IMF Works to Fight Money Laundering and Terrorism Financing

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Money laundering and terrorism financing continue to plague many countries, threatening the integrity and stability of financial institutions and systems.

For the past seven years, the IMF has helped many countries strengthen their defenses in the battle against illicit activities. Countries have drawn on IMF assistance in drafting laws and regulations, and in developing strategies and methodologies for their financial sector supervisors. More generally, the IMF has helped countries develop the capacity of their financial sector supervisory agencies, financial intelligence units, and judicial officials.

The IMF assists its member countries by conducting assessments and providing technical assistance focused on legal, regulatory, and supervisory frameworks.

A multidisciplinary unit within the Fund's Legal Department-known as the Financial Integrity Group-is responsible for implementing the IMF's mandate on anti-money laundering and combating the financing of terrorism (often referred to by the acronym "AML/CFT").

Strong corporate governance, rule of law, and integrity are the key ingredients of well-functioning, modern financial markets. Underpinning these elements are effective AML/CFT regimes consistent with international standards. In many countries, AML/CFT regimes also support effective tax enforcement and thus fiscal administration.

Typically, the IMF evaluates countries' compliance with international AML/CFT standards and develops programs to help them address the identified shortcomings.

Demand for IMF assistance has increased steadily every year since the institution became fully involved in 2001.

In the past two years alone, the IMF has conducted 12 AML/CFT assessments and 160 technical assistance missions in more than 150 countries.

Different nations, different solutions

Money laundering and terrorism financing vulnerabilities can impede muchneeded remittance flows and access to international financial and payments systems. The work undertaken by the IMF's Financial Integrity Group in South America has resulted in several successful projects combining the Fund's crosscountry expertise with local knowledge.

The IMF has provided core technical assistance services (legislative drafting, training for financial sector supervisors, and capacity building for relevant government agencies) across a wide range of its...