in June 2003 significantly raised the bar for countries' legal, regulatory, and institutional frameworks. Comparing assessments performed before and after the revision, the review shows that all countries are facing difficulties in achieving compliance with the revised standard. It advises that given the complexity of the revised standard, the higher costs of implementation and the competing demands on national resources, there is a need to focus on practical considerations, vulnerabilities, priorities, and sequencing in putting in place AML/CFT regimes.

The review notes that the IMF and the World Bank, in collaboration with other donors, have greatly intensified the delivery of their technical assistance to respond to countries' needs. Nearly 1,000 officials from 111 countries have been trained on AML/CFT, including legal, financial intelligence unit and supervisory issues, and 37 countries have adopted or are in the process of enacting AML/CFT legislation while a number of others are at various earlier stages in the process. However, the review also points out that Fund and Bank resources are limited and urges the donor community to commit additional resources, given the clear and urgent need to support countries in the implementation of the revised standard.

Going forward, the Fund and the Bank will continue their intensive work on AML/CFT focusing on assessments of members' AML/CFT regimes, technical assistance delivery, and broader regulatory and economic policy issues.

They will direct special attention to:

• Better integration of AML/CFT work in the context of the Fund's Article IV surveillance and the Bank's country operations, with particular links to the Bank's anti-corruption work;

• Enhancing work on the design and sequencing of AML/CFT regimes;

• Increasing outreach to raise awareness among parliamentarians and key decision makers on AML/CFT; and

• Continuing to work with the donor community to commit additional resources to meet increasing technical assistance needs for countries.