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WASHINGTON – Yesterday, Secretary of the Treasury Janet L. Yellen met with Treasurer Jim Chalmers of Australia on the margins of the 2024 Annual Meetings of the International Monetary Fund and the World Bank. Secretary Yellen discussed international tax issues, and she underscored the importance of working with allies and partners like Australia to develop diverse, secure, high-quality, and sustainable supply chains for critical minerals.

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PARIS – Today, the Financial Action Task Force (FATF)—the global standard-setting body for anti-money laundering and countering the financing of terrorism and proliferation of weapons of mass destruction (AML/CFT/CPF)—concluded its first plenary under the Mexican presidency. The plenary marked the completion of the body’s fourth round of mutual evaluations, furthered ongoing work on financial inclusion, and launched efforts to improve global understanding of evolving terrorist and proliferation financing risks. 

“The United States commends the FATF’s accomplishment of raising the bar of all of its members’ compliance with international standards designed to fight financial crime,” said Secretary of the Treasury Janet L. Yellen. “In the next round of mutual evaluations, the United States and all members of the FATF Global Network must work to make our systems more effective in curbing illicit finance generated by crimes that victimize our citizens, undermine governance, and facilitate corruption.” 

The Plenary adopted the mutual evaluation reports of Argentina and Oman, marking the final reviews in the fourth round of FATF-led assessments. The FATF and its global network are close to completing the assessments of more than 200 of its members under the global AML/CFT/CPF standards on how effectively they achieve results in preventing illicit finance.  

Finally, the FATF discussed continued efforts to improve understanding of terrorist financing risks in an effort to prevent terrorist financiers from exploiting the global financial system. In response to growing global proliferation concerns, the FATF is working to help governments and the private sector evaluate weapons of mass destruction financing risks and better combat sanctions evasion schemes.

The FATF will initiate a public consultation in the coming weeks on potential revisions to its standards to further promote financial inclusion. The policy objective of the proposed revisions is to incentivize countries to understand areas of lower risk in addition to higher risk, and where appropriate, to implement simplified due diligence measures, promoting a more inclusive financial system with adequate safeguards.

Beginning this year, FATF members, including the United States, are preparing for the fifth round of mutual evaluations. The Treasury Department continues to pursue AML/CFT reforms in advance of the U.S. FATF mutual evaluation. The FATF assessors are expected to conduct an onsite evaluation of the U.S. AML/CFT regime in early 2026. 

Click here to read the Outcomes of the FATF Plenary, 25 October 2024.

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WASHINGTON – Today, Secretary of the Treasury Janet L. Yellen met with Minister of Finance Mehmet Şimşek and Central Bank Governor Fatih Karahan of Türkiye on the margins of the 2024 Annual Meetings of the International Monetary Fund and the World Bank.  Secretary Yellen commended Türkiye’s commitment to strong and predictable economic policies, which have driven a marked improvement in Türkiye’s economy and helped to put inflation on a downward path. Secretary Yellen and Minister Şimşek also discussed the importance of sanctions compliance and preventing abuse of the Turkish financial system by sanctions evaders and terrorist groups.

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WASHINGTON – The United States and the People’s Republic of China held the sixth meeting of the Economic Working Group (EWG) in Washington on the sidelines of the IMF-World Bank Annual Meetings on October 25th, co-led by Jay Shambaugh, Under Secretary for International Affairs at the U.S. Treasury, and Liao Min, Vice Minister of Finance at China’s Ministry of Finance.

The two sides discussed recent macroeconomic policy developments in the United States and China, including China’s recently announced stimulus measures. The two sides also discussed areas of cooperation including how to support low-income countries facing liquidity challenges. The U.S. side continued to raise concerns related to China’s industrial overcapacity and its impact on U.S. workers and firms. 

U.S Secretary of the Treasury Janet L. Yellen also received a brief update from the EWG on its discussions. She emphasized the importance of the EWG as a resilient channel of communication between the U.S. and China.

The EWG is one of two working groups formed by Secretary Yellen and Vice Premier He Lifeng of the People’s Republic of China last September. The EWG reports directly to Secretary Yellen and Vice Premier He. 

