Antigua Queries IMF Anti-Money Laundering Methodology

Tax-News.com, New York

03 February 2003

Antigua and Barbuda's Chief Negotiator on international financial services, Sir Ronald Sanders, expressed concern last week about the position adopted by IMF representatives at a meeting with the Caribbean Financial Action Task Force (CFATF) in Barbados on 15th January.

The meeting was requested by the CFATF to discuss a new methodology being applied by the IMF to assess countries in the Caribbean.

Sir Ronald said, "The IMF has adopted a methodology for assessing the member states of the CFATF without full consultation with governments." The result, he said, "is that CFATF countries will be measured by standards they do not fully appreciate and for which they are unprepared".

At the Barbados meeting, the CFATF representatives offered to establish a Working Group which would engage the IMF in a dialogue on the appropriateness of the methodology with a view to ensuring that it was fair and did not apply measurements that were inappropriate to small jurisdictions.

The Antigua and Barbuda representative declared, "We were very disappointed when the IMF representatives told us that they could not engage in a dialogue on the methodology unless CFATF countries signed-up to it blindly and used it to carry out at least three evaluations of our jurisdictions".

"This was simply an unacceptable position. It reminded many of us of the high-handed position taken by the OECD when it first started its so-called harmful tax competition initiative. We must simply accept dictation and expect no consultation", Sir Ronald said.

At the end of the Special Ministerial Meeting in Barbados meeting on 15th January, CFATF jurisdictions issued a communiqué in which they said, "At this stage, CFATF has not endorsed methodology for the 12-month IMF/World Bank project ending in November 2003".

Sir Ronald explained that in devising the new methodology, the IMF had not only adopted the recommendations of the Financial Action Task Force (FATF), an organisation created by the world's industrialised nations, they had also expanded them and introduced new conditions.

"We are forced to wonder whether there is not a concerted desire to push our jurisdictions out of competition in global financial services", the Antigua and Barbuda negotiator said.

"The troubling thing", he continued, "is that while our jurisdictions will be assessed by the IMF on the basis of this methodology, the FATF member countries will be assessing themselves. We, therefore have no assurance that the assessments will be equal and the results fair".

The Special Ministerial Meeting in Barbados had recommended that letters be written to President of the World Bank and Managing Director of the IMF "expressing the concern of each CFATF country about their desire for a meaningful consultative process".

When the IMF strongarmed the FATF into accepting the new methodology, the initial reaction of the organisation (in effect a parallel OECD concentrating on so-called financial crime), was to say that the IMF's more woolly approach to surveillance and reform of counter-money-laundering legislation would be less effective than the FATF's own, much-criticised but very effective methods. The jury must remain out on whether the joint alliance of the IMF and the FATF will be more or less effective than the FATF on its own; but neither will find much of a welcome in the jurisdictions, as Sir Ronald's statement makes clear.

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