Coming out of its recent meeting in Washington, D.C., the International Monetary and Financial Committee (IMFC) has issued a statement welcoming the international community's decisive policy actions to maintain financial stability and restore the momentum of world economic growth. It also pledged to sustain its global action to combat money laundering and the financing of terrorism. (See below)

Governments now face the challenge of helping to foster the global recovery that is underway. This will require continued vigilance and a further strengthening of medium-term policy frameworks - both to improve prospects for sustainable growth and stability, and to reduce vulnerabilities.

The IMFC is encouraged that many emerging market economies have become more resilient by the adoption of sound economic policies, but noted that it will remain crucial to further strengthen fiscal positions, and to press ahead with corporate, financial, and institutional reforms to support the emerging recovery and attract foreign direct investment.

Collaborative Approach

In line with discussions at its previous meeting, held in Ottawa during November 2001, the International Monetary and Financial Committee emphasised a collaborative approach for the IMF, its member countries, the World Bank, and other international institutions in connection with strengthening of the global financial system.

The IMFC was established in 1999 by the IMF Board of Governors, and has the responsibility of advising the Fund on matters relating to the Board of Governors' functions in supervising the management and adaptation of the international monetary and financial system.

The IMFC has 24 members who are Governors of the IMF (generally ministers of finance or central bank governors). A number of international institutions, including the World Bank, participate as observers in the IMFC's meetings.

The next meeting of the IMFC will be held in Washington, D.C. on September 28, 2002.

Combating Money Laundering and the Financing of Terrorism

At its April 20 Meeting, the Committee confirmed as top priority international efforts to counter abuse of the international financial system to finance terrorism and launder the proceeds of illegal activities.

Countries that have not as yet done so have been encouraged to ratify and implement fully the UN instruments to counter terrorism financing, to freeze terrorist assets, and to establish financial intelligence units and ensure the sharing of information. Recognised at the meeting was the substantial progress made by the Fund, in close collaboration with the World Bank, in implementing all elements of its action plan to intensify the work on anti-money laundering and combating the financing of terrorism (AML/CFT). With regard to the assessment of gaps in national AML/CFT regimes, the Committee fully supports the provision of technical assistance to help countries identify and address such gaps.

The IMF has been encouraged to complete the comprehensive AML/CFT methodology, based on a global standard covering the Financial Action Task Force (FATF) recommendations, as well as the development of assessment procedures compatible with the uniform, voluntary, and cooperative nature of the Reports on the Observance of Standards and Codes (ROSC) process.

(See related newsletter article on Rules-Based Frameworks)