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WASHINGTON – Today, Secretary of the Treasury Janet L. Yellen met with Canadian Deputy Prime Minister and Minister of Finance Chrystia Freeland on the margins of the 2024 Annual Meetings of the International Monetary Fund and the World Bank.  Secretary Yellen outlined recent U.S. budget support for Ukraine and also provided an update on next steps in following through on G7 Leaders’ commitment to implement the Extraordinary Revenue Acceleration (ERA) Loans initiative. Secretary Yellen also discussed international tax issues.

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WASHINGTON – Today, the United States and Australia co-hosted the Pacific Banking Forum Roundtable to address de-risking and the decline of correspondent banking relationships in the Pacific.  This meeting of key public- and private-sector stakeholders was a direct deliverable from the Pacific Banking Forum (PBF) held from July 8-9 in Brisbane, Australia.  Acting Under Secretary for Terrorism and Financial Intelligence Brad Smith convened the Roundtable, underscoring the promotion of financial inclusion, preservation of correspondent banking relationships, and implementation of effective anti-money laundering and countering the financing of terrorism controls.  Citing the Treasury Department’s 2023 De-risking Strategy, Acting Under Secretary Smith highlighted the important role for public and private sector collaboration and collective action – such as the PBF – as the most effective path to maintain and expand banking relationships.  Roundtable participants included senior officials from Pacific Island countries, the Pacific Island Forum Secretariat, Australia, New Zealand, Japan, Canada, as well as representatives from international financial institutions, multilateral development banks, commercial banks, and bank regulators.  Participants shared updates on progress toward commitments made following the PBF meeting in July.  The PBF is an initiative launched by President Biden and Prime Minister Albanese in October 2023 during the Prime Minister’s State Visit committing the United States and Australia to support sustainable access to banking services in the Pacific.

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As Prepared for Delivery 

Good afternoon, it is great to be here with you today, and I am pleased that all of you were able to join us.  For those who do not know me, I am Brad Smith, the U.S. Treasury’s Acting Under Secretary for Terrorism and Financial Intelligence.  My predecessor, Brian Nelson, attended the Pacific Banking Forum in Brisbane in early July.  The offices I lead deploy the United States’ financial intelligence, regulatory, enforcement, and accountability tools to combat terrorist financing, money laundering, and other urgent illicit finance threats.  This work is critical to safeguarding the U.S. and international financial systems from those who misuse it and undermine U.S. national security.  It is one of the Treasury Department’s core missions, along with advancing a strong economy that promotes growth, fairness, and opportunity for all.

I am joining you here today to discuss how these two missions intersect, and how we can collectively take steps to safeguard our financial systems while also promoting greater financial inclusion.  Before I begin, I want to thank all of you for the hard work your governments and teams have dedicated to this important effort and making time to be here during a busy week. I would especially like to thank our Australian counterparts for co-hosting this event with us. They have been an excellent partner in this endeavor, and I really appreciate all their efforts.

As you all know, financial inclusion is a critical driver of economic development, stability, and opportunity.  A big piece of promoting financial inclusion is access to correspondent banking.  Correspondent banking bolsters international trade by reducing financial friction and allowing for quick and lower-cost transactions across borders.  At the macro-level, correspondent banking facilitates large-scale foreign investment, including financing for infrastructure and development projects, while also helping countries make their financial systems more resilient.  And at the micro-level, correspondent banking helps individuals more easily and affordably send funds—including remittances—across borders.  Yet in recent years, we have seen the Pacific region experience the fastest withdrawal of correspondent banking relationships in the world.  Limited profitability, higher costs, lack of scale, and uneven anti-money laundering and countering the financing of terrorism (AML/CFT) effectiveness have been identified as critical drivers of de-risking in the region.

The United States is committed to an Indo-Pacific that is free and open, connected, prosperous, secure, and resilient.  A key part of achieving those goals is making sure people and businesses in the region have access to the global financial system.  This is why President Biden and Prime Minister Albanese committed to working with Pacific Island countries and why the Pacific Banking Forum was created: to convene public and private partners, to understand the critical issues, and to support engagement between governments and correspondent banks.  I want to commend the important pledges that PBF participants made in July to advance their work to address the decline of correspondent banking relationships in the region.

