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IMF’s anti-money laundering efforts: right region, right sector?

March 19, 2010

Here is the full text of an article from The Financial on Mar. 12 called, “IMF Technical Assistance Helping African Countries Step Up Measures Against Money Laundering”:

The International Monetary Fund (IMF) is helping 16 African countries step up their fight against money-laundering and the use of their lucrative gold and diamond industries to fund terrorism through a range of technical assistance programs and seminars targeted at helping countries address institutional weaknesses.

In the last few years, a number of reports have raised concerns about the existence of links between the trade in precious minerals and illicit financial flows, corruption, drug trafficking, arms smuggling and the financing of terrorism.

Anti-money laundering and combating the financing of terrorism is a key focus of the IMF’s program of technical assistance for members. The work of the IMF in this area is financed in large part through a multi-donor topical trust fund on Anti-Money Laundering and Combating the Financing of Terrorism (the AML/CFT TTF), which was launched in May 2009 with contributions from France, Kuwait, Luxembourg, the Netherlands, Norway, Qatar, Saudi Arabia, South Korea, Switzerland, and the UK.

“In the first stage of the technical assistance, representatives from six French-speaking African countries are taking part in a five-day workshop this week in Tunis. The workshop is jointly organized by the African Development Bank and the IMF’s Legal Department, which oversees the Fund’s work on anti-money laundering and combating the financing of terrorism. Another workshop is scheduled for June, also in Tunis, for representatives of a group of English-speaking African countries. In the second phase of the assistance effort, participating countries will draw up national AML/CFT strategies with support from Fund-backed experts. IMF staff will also support continued efforts to curb money laundering and terrorist financing through long-term technical assistance programs,” IMF reported.

“Better regulation and oversight of the precious minerals sector will not only help these countries combat these phenomena, but also boost revenues and improve their fiscal situation,” said Emmanuel Mathias, an IMF Senior Financial Sector Expert involved in the program. Improved regulation will also contribute to increasing the compliance of countries in sub-Saharan Africa with the recommendations of the inter-governmental Financial Action Task Force (FATF).

Africa produces an estimated US$19 billion in gold per year and US$6 billion in diamonds. But an unknown amount is laundered or siphoned each year for criminal purposes. All countries participating in the project either produce or trade in precious metals or stones–mainly gold and diamonds. The countries taking part in the first workshop are: Burundi, the Central African Republic, the Democratic Republic of Congo, Côte d’Ivoire, Mali, and Togo.

Hmm… Africa produces $25 billion in gold and diamonds annually?  Keep in mind, businesses in the Persian Gulf region generate $25 billion annually in corporate zakat alone.

I’m glad the IMF is helping with AML in the mines of Africa, but couldn’t IMF resources be put to better use by redoubling their efforts in the Gulf?

One comment

  1. Fighting against money ladundering and financiing terrorism should be the responsibilify of everyone. Why because they are clandestine financial crimes that can’t be cutailed without integreted and coordinated forces of all stakeholders and concerned noational and international bodies. by the time i am writing this comment, i am attempting to conduct extensive research on this area specially from Ethiopian legal system perspective. So, i am lookingforward to here any one to forward me constructive informations on Money laundering and Charitable and religious instituions.

    Thank you inadvance!!!!



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