Finance Ministers See Possible Common Ground With U.S. on Fighting Terror Funding
Global finance ministers, seeking common ground with a Trump administration that has threatened to shake up Washington's traditional trade and geopolitical relationships, are looking to work closely with the new administration on a top priority for the White House: Combating terror finance.
Finance ministers meeting here for a semiannual conference on the global economy are hoping that shared interest could help build diplomatic bridges to an administration that has criticized trade partners and global institutions such as the International Monetary Fund.
U.S. Treasury Secretary Steven Mnuchin named fighting financing for terror a core part of his mandate.
"Targeting and dismantling the financial networks of terrorist organizations is a top U.S. priority, and improving anti-money-laundering and counter terrorist financing systems is critical to this goal," the secretary said Friday in prepared remarks to the IMF's governing board. "It is really some of the most important work we have done and has been instrumental to what we're doing in North Korea, in Syria, in Iran and in many other parts of the world," Mr. Mnuchin said Thursday at an Institute of International Finance policy summit.
Foreign governments see that priority as an opportunity to promote cooperation with an administration that sometimes strikes an adversarial stance.
Financial regulators overseas are critical in not only helping the U.S. enforce the sanctions Washington levies against other countries, but also helping shore up the global banking system against terror financing, tax dodging, corruption and cash transfers by criminal networks. When the U.S. was ramping up pressure on Iran to contain Tehran's nuclear ambitions, President Barack Obama's top Treasury officials shuttled around the globe urging other countries to enforce the sanctions, penalize banks that violated them and prevent circumvention.
"As we all know, this is an issue of major importance," said German Finance Minister Wolfgang Schäuble Friday in his role as the chairman of the Group of 20 largest economies.
Indonesian Minister of Finance Sri Mulyani Indrawati said in an interview she is asking the U.S. to support its bid to join the Financial Action Task Force, an international body that develops policies to combat terrorism financing, when she meets with Mr. Mnuchin on the sidelines of this week's IMF meeting.
Indonesia had been blacklisted by FATF until 2015 due to money laundering and terrorist financing problems. But it's an issue that matters to Jakarta: The country has suffered a series of terror attacks over the years.
"U.S. support is going to be critical," said Ms. Sri Mulyani, a former World Bank managing director. "Membership of Indonesia, which has the biggest Muslim population in the world, is really going to strengthen the [task force]," she said.
Indonesia is one of 16 countries targeted in a new Trump administration report under way studying the causes of U.S. trade deficits. The report is expected to lay the groundwork for punitive trade actions.
Ms. Sri Mulyani said, besides combating terror-financing, she will stress free trade between the U.S. and Indonesia is "a win-win relationship."
"We will continue bringing this message that strengthening and building a good relationship based on mutual interests is serving both countries, " she said.
As an indication of both the importance of the issue to the U.S. and other governments' using the matter as common ground, the matter was highlighted in every Treasury brief on ministerial meetings between the secretary and his counterparts.
After Mr. Mnuchin's meetings this week with finance chiefs from Saudi Arabia, Vietnam, Mexico and Singapore, the Treasury Department noted cooperation on countering illicit finance. Meetings with officials from Canada, France, Italy and other nations have also featured the reference of late.
The IMF, which has been a focus of administration criticism, is also making the case to the Treasury Department, saying it helps countries set up and maintain financial systems that can foil terror financing.
Speaking to reporters on the sidelines of the spring meetings of the IMF and World Bank in Washington, U.K. Treasury chief Philip Hammond said tackling terror financing is on the agenda.
"Obviously we support multilateral initiatives on counterterrorist financing," Mr. Hammond said Friday. "I think there is an appetite among G-20 and G-7 partners to look for areas where we can demonstrate -- by actions rather than words -- to the new U.S. administration how these multilateral organizations can help the U.S. administration achieve its objectives."
Friday, in his speech prepared for the IMF, Mr. Mnuchin said he welcomed its efforts to strengthen member countries' regulatory and supervisory frameworks with respect to anti-money-laundering and countering terror financing. "It is also imperative that the IMF be a leader in fighting corruption," he said.
Jason Douglas contributed to this article.
Write to Ian Talley at email@example.com and Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
April 21, 2017 18:48 ET (22:48 GMT)