Opening Speech of
Dr. Joseph Torbey
Chairman, Union of Arab Banks
To the
Second US-MENA PSD Conference
On AML-CFT
New York
11-13 December 2006
Ladies and Gentlemen,
Dear Attendees,
It is both a pleasure and honor for us at the Union of Arab Banks to organize this Second US-MENA PSD Conference on Anti-money Laundering and Combating Financing Terrorism (AML-CFT) in the United States of America, and in the very premises of the Federal Reserve Bank of New York.
On behalf of the Union of Arab Banks and MENA banking leaders, I thank the FED for hosting our meeting today. I also thank the U.S. Department of the Treasury for supporting our event. My appreciation also goes to our co-organizers; I mean ABA, ABANA and MENAFATF.
The synergized efforts of this team of international and regional bodies in organizing this meeting today, for the second time this year following our first event in Cairo in March 2006, clearly reflects the need to conduct an ongoing dialogue on the AML-CFT issue in line with the growing complexity and sophistication of money laundering and terrorist financing activities around the world. It also reflects a growing concern by the international and U.S. communities to deeply involve the MENA banking and financial sectors in the ongoing international combating efforts.
Ladies and Gentlemen,
All of us here would agree that money laundering is a considerable problem today, not just for the government, but also for the banking industry and for the community as a whole. Today’s concerns with the war on terrorism mean that the stakes are higher still.
Certainly the amount of money laundered globally is huge, perhaps as high as 5% of the world’s output. Its large scale is one of the reasons to be concerned about.
But there are other reasons too. Money laundering is not just about financial crime, it is about all crime, and about the most threats to the well being of every society-drug abuse, prostitution, people trafficking, terrorism and others. Anti-money laundering is directed at improving the lives of ordinary people.
Money laundering in all its aspects and enormous size, makes it so important for the Government to work effectively and in cooperation with the wide range of professionals and regulators.
For this reason, I welcome so warmly the US-MENA PSD Initiative and the ongoing conferences and meetings. The Initiative is giving us space and time for these vital issues to be addressed, and for strengthening our contribution to the fight against money laundering and terrorist financing.
We, at the Union of Arab Banks, are deeply supportive to this US-MENA PSD Initiative, because we believe that the private sector in general, and the banking and financial sector in specific, should be a key player in the fight against money laundering and terrorist financing, simply because banks are the entities which deal with its multi-facet customers. This means that the Government must initiate an effective working partnership with the private sector. Working in partnership and shared ownership are key themes of the needed vision for the AML-CFT regime around the globe.
The Union of Arab Banks has long been a true supporting arm for the Arab financial industry in raising awareness related to effective AML and CFT among Arab bankers, in training these bankers on effective control and defensive tools and mechanisms, in promoting the exchange of knowledge and experiences among them, and assisting some Arab financial authorities in drafting their AML-CFT legal and regulatory frameworks.
Ladies and Gentlemen,
I believe that the international financial community, through effective cooperation, has succeeded in building a strong foundation for fighting money laundering and terrorist financing. The FATF’s international standards, and the domestic AML regulations, among others constitute the legal backbone for fighting illegal financial activities. We should be proud of what we have been able to achieve on this front. We recognize that the financial industry continues to put a great deal of effort into implementing money laundering controls.
As far as the MENA region is concerned, I can comfortably say that almost all countries of our region have been devoting a great deal of resources on all fronts to strengthen their financial markets’ defense against illegal financial activities, especially money laundering. Today, most countries of the region have in place a robust, coherent framework of international standards, domestic controls and suitable enforcement mechanisms.
Our countries are seeking to work with other nations to ensure effective and balanced international standards, and emphasize the focus on informal and non-traditional methods of money laundering. Our countries are determined to reduce the pool of criminal funds, and continue to promote international cooperation and information sharing in money laundering investigations and actions.
It is not surprising that no Arab country is placed today on the FATF’s “black list” of non-cooperative countries in AML-CFT. Our domestic monetary authorities and the financial sectors themselves are very serious about keeping their markets “clean” and highly defensive against illicit cash.
Closer to home, our monetary and financial authorities and our banking sectors are determined to ensure effective domestic controls are in place, to make it harder for criminals to profit from criminality, and hence increase the risks of criminals being caught and persecuted.
Such controlling actions are important for protecting the reputation of our economies and financial systems, because we believe that the competitive position of our financial systems depends upon good reputation of integrity and honest dealing. We all know that several countries of the region have established key regional financial centers like Dubai, Qatar and Bahrain; and yet some other countries are on the same way like Saudi Arabia, Lebanon and Kuwait.
Ladies and Gentlemen,
To further advance the fight against money laundering and terrorist financing, I believe we all have to strengthen our commitment to ensuring a balanced system of AML-CFT controls. This means that we have to focus our efforts depending on the level of risk at stake, and enforce controls in a cost effective manner. We also need to ensure that AML-CFT controls are subjected to rigorous regulatory impact assessments, and improve the quality of our cost-benefit analysis on the money laundering systems in place.
We certainly want a system that combines a high-level legal framework with strong self-regulatory components. In making this aim a reality, domestic financial authorities must continue to work closely with the regulated sector, particularly those new members of the regulated sector. This is more than a request for cooperation from the financial industry. It is an acknowledgement that the government needs to improve communication with the regulated sector, in order to strengthen the fight against money laundering and terrorist financing on the levels of policy, detection and enforcement.
In closing my speech, I would say that although the Arab AML-CFT systems are still nascent, yet giant leaps have been undergone in our countries to continuously upgrade domestic regimes in line with the internationally-acknowledged standards and practices. We are relying in our endeavors on the work and assistance of the MENAFATF, and the support of the U.S. Department of the Treasury and international community, to develop the culture, rules and practices of AML-CFT systems in our countries.
I wish this meeting all success in achieving its desired objectives, and wish this dialogue to continue and be always productive to ensure the interests of our financial institutions and economies in enjoying stability and prosperity.
Thank You.
