Press Release No. 09/108

Press Release: IMF to Start Operations Under its First Topical Trust Fund Supporting Technical Assistance in Anti-Money Laundering and Combating the Financing of Terrorism

April 1, 2009

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, 2009, 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. Switzerland, Norway, Japan, Saudi Arabia, the United Kingdom, Luxembourg, Korea, and France will provide about two-thirds of the financing. 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,” Mr. 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. 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. They also contribute to more transparent governance and effective fiscal administration. The integrity of national financial systems is thus essential to financial sector and macroeconomic stability both on a national and international level.

Background Information

Demand for the IMF’s technical assistance is rising in light of the current global economic and financial crisis, but also because countries are seeking to strengthen their institutions. At the same time, the Fund is moving forward with a broad range of measures to respond more effectively to its members’ needs in light of emerging challenges of the global economy. To meet this rising demand as well as better coordinate assistance delivery, the Fund seeks to strengthen its partnerships with donors by engaging them on a broader, longer-term, and more strategic basis. As a part of these efforts, the IMF is opening its new Central America, Panama, and the Dominican Republic Technical Assistance Center (CAPTAC-DR) (see Press Release No. 09/99) and intends to open three additional Regional Technical Assistance Centers (RTACs) in Central Asia, and Southern and Western Africa.

Complementing the regional perspective of the RTACs, a menu of Topical Trust Funds will provide a global geographical coverage and a specialized topical scope. Following the launch of the AML/CFT trust fund, the roll-out of other trust funds is planned over the next year; topics include revenue policy and administration, management of natural resource wealth, public financial management, sustainable debt strategies in low-income countries, financial sector stability and development in low-income countries, and strengthening of statistics, including for financial sector crisis prevention.