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G-7 Finance Ministers Discuss Global Economy, Terrorist Financing

(Ministers conclude February 8-9 meeting in Ottawa) (1340)
Finance ministers of the Group of Seven leading industrial countries
say they see improved chances for new growth in their economies, while
emerging market economies face mixed market conditions.
In their joint statement following a February 7-8 meeting in Ottawa,
the ministers said they think Argentine authorities have taken "steps
in the right direction" in their recent moves to end that country's
economic crisis. The ministers said they encourage Argentine
authorities "to continue to work closely with the International
Monetary Fund (IMF) and the international community on a financially
and socially sustainable economic reform program that will enhance
prospects for growth and future foreign investment."
The world's poorest countries continue to face difficult challenges,
the ministers noted, and they said they discussed ways to enable these
countries to benefit more from global economic integration.
A major topic of the meeting was blocking terrorist financing, an
effort initiated in October 2001. "Our commitment to this objective
remains resolute and the international community has demonstrated its
strong support," the statement said. While progress has been made, the
statement said, further action is required.
Following is the text of the G-7 ministers statement:
(begin text)
Statement of G-7 Finance Ministers and Central Bank Governors
We met last night and today to discuss the global economy, the
importance of fostering development and our ongoing efforts to combat
the financing of terrorism.
In October 2001, we released an Action Plan to Combat the Financing of
Terrorism. Our commitment to this objective remains resolute and the
international community has demonstrated its strong support. While we
have made significant progress, further action is required, as set out
in the attached annex.
Since we last met, prospects have generally strengthened for resumed
expansion in our economies, although risks remain. We remain vigilant
and will each continue to take appropriate steps to promote a strong
and sustained recovery. We will continue to monitor exchange markets
closely and cooperate as appropriate. We welcome the successful
introduction of euro notes and coins.
Emerging market economies currently face mixed economic and financial
market conditions. They should continue to implement policies
conducive to investment and economic growth. We welcome as steps in
the right direction recent announcements by Argentine authorities. We
encourage them to continue to work closely with the International
Monetary Fund (IMF) and the international community on a financially
and socially sustainable economic reform program that will enhance
prospects for growth and future foreign investment.
Recent events have highlighted the importance of an improved,
predictable and fair framework, involving the private sector, to
prevent and resolve international financial crises. We are committed
to playing a leading role in improving this framework and will review
progress at our next meeting. In this regard, we welcome the IMF
management's proposal on sovereign debt restructuring as a useful
contribution that addresses some of the legal and practical obstacles
to timely and orderly debt restructuring.
We recognize the difficult challenges that the world's poorest
countries face in reducing poverty and raising living standards. We
explored ways to enable all countries to benefit more from greater
global economic integration. We will continue to work with other
donors to resolve outstanding issues on the 13th replenishment of the
International Development Association, in order to ensure that
additional resources for development are made available.
We underlined the need for more effective use of development
assistance and a commitment to sound policies, good governance and the
rule of law by all countries. We had a productive discussion of
development policy issues, including possible innovative ways to
mobilize additional domestic and external resources, trade and
external debt, and look forward to continued discussions at the UN
Financing for Development conference in Monterrey in March.
We welcomed Russia's strong growth and significant structural reforms,
and encourage further progress in strengthening the financial sector,
improving corporate governance and the investment climate, and
combating terrorist financing. We agreed on the importance of Russia's
early accession to the World Trade Organization (WTO).
Action Plan: Progress Report on Combating the Financing of Terrorism
G-7 countries have been joined by over 200 other countries and
jurisdictions in expressing support for the fight against terrorist
financing. Our October 2001 Action Plan to Combat the Financing of
Terrorism contributed to this international effort by setting out
clear priorities: vigorous application of international sanctions,
including the freezing of terrorist assets; rapid development and
implementation of international standards; increased information
sharing among countries; and enhanced efforts by financial supervisors
to guard against the abuse of the financial sector by terrorists.
Significant results have already been achieved. Since September 11,
almost 150 countries and jurisdictions have issued orders to freeze
terrorist assets, and over $US 100 million has been frozen worldwide.
Each G7 country is implementing UN Security Council Resolution 1373
and has signed and is committed to ratifying the UN Convention for the
Suppression of the Financing of Terrorism. The Financial Action Task
Force (FATF) has agreed to a set of Special Recommendations on
Terrorist Financing and is implementing a comprehensive action plan
encouraging all countries to adopt them. All G-7 countries have
established or are in the process of establishing Financial
Intelligence Units (FIUs) that will facilitate the sharing of
information on money laundering and terrorist financing. We have also
all established mechanisms to share information relating to the
tracking of terrorist assets.
Continued success requires even closer cooperation and an intensified
commitment. We now set forth the following steps to further advance
the global fight against terrorist financing.
To enhance international coordination in the freezing of terrorist
assets, we will develop a mutual understanding of the information
requirements and the procedures that different countries can use to
undertake freezing actions. We will also develop key principles
regarding the information to be shared, the procedures for sharing it,
and the protection of sensitive information. We will also work with
other countries to identify jointly terrorists whose assets would be
subject to freezing. We will continue to review our institutional
structures to ensure that they facilitate the international flow of
information necessary to identify, track, and stop the flow of
terrorist funds. In this regard, we support the Egmont Group's work on
improved information flow among FIUs.
The G-7 are committed to fully implementing by June 2002 the FATF
standards against terrorist financing. We urge all countries to accept
the FATF's invitation to take part in a self-assessment and to commit
to the rapid implementation of the standards. We look to the FATF, IMF
and the World Bank to quickly complete their collaborative work on a
framework for assessing compliance with international standards,
including all FATF recommendations, against money laundering and
terrorist financing. We urge all countries that have not done so by
February 1, 2002, to implement the measures set out in the November
2001 Communiqué of the International Monetary and Financial Committee
of the IMF, and look forward to the IMF's report to the spring meeting
of the Committee on all issues raised by the Communiqué. We urge the
Basle Committee on Banking Supervision to review its enhanced customer
due diligence standards for banks to ensure that they address
terrorist financing, and the Financial Stability Forum to review its
role in combating terrorist financing, including in relation to
offshore financial centres.
We look forward to the quick implementation of the IMF and World Bank
plan to provide increased technical assistance for measures to combat
money laundering and terrorist financing in coordination with the
FATF, regional FATF-style bodies, the UN and the Egmont Group. For our
part, G-7 countries are committed to providing technical assistance on
a bilateral basis as well as through these coordination mechanisms.
We recognize that continued success in the fight against terrorist
financing requires the close cooperation and unwavering commitment of
the broad international community. We therefore encourage all
countries to join us in implementing these measures.
(end text)

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