OPENING REMARKS BY JOHAN MATHISEN, RESIDENT REPRESENTATIVE OF THE INTERNATIONAL MONETARY FUND IN MOLDOVA

Dear Guests,  

It’s an honor for me to be here today and to be part of the group to welcome you all. I am particularly happy that the focus of this seminar is the application of  Customer Due Diligence, as our experience show that CDD by local financial institutions as well as a high degree of transparency is crucial to effectively fight money laundering and the financing of terrorism.  

As I am sure speakers at this seminar will discuss in great detail, CDD must be an integral part of establishing any business relationship between a financial institution and a client and is of course particularly relevant to detect suspicions of money laundering or terrorist financing activities. Your job is therefore very relevant as many of the methods applied by criminals to launder money or finance terrorism involve the use of the financial system to transfer funds. Financial institutions, in particular banks, are most exposed to abuse for that purpose. In order to protect themselves, it is essential that financial institutions have adequate control and procedures in place that enable them to know the person with whom they are dealing. Adequate due diligence on new and existing customers is a key part of these controls. 

From IMF’s point of view, with nearly universal membership, the problems presented by money laundering activities are global. Money launderers exploit differences between national anti-money laundering laws and systems, preferring jurisdictions with weak or ineffective controls where they can move their funds more easily. If countries fail to address money laundering issues adequately, crime can become more entrenched. The international community has there fore made the fight against money laundering and the financing of terrorism a priority. Among the goals of this effort are: protecting the integrity and stability of the international financial system, cutting off the resources available to terrorists, and making it more difficult for those engaged in crime to profit from their criminal activities.  

The IMF is especially concerned about the possible consequences of money laundering and the financing of terrorism on its members' economies. Therefore, in 2000 the Fund responded to calls from the international community to expand its work in the area of anti-money laundering (AML). After the tragic events of September 11, 2001, the Fund intensified its activities in this area and extended them to the area of combating the financing of terrorism (CFT).These include risks to the soundness and stability of financial institutions and financial systems, increased volatility of international capital flows, and a dampening effect on foreign direct investment. 

The IMF is contributing to the international efforts in several important ways, consistent with its core areas of competence. As a collaborative institution with near universal membership, the IMF is a natural forum for sharing information, developing common approaches to issues, and promoting desirable policies and standards-all of which are critical in the fight against money laundering and the financing of terrorism. In addition, the IMF's broad experience in conducting financial sector assessments, providing technical assistance in the financial sector, and exercising surveillance over members' economic systems has been particularly helpful in evaluating countries' compliance with the international AML/CFT standard and in developing programs to help them address identified shortcomings.  

The three main areas of the IMF's work in connection with anti-money laundering and combating the financing of terrorism are Assessments, Policy Development, and Technical Assistance.  An example of assessment that Moldova is familiar with is the evaluation of financial sector strengths and weaknesses conducted under the Financial Sector Assessment Program (FSAP) which also includes an assessment of the AML/CFT regime. On policy development, the IMF is often part of help setting the International Standards some of these assessment are compared against. Finally,  the IMF provides substantial technical assistance to member countries on strengthening their legal, regulatory, institutional and financial supervisory frameworks for AML/CFT—and this seminar is an example of such technical assistance.  

As Moldova is increasingly being integrated in the international financial community improving customer due diligence to fight money laundering will become more and more important. The integration will not only imply that the threat of money laundering activities might increase, but also that the benefits of overcoming these risks will increase. In the case of Moldova, the benefits of an improved AML regime is a question of whether the country's commercial and financial sectors are perceived to be vulnerable to money laundering. Reducing these perceived vulnerabilities might have two important economic benefits. One is that is might helped to further attract foreign direct investments. The other is that the perceived country risk might fall. This in turn might reduce the premiums foreign and well as domestic borrowers has to pay for operating in Moldova. Surely the recent improvements in the judicial framework will have substantial positive impact in this regard, but the main economic impact will only be felt when there is effective implementation of the new AML law and regulations. Hopefully, this seminar will take us part of the way towards effective implementation of the new AML regime in Moldova. I therefore wish you good luck and hope you have a productive seminar.