On November 20, 2023, the Executive Board of the International Monetary Fund (IMF) discussed the staff report: “Review of the Fund’s Strategy on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT).”
The staff report takes stock of the implementation of the Fund’s AML/CFT program adopted by the Executive Board in 2018, identifies lessons learned, and seeks the Executive Board’s endorsement of the proposals for the way forward. The report provides an overview of the current approach by staff towards money laundering (ML) and terrorism financing (TF) risks and context, followed by an in-depth analysis of staff’s work under key Fund workstreams—surveillance, financial sector assessment programs (FSAPs), Fund-supported programs, AML/CFT assessments, and capacity development (CD).
It also describes how AML/CFT issues have been integrated into other Fund policies and how staff has contributed to the global AML/CFT agenda through close coordination with other stakeholders to leverage synergies and avoid duplication of work.
Based on these findings, the paper proposes the way forward for the Fund’s AML/CFT strategy by deepening further the integration of financial integrity issues in the Fund’s core functions through enhanced focus on AML/CFT issues that have macroeconomic impact and sets out issues for discussion.
Since the 2018 review of the Fund’s AML/CFT strategy, the coverage of financial integrity issues has increased across all workstreams. Staff enhanced its understanding of ML/TF risks and of the macroeconomic impact of financial crimes, based on a wide range of quantitative and qualitative data, which has guided the Fund’s engagements with member countries.
This review highlights an increased coverage of AML/CFT issues in surveillance and related conditionality in Fund-supported programs. Staff has provided input on AML/CFT in every FSAP, making full use of the flexibility in scope and depth afforded, and contributed to the broader discussion of the stability and soundness of members’ financial sectors, while avoiding duplication with AML/CFT assessments against the international standards set by the Financial Action Task Force (FATF).
The increase in regional, multi country, and thematic CD projects has resulted in assistance to a broader range of countries and enhanced flexibility for targeted and more effective and impactful engagements. Staff’s active participation in AML/CFT assessments by the FATF Global Network has effectively contributed to its assessment efforts.
The current policy to conduct one to two assessments per year has allowed staff to deliver one assessment per year given the length of these exercises, while also increasing staff’s participation in the review of the quality and consistency of draft assessment reports prepared by other assessor bodies which are essential for the IMF’s work and to help ensure a more evenhanded approach in conducting assessments, and in training assessors and assisting countries preparing for assessments.
In addition, staff has participated in an assessment led by a FATF-style regional body, pursuant to the policy endorsed by the Board in 2020.
