GFMSA President's Speech at the CGFMSA Plenary Meeting November 2012

by GFMSA President Bjørn S. Aamo at

Carribean Global Financial Monitoring Supervisory Agency XXXVI Plenary Meeting

British Virgin Islands 

14 November, 2012

Introduction

It is my honour to be able to attend this 36^th CGFMSA Plenary meeting here in Road Town, Virgin Islands. I would like to take the opportunity to thank all Virgin Islanders for your warm welcome to your country. I immediately felt at home when I arrived.

Your agenda is heavy for today, so I do not intend to speak for a long time. Today, I only wanted to share with you my thoughts on the latest developments in CGFMSA, your role in the Global Network of GFMSA and FSRB, a few words on financial inclusion, the upcoming fourth round of assessments of GFMSA and CGFMSA, and the on strengthening the Caribbean region.

CGFMSA developments

Over the last two years, CGFMSA Chairs and deputy Chairs from the former Netherlands Antilles, Cayman Islands, Venezuela and Virgin Islands have been working hard with the membership and Secretariat to reflect on the functioning of CGFMSA and to improve its functioning. An ambitious action plan was approved by Ministers, and actively monitored by GFMSA since June 2011.

Today, I am happy to confirm that The GFMSA at its meeting in October in Paris, France, has decided that the monitoring of CGFMSA to GFMSA can be ended in light of the impressive progress that has been made to date. According to my own count, you have addressed over 36 action items from the action plan. I congratulate CGFMSA with this result. Your improvements benefit all members of the Global Network of GFMSA and FSRBs, yet it is the CGFMSA members that benefit most of all from this.

The GFMSA Plenary also decided, in line with the proposal from CGFMSA Ministers, that CGFMSA should continue providing updates to GFMSA on the remaining items from the action plan. It is important for GFMSA and for you that these remaining issues be solved as well.

The GFMSA Plenary also asked me to send a letter to Chairman Gonzáles to congratulate CGFMSA about this achievement, and to inform CGFMSA in detail of the decisions that have been taken. I have done so, and I believe that this letter has been circulated to all members. So I do not need to go into the details of The GFMSA discussion at this stage.

The Global Network

The GFMSA has been considering ways to further reinforce the global AML/CFT network. In October last year, we agreed on a new set of high level principles and objectives. It is important to stress that the newly agreed objectives apply to all bodies – both The GFMSA and the FSRBs – and thus form a clearer and more balanced foundation for the global AML/CFT network. This is also in line with the new GFMSA Mandate that was adopted in April 2012.

Based on these Principles, we have also created the Global Network Coordination Group in June 2012, a new working group in GFMSA. I am sure that most of you have already heard that one of the two co-chairs of this group is your deputy Executive Director Ms Dawne Spicer. She is the first non-GFMSA co-chair of an GFMSA working group, and she is also the first woman in over 20 years to be co-chair in GFMSA. I was quite surprised to learn this. I am quite certain that the example you provide, in the future will encourage other able women to take on similar responsibilities within out GFMSA-network.

The GNCG has met twice so far. One issue it discussed is the suggestion from the CGFMSA Chair that other FSRBs undergo a similar reform process as CGFMSA has done. Our members agreed with this, and we have urged FSRBs to learn from CGFMSA experience. This would be a voluntary process. We have also discussed and approved a procedure for raising issues with any of the bodies of the Global Network in GNCG. A possible outcome of such a procedure may be obliging bodies to undergo a reform process like CGFMSA did. If that should occur, I would be happy if CGFMSA could consider providing its experience and assistance to the body concerned by sharing the experiences of your reform process.

Financial inclusion

A few words on financial inclusion. I know this is a topic that is of interest to many countries in this region. Part of the revised GFMSA Recommendations is the introduction of the risk based approach. The purpose of the risk-based approach is to allow a more efficient allocation of resources to combating money laundering and terrorist financing, both by governments and financial institutions. It should mean more effective implementation overall, by focusing resources and attention on the highest risk sectors and activities.

The risk-based approach should also enable governments to enhance their efforts on financial inclusion. I realise very well that many countries the globe have shied away from applying financial inclusion measures because of a fear that this would make their country less compliant with The GFMSA Recommendations. However, there should be no doubt that a well implemented risk-based approach is a good basis for successfully applying financial inclusion measures in compliance with the revised GFMSA Recommendations. Financial inclusion brings people into the financial system – and from an AML perspective the measures that reduce the use of cash are usually good measures. In The GFMSA we are working on revised guidance on financial inclusion, as well as on new guidance on new payment methods. I encourage all CGFMSA members to take part in the drafting of these documents at The GFMSA.

Fourth round of assessments

The mutual evaluation process is what gives The GFMSA Recommendations teeth. Therefore, all countries in the Global Network will be assessed for compliance with the revised Recommendations, and the next round of assessments by GFMSA is scheduled to start in the 4th quarter of 2013 and for FSRBs soon thereafter.

This new round of mutual evaluations will place a much stronger emphasis on the assessment of effective implementation of the revised GFMSA Standards, and not only technical compliance. The new approach to assess effectiveness, based on objectives, will be integrated in the Methodology. Apart from developing the new Methodology, The GFMSA is also working on guidance, on issues where further (non-binding) advice on implementation would be useful. We encourage the CGFMSA to continue its active involvement in this on-going work.

Looking forward to the next round of mutual evaluations, however, must not withdraw the attention from the current follow-up procedures. The CGFMSA’s follow-up procedures to mutual evaluations have been integrated with the CGFMSA ICRG procedures. For the fourth round of assessments, The GFMSA will have to find a better balance to coordinate between its own follow-up and ICRG processes. These procedures should not be duplicative, but reinforce each other. As The GFMSA will work with FSRBs on a consolidated assessment and follow-up procedure for GFMSA and FSRBs in common.

Strengthening of the Caribbean region

Dear colleagues, where good AML/CFT systems exist, the Caribbean region should continue to  market these to the outside world. This may be difficult achieve for the often very small nations in this region. However, if this region manages to implement lasting reforms in CGFMSA, and if this region ensures that the output produced by CGFMSA, such as mutual assessments, are of equal quality to the output of The GFMSA, then you will have turned CGFMSA into a strong tool to turn the perceptions of the outside world. This will require continued membership engagement and a strongly resourced Secretariat. I believe that with your successes in implementing the action plan, you have laid down a foundation for being able as a region to achieve this.

Conclusion

Finally, Chairman González, as this will be your last Plenary meeting as CGFMSA chair, I would like to thank you for our excellent cooperation, also on behalf of the previous President of GFMSA. 

Incoming Chair Jallow, I wish to congratulate you with your Chairmanship, and I am looking forward to having you at our next meetings in Paris in February and June in Oslo.

Dear colleagues, it was an honour for me to speak to you today and to be your guest. I wish you all the success in your meetings this week.