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G8 Finance Ministers' Meetings

Statement of G-7 Finance Ministers and Central Bank Governors, Ottawa
February 9, 2002

See also: Action Plan: Progress Report on Combating the Financing of Terrorism

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.

Source: G-7: Finance Ministers and Central Bank Governors

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