Norwegian Minister of Finance opens the FATF Plenary meeting

From left to right, FATF Vice President Vladimir Nechaev, FATF Executive Secretary Rick McDonell, FATF President Bjørn Skogstad Aamo and Minister of Finance Sigbjørn Johnsen.
Photo: Tor Martin Bærum/Ministry of Finance.

Ladies and Gentlemen

I am very happy to welcome you all to Oslo, Norway.

Norway joined the FATF in 1991. This was under my first period as Minister of Finance. To have the opportunity to open the FATF Plenary here in Oslo, during my second period, is therefore both a professional and personal pleasure.

Economic crime knows no boundaries. Globalization, with its large contribution to progress, has also given rise to new ways for criminal networks to link and to cooperate with each other. International cooperation is thus essential in fighting money laundering and terrorist financing, and economic crime in the wider sense.

The FATF- family now contains about 180 countries, and cooperates extensively with organizations such as the UN, the World Bank, IMF and the OECD - each with their own areas of expertise. This enables FATF to play an important role in the international efforts against economic crime. Cooperation and dialogue is always essential.

Profits generated from crime are used to finance even more crime and terrorist activity. Illegal tax evasions deprive affected countries of important funding, funding which should contribute to democracy and development of the countries concerned. Organized criminal activity therefore represents a security threat, and it undermines democracy and development.

The 2011 report from the United Nations Office on Drugs and Crimes on illegal financial flows estimates criminal proceeds in 2009 to amount to 3,6 % of the global GNP. Money laundered through the financial system is estimated to amount to 2,7 % of the global GNP.

To "follow the money" is of key importance in detecting underlying criminal activities. To succeed in this effort, well-functioning Anti-Money Laundering and Counter-Terrorism Financing legislation framework, institutions and authorities, are necessary conditions.

Through its work on developing international standards on Anti-Money Laundering and Counter-Terrorism financing, FATF has, since its establishment in 1989, a unique position in this field.

Due to its wide geographical representation, and cooperation with the regional bodies, FATF is well placed to establish a common ground and international cooperation. Exchange of experiences is crucial as countries are faced with a range of challenges in their struggle to fight economic crime.

With the adoption of the 40 new and revised Recommendations in February 2012, member countries succeeded to reach agreement on reinforced measures to combat money laundering and terrorist financing.

I have noted that the standards contain more stringent measures to promote transparency on ownership, which is necessary to prevent criminals from hiding their identities and activities through legal persons and arrangements. Now it is up to member states to implement the standards loyally, ensuring that access to information on beneficial ownership is in fact facilitated.

Another new and important change, from my point of view, is that tax crimes are now included on the FATFs list of predicate offences to money laundering.

The financial crisis shows the importance of states being able to protect their income. Tax crimes are serious crimes, and should be treated as such. With the new standards we have obtained a new arena for international cooperation in this important area – a development I very much welcome.

I have noted that transparency and ensuring tax compliance are high priority also under the UK Presidency of the G8 - and I understand that you later today are to be presented with a report from the summit in Northern Ireland earlier this week.

I would also like to take this opportunity to congratulate you on the adoption of the new Methodology in February this year.

I have been told that you have worked especially hard to reach a common agreement on how to better evaluate the effectiveness of the AML/CFT regimes in member countries.

While laws are necessary conditions for fighting crime, they are not in themselves sufficient. Actual enforcement is crucial. I therefore welcome very much the increased emphasis on assessing the effectiveness of our regimes.

I have been told that difficult questions very soon are to be answered during the upcoming evaluations. One can never improve if not challenged, and we must be prepared to welcome such questions – as well as any good advice on how to make life for criminals as tough as possible.

I understand that you during the next few days will discuss the final preparations for the fourth round of evaluations.

You will go through a number of follow-up reports, identify countries with strategic ALM/CFT deficiencies, discuss a number of new typologies, best practises and guidance. You will also discuss the next priorities of the FATF and the work plan for the upcoming years. In other words – a very busy agenda.

I wish you all fruitful discussions during these days here in Oslo, and all the best with the important work that lies ahead of you.

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