45th Plenary of the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL)

15 September 2014, Strasbourg



Events since you last met in plenary in April have further underlined, if that were necessary, the importance of the work MONEYVAL does.

The barbaric murder of British aid worker David Haines this weekend, following that of his two American fellow hostages earlier, and related recent events in the Middle East remind us how dreadful terrorism still is.

Financing of terrorism remains a global priority as financing terrorists threatens the security of all citizens worldwide. I would therefore like this morning once again to reiterate how MONEYVAL’s work is central to the objectives and priorities of this organisation in an increasingly dangerous world.  Your work complements and underpins the Council of Europe’s action against corruption, human trafficking and other economic crime, and, of course, of terrorism.  A major conference on fighting terrorism and organised crime will take place in Malaga next week, bringing many stakeholders, including MONEYVAL, together.

We are now all too well aware of the growing threats posed by the so-called “Islamic State” or ISIL and its supporters. As a result, the United Nations and European Union have very recently taken rapid action to add six new names to the Al-Qaeda sanctions list. MONEYVAL in its future monitoring will need to be assured that these new ISIL-related designations are known to your financial institutions, and that they are actively checking their databases for matches to ensure that relevant assets in accounts in MONEYVAL States and territories are frozen.  I understand that you will come back to this important issue on Wednesday morning under agenda item 20.

MONEYVAL’s work also, uniquely in this organisation, helps to protect the international financial system itself – for those that have access to it. But there are many people in States and territories in Europe (and globally) that are still, for various reasons, excluded from the financial system. This has both social consequences as well as consequences for anti-money laundering and countering the financing of terrorism. I shall say more about this issue in a moment, as I am very pleased that you are engaging with this issue this week.

But before that, I would like to say a particular word about the report, presented by the Secretary General in May at the request of the Committee of Ministers, analysing in depth the state of human rights, democracy and the rule of law in Europe. The Secretariat has sent you links to this published document and I commend it to you. It covers all major aspects of the Council of Europe’s work in each key area – including unresolved problems and continuing challenges. Quite rightly, there is a chapter in the report (in the Justice and Rule of Law section) on money laundering and the Executive Secretary will say word about that in a moment.

The Secretary General’s report is particularly clear about the importance of monitoring and our monitoring bodies in the Council of Europe. Monitoring is one of the great strengths of this organisation. It is an essential tool for helping member States to identify and remedy shortcomings in their compliance with Council of Europe and international standards. Indeed, the reports of MONEYVAL, GRECO and some of the other monitoring bodies are vital blueprints for much of this organisation’s co-operation activities.

But the Secretary General’s report is not complacent and I think it is important that all monitoring bodies reflect on all the observations in the report about our monitoring mechanisms.

Some of his comments are particularly relevant to MONEYVAL as you make the transition from your 4th round to the 5th round of evaluations and revise (again) your Rules of Procedure for the new round of global evaluations.

The Secretary General notes that monitoring cycles are occasionally too long and that some monitoring bodies lack the capacity for rapid reaction – or, if they have that capacity, that it is rarely used.

There is no doubt that MONEYAL’s next evaluation cycle will be long. This is inevitable when you are examining 33 jurisdictions in the technical depth required by complex international standards, and assessing how effective States and territories are in their implementation in key areas.

The cycle for your next round will take this body up to 2021/22 at least, given present resources. I know that a broadly similar timescale is envisaged for FATF. So you will be locked into a lengthy round of evaluations. While you will need to follow up, for as long as it is practicable, the outcomes of the 4th round, the 5th round timetable means that many countries will not have onsite evaluations now for several years.

I think that MONEYVAL is stronger for having established last year, after the experience of the Cyprus Special Assessment, a clear, rules-based process for reacting to events in exceptional circumstances between plenary meetings, without imposing immediate Compliance Procedures. I am sure that MONEYVAL will not shy away from using this new procedure where it is necessary. In this respect MONEYVAL is a model for other CoE monitoring mechanisms.

But, given the length of your next evaluation cycle, it is equally important that you also have the flexibility to move evaluations up the order if there is a compelling reason to do so. I note that this is referred to in your timetable for the next round of evaluations, and I urge you to ensure that this principle is also reflected in your further revisions to the Rules of Procedure. I am sure that the Bureau will keep this principle in mind continuously during the next evaluation round and also take rapid action in exceptional circumstances if necessary. With both of these possibilities available, MONEYVAL can remain at the cutting edge of proactive and responsive Council of Europe monitoring mechanisms.

So - to this plenary. You have, as usual, a very full agenda including one evaluation report, compliance reports and also the all-important follow ups to evaluation reports.

Having led the High Level Mission to Bosnia and Herzegovina earlier this year under your Compliance Procedures, and corresponded with Bosnia and Herzegovina Ministers, I am following subsequent developments very closely. I will listen with interest to the latest report from the delegation on progress. We have information from all MONEYVAL States and territories about the actions they have taken under the Public Statement which MONEYVAL unfortunately was obliged to make on 1 June. States and territories in MONEYVAL (and other bodies and jurisdictions) have warned financial institutions of the risks identified by MONEYVAL in its public statement on Bosnia and Herzegovina. I understand there has been some progress on the legislative front in BiH since the last plenary. This plenary will need to think carefully about the next steps in the Compliance procedures if all the required legislation is not in place by the end of this week. You will also need to take final decisions on the projected 4th round onsite visit to Bosnia and Herzegovina later this year. As you will hear, the Bureau’s view is that this visit should go ahead, and Bosnia and Herzegovina has been invited to prepare for such a visit, pending your decision. We look forward to hearing from the delegation about the steps that are being taken by them in preparation for a 4th round visit.

As I mentioned earlier, I am pleased that MONEYVAL is engaging with the issue of financial inclusion. I am delighted to say that we will have the great honour this week of welcoming “my” Queen, in her capacity as the United Nations Secretary General’s Special Advocate for Inclusive Finance for Development, to discuss this highly relevant issue, for which she is a tireless champion on the global stage. You will have the opportunity in this session of discussing the results of the first MONEYVAL survey on financial inclusion in your States and territories.

I congratulate you, Mr Chairman, on taking forward this initiative and look forward with particular anticipation to that session on Wednesday afternoon, in which the Secretary General will also participate. The Chairman and Executive Secretary will explain later how this special session will be organised. But I can give you early warning now that everyone will need to be in their seats on Wednesday afternoon no later than 1.45, as Her Majesty will join us at 2pm sharp!

So, with that, Mr Chairman, ladies and gentlemen, I thank you for the important work your Committee continues to do and for the visibility and credit it brings to the Council of Europe as a whole.

Thank you for your attention and I wish you all a very successful and a very instructive autumn session.