Opening Remarks ESAAMLG Council of Ministers

Remarks by David Lewis
FATF Executive Secretary
Victoria Falls, Republic of Zimbabwe, 2 September 2016

Acting President of the Republic of Zimbabwe Comrade Mnangagwa,
Minister of Finance and Economic Development Honourable Patrick  Chinamasa,
Distinguished Ministers,
Ladies and gentleman, all protocols observed.

I feel I am back among friends and I am delighted to be here in Zimbabwe, with my son Dylan, where we have spent the last week enjoying this beautiful country.

I joined FATF last October at a critical time for the Organisation. The Paris attacks in November had a direct personal as well as professional impact on my staff. Counter terrorist financing is the top priority for FATF and the Global Network of which you are apart, including doing everything possible to cut off ISIL, their affiliates and foreign terrorist fighters from the financial system. At the same time, we are seeing questions being asked about the consequences of poor implementation, such as de-risking and financial exclusion.

I want to spend a minute reflecting on what we have achieved together, and the wider benefits of effectively implementing the FATF standards. Thanks to our collective efforts, we know more now about how money is laundered and terrorism funded than ever before. We have robust global standards to protect the financial system and deprive criminals and terrorists of their funds. 198 jurisdictions have committed at the highest level to implement these standards. 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. We are seeing successful investigations every day in countries around the world. Organised crime groups are being disrupted, terrorist networks identified and terrorist organizations cut off from the financial system.

But we are also seeing examples of poor implementation. 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.

The FATF has proved effective in helping countries to take action. Since 2007 FATF has identified 88 countries with strategic deficiencies in their anti-money laundering and counter terrorist financing measures, that present a risk to the integrity and stability of the financial system and the safety and security of citizens. It has publicly named 59 of these, directly impacting foreign direct investment and the cost of doing business with those countries. 48 of these countries have since made the necessary reforms. Of the 196 countries surveyed for basic counter terrorist finance measures by FATF in 2015, 58 amended their laws in the 3 months following the FATF report to the G20 in November.

All jurisdictions must now focus urgently on effective implementation of the FATF standards; and not stop at just passing laws and regulations.

This is why the global network and the peer reviews we carry out are so important. We are the first global standard setter to assess not only whether countries have the right laws in place but whether they are using them effectively. This is a difficult and resource intensive task. It requires operational experts from countries to dedicate a lot of time to be assessors; for all countries to closely scrutinize these assessments; and for secretariats to be properly resourced and to operate as efficiently as possible.

Despite the challenges all countries face in effectively implementing the FATF standards and evidencing and communicating this through peer reviews, our success has never been more recognized by world leaders. We are increasingly looked to by the G7, G20 and UN to lead the global effort to prevent and detect money laundering and terrorist financing, in particular to help stop corruption, tax evasion and terrorist financing. In December last year the President of the FATF was invited to address an unprecedented meeting of the UN Security Council, which unanimously adopted Resolution 2253 targeting the financing for ISIL.

At the last G20 meeting in China, Finance Ministers and Central Bank Governors welcomed the progress made by FATF with our consolidated strategy on terrorist financing. They called on us to report by October on proposals to improve the implementation of the global standards on beneficial ownership and its international exchange, and they urged us to reflect by February 2017 on how we can strengthen the FATF global network, of which you are all a part. We are working on this now and are determined to do so in partnership with you, ensuring that our proposals have your support, and reflect the challenges you face.

I am confident we can meet the increasing expectations of the international community. So while I call on you to increase your participation in our joint endeavor, I also assure you that we in the FATF and my team are here to work with and support you.

Thank you and I wish you every success with the Council of Ministers meeting and the private sector dialogue later today and tomorrow.