Since the Brisbane meetings, delegates from the PBF have continued to explore solutions to address the decline in correspondent banking relationships, including visits to the region, conversations with local Pacific banks, and engagements with development partners to coordinate efforts.  It is important that we are all reconvening.  We should use this opportunity to reaffirm the commitments we made in July and provide updates on our efforts since then.  Having the Pacific Islands representatives here allows us to hear a regional perspective on current developments with regards to correspondent banking and financial inclusion.  Having the financial institutions and regulators participate is essential for us to better understand the challenges and opportunities in restoring and expanding financial inclusion the region.  Donors and IFI participation are critical to help deliver solutions.  One of the potential solutions is being developed by the World Bank, which has recently launched a project to provide an emergency backstop for CBR services and to explore long-term solutions to de-risking.  We strongly support these efforts.  Later on, we will hear an update from the World Bank on this project.  I would like to specifically thank them for participating and agreeing to share with us their progress on this important effort.

For our part, I’m proud to note that President Biden recently announced that the U.S. intends to contribute $1.5 million to the World Bank’s efforts to strengthen correspondent banking in the region, and I am pleased to hear that other countries including Australia and New Zealand will also make similar contributions.  At Treasury, we will continue our work with partners in this vital region.  We have worked with the Asia Pacific Group on Money Laundering on technical assistance missions.  Treasury also continues to work within the U.S. government to find technical assistance opportunities in the region.  We have also engaged with U.S. banks and regulators to further the discussion on how better to support the growth of correspondent banking in the Pacific. 

And we continue to work on making our own AML/CFT regulatory and supervisory regime more effective and risk-based, and to deliver on our de-risking strategy—including through ongoing FinCEN rulemaking that revises financial institutions’ AML/CFT program requirements.  This rulemaking effort will help ensure that financial institutions do not take a “one-size-fits-all” approach to customer risk.  As our de-risking strategy highlights, collaboration and collective action among public and private stakeholders remains the most effective path to prevent the categorical termination of banking relationships.  Today is an opportunity to do just that.  Your experience and insights will help inform our next steps on this important issue, and we look forward to the conversation today.  Thank you. 

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As Prepared for Delivery 

Minister Armand, it is a pleasure to meet with you as you begin your role as France’s Minister of Economy and Finance. 

I look forward to continuing the deep and longstanding cooperation between the United States. and France, including advancing our joint work on shared international economic priorities. That begins with our steadfast commitment to support Ukraine in its fight against Russia. We are committed to working together to unlock the value of immobilized Russian sovereign assets to help secure economic and security assistance for Ukraine. This will build on the financial support that both of our countries have provided to Ukraine.

We also continue to coordinate on strengthening our sanctions against Russia to limit its revenues and disrupt its ability to get the critical goods it needs, including through third countries like China. And we hope to continue to collaborate with allies, including France, to raise concerns about the risk to countries and businesses of negative spillovers from China’s macroeconomic imbalances, which are leading to overcapacity in key industrial sectors.

We also look forward to building on our close cooperation to continue reforming the international financial institutions so that they more effectively meet the needs of emerging markets and developing countries, making the world more prosperous and stable for all of us.

I look forward to discussing these and other priorities in my meeting with Minister Armand today.

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WASHINGTON – Yesterday, Secretary of the Treasury Janet L. Yellen met with Finance Minister of Japan Katsunobu Kato on the margins of the 2024 Annual Meetings of the International Monetary Fund and the World Bank. Secretary Yellen congratulated Minister Kato on his appointment and affirmed the importance of the United States’ partnership with Japan on addressing global challenges. She underscored the close relationship between the United States and Japan as one of our strongest allies and largest trading partners. In particular, the Secretary highlighted Treasury’s cooperation with Japan on further strengthening the international financial institutions and combating Russia’s illegal war against Ukraine.

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