Press Release No. 10/82

Press Release:IMF Technical Assistance Helping African Countries Step Up Measures Against Money Laundering and Terrorist Financing in the Gold and Diamond Sectors

March 12, 2010

The International Monetary Fund (IMF) is helping 16 African countries step up their fight against money-laundering and the use of their lucrative gold and diamond industries to fund terrorism through a range of technical assistance programs and seminars targeted at helping countries address institutional weaknesses. In the last few years, a number of reports have raised concerns about the existence of links between the trade in precious minerals and illicit financial flows, corruption, drug trafficking, arms smuggling and the financing of terrorism.

Anti-money laundering and combating the financing of terrorism is a key focus of the IMF’s program of technical assistance for members. The work of the IMF in this area is financed in large part through a multi-donor topical trust fund on Anti-Money Laundering and Combating the Financing of Terrorism (the AML/CFT TTF), which was launched in May 2009 (see Press Release No. 09/108) with contributions from France, Kuwait, Luxembourg, the Netherlands, Norway, Qatar, Saudi Arabia, South Korea, Switzerland, and the UK.

In the first stage of the technical assistance, representatives from six French-speaking African countries are taking part in a five-day workshop this week in Tunis. The workshop is jointly organized by the African Development Bank and the IMF’s Legal Department, which oversees the Fund’s work on anti-money laundering and combating the financing of terrorism. Another workshop is scheduled for June, also in Tunis, for representatives of a group of English-speaking African countries. In the second phase of the assistance effort, participating countries will draw up national AML/CFT strategies with support from Fund-backed experts. IMF staff will also support continued efforts to curb money laundering and terrorist financing through long-term technical assistance programs.

“Better regulation and oversight of the precious minerals sector will not only help these countries combat these phenomena, but also boost revenues and improve their fiscal situation,” said Emmanuel Mathias, an IMF Senior Financial Sector Expert involved in the program. Improved regulation will also contribute to increasing the compliance of countries in sub-Saharan Africa with the recommendations of the inter-governmental Financial Action Task Force (FATF).

Africa produces an estimated US$19 billion in gold per year and US$6 billion in diamonds. But an unknown amount is laundered or siphoned each year for criminal purposes. All countries participating in the project either produce or trade in precious metals or stones--mainly gold and diamonds. The countries taking part in the first workshop are: Burundi, the Central African Republic, the Democratic Republic of Congo, Côte d’Ivoire, Mali, and Togo.

Background Information

Demand for IMF technical assistance is rising as countries seek to strengthen their institutions. To meet this rising demand, as well as to better coordinate the delivery of technical assistance, the Fund is strengthening its partnerships with donors by engaging with them on a broader, longer-term, and more strategic basis. As a part of these efforts, the IMF established Topical Trust Funds (TTFs) to provide mechanisms for financing specialized technical assistance. The IMF launched its first TTF on Anti-Money Laundering and Combating the Financing of Terrorism in May 2009 (see Press Release No. 09/108). The roll out of other TTFs is planned over the next year in the areas of natural resource management, tax policy and administration, public financial management, development of sustainable debt strategies, compilation of statistics relevant to financial stability, and macroeconomic training for officials from African countries.

Seven Regional Technical Assistance Centers (RTACs) that provide basic capacity building TA complement the technical assistance provided through TTFs. The IMF intends to open three additional RTACs in Central Asia, and Southern and Western Africa.

Useful links

The IMF and the Fight Against Money Laundering and the Financing of Terrorism:
http://www.imf.org/external/np/exr/facts/aml.htm

Technical Assistance at the IMF:
http://www.imf.org/external/about/techasst.htm

IMF Regional Technical Assistance and Training Centers:
http://www.imf.org/external/np/exr/facts/afritac.htm

Financial Action Task Force:
http://www.fatf-gafi.org