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04/04/04 US PROXIES RAMP UP GLOBAL FINANCIAL DOMINATION

IMF and World Bank to help states fight terror financing www.dailytimes.com.pk/default.asp?page=story_4-4-2004_pg7_45

ISLAMABAD: The International Monetary Fund (IMF) and the World Bank have agreed to adopt a more comprehensive and integrated approach against money laundering and terrorist financing in recipient countries and provide technical assistance to them to protect their financial system.

The two money lending world bodies have integrated Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) into their operational work. Technical Assistance (TA) components totalling $2.2 million have been included in lending programs for 4 countries consisting of Bangladesh, Guatemala, Honduras, and Pakistan.

An IMF press release said that in its review of the pilot program, the World Bank and IMF found that while many jurisdictions were doing a good job against money laundering, some were lagging in the implementation of measures to deter terrorist financing. Most higher-income countries have well developed rules and safeguards, but often exhibit specific gaps related to measures to combat terrorist financing. In middle-income countries, frameworks are often in place but much more needs to be done to put them into practice. Low-income countries need assistance in strengthening many aspects of their financial sectors and have been slower in coping with money laundering and terrorist financing. In the years ahead, the World Bank and IMF in their review meetings agreed that they would work with member countries to safeguard their financial systems against terror financing and money laundering. The two institutions will also coordinate with other international organisations in making laws and regulations, building initutional capacity in the financial sector and other governmental agencies and working with local authorities.

The decision, endorsed by the boards of the two institutions, focuses on the recently completed 12-month pilot program of assessment of international standards for combating money laundering and terror financing.

Forty-one countries have so far been assessed since the programme started in the summer of 2002. The two lending bodies have made 33 assessments in both industrialised and developing countries.

A review of the 12-month pilot program shows that the work of the IMF and World Bank has significantly raised awareness of the importance of international cooperation against money laundering and terrorist financing.

Most jurisdictions are now in the process of developing and implementing action plans to correct shortcomings identified by the two money-lending bodies. The World bank and IMF coordinated with many partner organisations in responding to requests for technical assistance, including the UN Office of Drug Control, the Commonwealth Secretariat, FIRST (a multi-donor trust fund for implementation of financial codes and standards in developing countries), bilateral donors such as the Japanese, Dutch and Italian governments. Over the last one year, the IMF and World Bank responded to requests from more than 100 countries to help them build institutional capacity to fight money laundering and terrorist financing. Technical assistance has focused on bringing their laws and regulatory systems up to international standards, building institutional capacity for financial sector institutions, improving coordination among government agencies, and enhancing cooperation with regional and international partners. The assistanceas been provided through country-specific programs benefiting 63 countries, as well as 32 regional programs in more than 130 countries. —Staff Report

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