**International Financial Institutions Have Critical Role In Combating Terrorism Financing**
In a speech today to the Annual Meeting of the International Monetary Fund and World Bank being held in Washington, D.C. U.S. Treasury Secretary Paul O’Neill paid special tribute to the role international financial institutions play in dealing with some of the most important and formidable tasks facing the world community.
He particularly referenced this critical role in terms of promoting global growth, trade liberalisation, preventing and resolving financial crises, and fighting the financing of terrorism.
The United States remains heartened by the solidarity that has characterised the fight against terrorist financing in the last year, but Secretary O’Neill pointed out that the battle must be continued on all fronts. This means applying technology, intelligence, and regulations to locate and freeze the assets of terrorists, wherever they may be. It means attacking the terrorists’ financial infrastructure in order to make the transfer of money across borders more difficult, slower, and more visible and thus more easily intercepted. And it means ensuring that all nations have the technical abilities and systems to disrupt terrorist financing.
The United States attaches the highest priority to this effort and is working through all multilateral channels and bilaterally with countries throughout the world – working in the realms of law enforcement, information sharing, and financial regulation and supervision.
The Secretary said, *”We are pleased by the recent steps taken by the IMF and World Bank to work closely with FATF and other organisations to develop a process for comprehensive assessments of anti-money laundering and terrorism financing principles. This undertaking fulfills a critical need to identify gaps in countries’ implementation of agreed international principles so that appropriate technical assistance can be marshalled and provided.”*
The institutions were commended on having put in place a pilot program for these assessments, and the Secretary urged quick implementation of this important initiative, in cooperation with the FATF.
**International Monetary and Financial Committee – IMF Board of Governors**
Mr. O’Neill made similar comments when addressing the International Monetary and Financial Committee Meeting yesterday. That meeting concluded with a Communique, which also paid special attention to the combating of money laundering and the financing of terrorism. Section 14 reads:
*14. The Committee welcomes the actions taken by many countries to combat money laundering and the financing of terrorism, in response to the action plan agreed in Ottawa last year, and urges countries that have not fully responded to do so urgently. It also urges rapid progress on the exchange of information between authorities. The Committee commends the substantial progress made by the Fund, in close collaboration with the Bank, in advancing the action plan.
It endorses the conditional addition of the Financial Action Task Force (FATF) recommendations to the list of standards and codes for which Reports on the Observance of Standards and Codes (ROSCs) are prepared, and looks forward to the final adoption of the methodology and an early start of the 12-month pilot program of assessments and accompanying ROSCs.
The Committee encourages countries to make available additional experts and resources for the IMF/World Bank pilot program, welcomes the pledges made so far, and urges the IMF and World Bank to coordinate closely with the strong international and bilateral efforts to provide critically important technical assistance. The Committee looks forward to an interim report at its next meeting and a full report at the conclusion of the pilot program.*
**Global Economy – Global Ethics**
Horst Kohler, Chairman of the Executive Board and Managing Director of the International Monetary Fund also addressed the Board of Governors of the Fund today, reporting on the IMF’s active engagement in the fight against money laundering and the financing of terrorism.
He took the opportunity to comment on recent challenges, saying that the “community of nations” rose to these challenges and demonstrated that it is capable of acting together to make the world a better place. *”We should not lose this momentum, but build on it and strengthen international cooperation to meet the global challenges that lie ahead. I see today’s gathering of 184 member countries of the Fund and World Bank as an important part of that effort.”*
Mr. Kohler said he is convinced that a better world is possible, “if we are willing to invest in better globalisation.” Having said that, he also pointed out that the concept of global governance must be taken one step farther.
*”Recent corporate scandals,”* he said, *”should remind us that there must be more to a market economy and entrepreneurship than profits alone. As President Vaclav Havel said two years ago in Prague, a global economy needs a sense of global ethics.*