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Anti-Money Laundering Toolkit

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ADB Policy on AML/CFT

1. Background

The Asian Development Bank (ADB) was one of the first multilateral development banks to address risks to financial sectors arising from money laundering through regional and country-specific assistance programs. These efforts included encouraging reforms in the context of financial sector-related programs in Indonesia and Vanuatu in 1998 and providing technical assistance (TA) to nine developing member countries (DMCs) from the Asia and Pacific region through regional TA in 2000.

Taking into account the events in the United States of 11 September 2001 and related developments at the international level, a working paper was discussed by ADB's Board of Directors on 13 September 2002. On 1 April 2003, ADB adopted a policy on its AML/CFT activities: Enhancing the Asian Development Bank's Role in Combating Money Laundering and the Financing of Terrorism ("Policy").

Under the Policy, ADB should focus its AML/CFT efforts on:

• assisting DMCs to establish and implement effective legal and institutional systems; increasing collaboration with other international and donor organizations;
• strengthening internal controls; and
• enhancing ADB staff capacity.

2. ADB Projects and TAs

In assisting the DMCs in developing and strengthening their AML/CFT regimes, the key activities are policy dialogues between ADB and individual DMCs in developing financial-sector and governance-related projects and TA (including regional TAs). At one level, these dialogues (and particularly the incorporation of AML/CFT-related components into reform programs) help the authorities to devise and implement AML/CFT policies. At another level, ADB staff adds value by sharing technical expertise and experience regarding international law and standards pertaining to AML/CFT requirements and as regards the application of these requirements (including in other DMCs in the region).

Examples of ADB Projects with AML/CFT components are:

• Banking Sector Reform Program Loan [ PDF ] (Lao PDR)
• Financial Governance and Social Security Reform Program Loan Phase I [ PDF ] (Indonesia)
• Financial Sector Program Loan [ PDF ] (Cambodia)
• Financial Sector Program (Subprogram II) [ PDF ] (Cambodia)
• Second Financial Sector Program Loan [ PDF ] (Viet Nam)
• Financial Markets Program for Private Sector Development [ PDF ] (Sri Lanka)
• Financial Market Regulation and Intermediation Program [PDF] (Philippines)
• Accelerating Economic Transformation Program (Subprogram I) [PDF] (Pakistan)

Examples of ADB TAs with AML/CFT components are:

• Capacity Building for Nonbank Financial Institutions and the Capital Market [ PDF ] (Vietnam)
• Capacity Building of the Legal Sector, view its Technical Assistance Report [ PDF ] (Vanuatu)
• Capacity Building for the Financial Sector and Capital Markets [ PDF ] (Vietnam)
• Capacity Building for Banking and Financial Management [ PDF ] (Cambodia)
• Strengthening the Anti-Money Laundering Regime [ PDF ] (Philippines)
• Establishing an Effective Anti-Money Laundering Regime [ PDF ] (Mongolia)
• Development of an Anti-Money Laundering Regime II [ PDF ] (Indonesia)
• Strengthening the Anti-Money Laundering Regime (Phase II)
  (Financed by the Cooperation Fund for Regional Trade and Financial Security Iniative) [ PDF ] (Philippines)
• Support to Implement the Anti-Money Laundering Decree [PDF] (Vietnam)
• Strengthening the Legal and Implementation Framework for Anti-Money Laundering [PDF] (People's Republic of China)

3. Other AML/CFT Activities

Within ADB, staff focus on strengthening and implementing internal control procedures, and enhancing staff capacity through developing knowledge-based products.

ADB also works closely with its counterparts, notably:

• the Financial Action Task Force;
• FSRBs such as the Asia-Pacific Group on Money Laundering and the Eurasian Group;
• the International Monetary Fund;
• the UN Counter-Terrorism Executive Directorate;
• the UN Office on Drugs and Crime; and
• the World Bank

4. Going Forward

In April 2008, a Board information paper was published. It reviewed ADB's AML/CFT activities between April 2003 and March 2008, including the achievements and lessons learnt, and identified priorities for ADB's future AML/CFT activities. The focus of ADB's work going forward under the Policy will be to:

• further AML/CFT developments in DMCs through continuing with calibrated interventions to support the efforts of the DMCs in meeting international standards, particularly with regard to the circumstances in the individual DMCs and in the region;
• continue collaboration with international organizations and donor agencies through coordinating efforts and sharing experiences with the DMCs and contributing to broader AML/CFT development from the regional perspective;
• continue enhancing and implementing internal control procedures; and
• ensure staff keep abreast of AML/CFT developments and disseminate relevant information for ADB staff capacity building to optimize the support provided to DMCs.

ADB's AML/CFT activities are carried out by staff in the regional departments, the Central Operations Services Office, the Controller's Department, the Office of the Auditor General, the Office of the General Counsel and the Treasury Department. Staff from the Office of the General Counsel serve as focal points for AML/CFT activities (contact persons: Rita O'Sullivan and Cheong-Ann Png).

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