Speech by FATF Executive Secretary

As delivered.

20TH APG ANNUAL MEETING
COLOMBO, SRI LANKA, 17 JULY 2017

Honorable Minister of Finance, Mangala Samaraweera
Governor of the Central Bank of Sri Lanka, Dr Indrajit Coomaraswamy
APG Co-Chairs - Commissioner Leanne Close and Mr H. Amarathunga,
Executive Secretary of APG, Mr Gordon Hook
Executive Secretary of EAG, Mr Vladimir Nechaev
All protocols observed
Distinguished guests and colleagues,

  • Thank you for inviting me today on the occasion of your 20th Annual Meeting. I am delighted to be here in Sri Lanka. This is my first time in Sri Lanka and attending an APG meeting. What a beautiful country and beautiful people.
  • One of my top priorities and of the FATF President is to strengthen the Global Network, of which you are all a part. I am keen to build strong relationships with each of the FATF- Style Regional Bodies (FSRBs).
  • I would like to start by spending a minute reflecting on what we – as a Global Network – have achieved together and the wider benefits of effectively implementing the FATF standards.
  • We have robust global standards to protect the financial system and deprive criminals and terrorists of their funds. The FATF Global Network consists of the FATF itself and 9 regional bodies and today includes 198 jurisdictions that have committed at the highest level to implement these standards, and to being assessed by their peers using the FATF methodology.We work closely with a number of international partners, including the United Nations, International Monetary Fund, the World Bank and Egmont Group of FIUs.
  • As a result, most countries have the legal, regulatory, institutional and operational frameworks in place to be able to protect their economies and contribute to the safety and security of their citizens.
  • However the threat from money laundering, terrorist financing and proliferation financing has never been greater. We are now focused on assessing how effective countries are in dealing with these threats. It is not enough to pass laws, you must use them and have the capacity to do so. Implemented effectively, these measures will protect economies, increase competitiveness and attract foreign direct investment, lending a country a reputation as a good place to do business.
  • Nearly three years have now passed since our first assessment under the new methodology.  We are seeing successful investigations every day in countries around the world. Organised crime groups and terrorist networks are being identified and disrupted, and terrorist organizations cut off from the financial system.
  • We are also seeing examples of poor implementation. In this regard, our special scrutiny of jurisdictions with strategic deficiencies that pose a risk to the international financial system, through our public and compliance statements, has been successful in forcing action.
  • As of June 2017, the FATF has reviewed over 80 countries and publicly identified 61 of them. Of these 61, 51 have since made the necessary reforms to address their anti-money laundering / countering the financing of terrorism (AML/CFT) weaknesses and have been removed from the process.
  • APG’s members have demonstrated their commitment to global AML/CFT efforts. Most recently, the FATF decided to stop monitoring Afghanistan and Lao PDR due to the progress they had made. I would like to congratulate these countries once more as well as the APG Secretariat for the results achieved.
  • FSRBs now have indeed more responsibility in the process. These procedures were developed to complement and do not duplicate or interfere with mutual evaluation follow-up processes. For countries which meet the referral criteria, more time is given to work with their FSRBs to address their deficiencies.
  • Earlier this year, Sri Lanka was the first country with Costa Rica and Ethiopia to report to FATF under the new procedures which now reflect our evaluations and assess how much more effective countries are at tackling these threats. I would like to commend Sri Lanka for the work it has done since the mutual evaluation report was adopted, which demonstrates its strong political commitment.  I encourage Sri Lanka and all countries to continue these efforts and focus on improving the effectiveness of these measures.
  • I would like to recognise the contribution made by the APG to the Global Network.
  • Starting 2014, APG was the first regional body to assess countries’ effectiveness as required by the FATF.
  • APG is also the only regional body that reviews 5 evaluations at each meeting – and to date had all its reports adopted successfully without quality and consistency issues raised. This sets an example for all to follow.
  • Another example is APG’s successful work in typologies and research projects, which often are conducted with other regional bodies. We are looking forward participating in the next APG Typologies Workshop, organised in conjunction with FATF TREIN, in Busan, Korea, in November 2017.
  • And I would like to recognise APG’s important contribution to the FATF’s work to combat the financing of proliferation. We adopted changes to Recommendation 7 last month, and are working to update FATF guidance on proliferation financing. This work responds directly to the concerns and experiences of APG and its members.
  • I will conclude by saying that the work we do has never been more important to protect financial systems, the broader economy and contribute to safety and security. It is vital that members hold each other to account for robust regimes and that our evaluations are subject to scrutiny.
  • Despite the challenges all countries face our success has never been more recognized by world leaders.
  • The G20 recognizes our success and calls on us to continue leading global efforts to tackle money laundering and terrorist financing. The G20 Summit in Hamburg supported efforts to strengthen the FATF Global Network, which we will continue to do in partnership with APG and others.
  • I am confident we can meet the increasing expectations of the international community. I call on you to maintain your participation in our joint endeavour and hold each other to the highest standards. And I assure you that we in the FATF and my team in Paris are here to work with and support you.
  • Thank you for the opportunity to address you today and I wish you every success with this Plenary week.