Press Release: IMF Executive Board Reviews the Fund's Strategy for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)
IMF News, April 11, 2014
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- Press Release: IMF Executive Board Reviews the Fund's Strategy for Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT)
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- Published: April 11, 2014
Background and context
- Press Release No. 14/167
- Date: April 11, 2014
- Media contact: IMF COMMUNICATIONS DEPARTMENT, Media Relations. E-mail: media@imf.org. Phone: 202-623-7100
- On March 12, 2014, the Executive Board of the International Monetary Fund (IMF) reviewed recent developments in anti-money laundering and combating the financing of terrorism (AML/CFT) and discussed proposals for the Fund’s future Strategy on AML/CFT.
- Historical focus: For more than a decade, the Fund’s AML/CFT program emphasized AML/CFT assessments (as part of the Reports on the Observance of Standards and Codes (ROSC) program and of the Financial Sector Assessment Program (FSAP)) and capacity development activities.
- Recent evolution: AML/CFT issues have been increasingly included in surveillance and Fund-supported programs.
Changes in international standards and assessment practices
- The Financial Action Task Force (FATF) revised the AML/CFT standard in 2012 and adopted a common assessment methodology and procedures in 2013.
- FATF quality-control measures adopted:
- stronger quality controls for its own assessments;
- ensured comparable measures are adopted by the FATF-Style Regional Bodies (FSRBs);
- established an ex post review mechanism to address sub-quality reports.
- Under current policy, every FSAP should be associated with an AML/CFT assessment:
- frequency: approximately every five years;
- timing: to the extent possible, within 18 months before or after the relevant FSAP mission.
- Alignment challenges: Despite coordination attempts, it has not always been possible to align FATF/FSRB assessments with FSAP schedules and to provide useful input into the FSAP.
Executive Board assessment — findings and positions
- Directors welcomed the opportunity to review the Fund’s strategy on AML/CFT and agreed that the Fund’s work has significantly contributed to the international community’s response to money laundering and the financing of terrorism.
- Cooperation: Directors encouraged continued cooperation with the World Bank, the FATF and the FSRBs.
- Endorsement: Directors endorsed the revised FATF standard and the new assessment methodology for the Fund’s operational work, noting the greater attention to risks and country context.
- Macro-financial relevance: Directors noted that deficiencies in a country’s AML/CFT regime can have important implications for macroeconomic and financial stability.
- Broad support for including financial integrity issues in Article IV consultations and Fund-supported programs when critical to financing assurances or program objectives.
- Some Directors emphasized the need for evenhandedness in coverage of these issues.
- Quality and burden sharing:
- Directors reaffirmed that AML/CFT assessments are an important part of the ROSC and FSAP programs and stressed ensuring adequate quality across assessor bodies.
- With FATF/FSRB network expansion, the Fund increasingly draws upon FATF/FSRB assessments under burden sharing arrangements.
- Directors welcomed FATF steps to strengthen quality and consistency controls and encouraged staff participation in review mechanisms, as resources permit.
- Conversion of assessments into ROSCs:
- A number of Directors supported or were open to limiting conversion of FATF/FSRB assessments into ROSCs to the FSAP context where assessments have undergone satisfactory quality and consistency review and are not clearly deficient.
- Many other Directors, representing a majority of the Board, preferred to continue converting all assessments into ROSCs, underscoring that FATF’s strengthened controls will ensure requisite quality standards.
- Decision: the current system of converting all assessments into ROSCs following a pro forma review will be maintained.
- AML/CFT input into FSAPs:
- Directors stressed importance of timely and accurate AML/CFT input into every FSAP.
- Preferred basis: comprehensive quality AML/CFT assessments and, in due course, targeted updates/ROSCs, consistent with approach under other standards and codes.
- Directors encouraged assessor bodies to align assessment schedules with FSAPs.
- Staff will supplement ROSC-derived information if necessary to ensure accuracy.
- Where comprehensive assessments or targeted updates are not available, staff may derive key findings on the basis of other sources of information.
Resource implications and operational adjustments
- Directors noted resource implications from:
- (i) increased inclusion of AML/CFT issues in surveillance and Fund-supported programs,
- (ii) assessments under the revised methodology,
- (iii) staff participation in strengthened quality and consistency controls.
- In light of the overall budget situation, most Directors considered it appropriate for staff to reduce the number of Fund-led comprehensive assessments to two or three per year.
Forward-looking items
- Directors noted that the next review of the AML/CFT program would be expected to be completed within the next four years.
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