IMF fund to combat money laundering, terrorism financing

Thursday, 02 April 2009, 17:19 IST
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Washington: The International Monetary Fund (IMF) will launch a donor-supported trust fund to finance technical assistance in Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT). The Multi-Donor Trust Fund - the first in a series of so-called Topical Trust Funds -will start operations on May 1 and provide about US$31 million over five years to contribute to the strengthening of global AML/CFT regimes, using the Fund's proven expertise and infrastructure, the Fund announced Wednesday. Switzerland, Norway, Japan, Saudi Arabia, the United Kingdom, Luxembourg, Korea, and France will provide about two-thirds of the financing, it said. Discussions are still ongoing with a number of other donors who have also expressed interest in contributing to the Trust Fund. "Global financial stability hinges on collective action at the international level, but also on effective national systems. The trust fund combines both these elements," Murilo Portugal, Deputy Managing Director of the IMF, said. "Robust AML/CFT regimes are an important pillar of the international regulatory and supervisory system and part and parcel of the current efforts to strengthen the global financial framework." In an increasingly interconnected world, financial stability is closely linked with financial integrity. Money laundering and terrorist financing activities can undermine the soundness and stability of financial institutions and systems, discourage foreign investment, and distort international capital flows, the Fund said. Moreover, problems in one country can quickly spread to other countries in the region or in other parts of the world. Individual countries benefit from robust AML/CFT regimes as enhanced financial sector integrity and stability facilitates their integration into the global financial system, it said. They also contribute to more transparent governance and effective fiscal administration, Fund said. "The integrity of national financial systems is thus essential to financial sector and macroeconomic stability both on a national and international level."
Source: IANS
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