US, Turkey vow to jointly fight ISIL financing

ISTANBUL

Turkish Deputy Prime Minister Ali Babacan and U.S. Treasury Secretary Jack Lew shake hands during the G20 finance ministers and central bank governors meeting in Istanbul Feb 10, 2015. REUTERS Photo

The United States and Turkey have agreed to conduct a joint effort to cut the funds financing the Islamic State of Iraq and the Levant (ISIL), while G-20 member states have also committed to further cooperation against terror financing.

Amid the onslaught in Iraq and Syria by well-financed ISIL jihadists, the G-20 also committed to “deepen our cooperation” in the fight against terrorism financing, according to the summit’s communiqué, Agence France-Presse reported.

This would be done by exchanging information and “freezing terrorist assets,” said the document.
The communiqué urged “all countries to speed-up their compliance with the relevant international standards” in this respect.

It said the Financial Action Task Force (FATF) against money laundering and similar bodies should “put a specific focus on financing of terrorism.”

They should also develop guidelines to improve the transparency of payment systems, in order to lessen the risk they are used for the financing of terrorism and money laundering, it said.

The G-20 asked for a report by October 2014 on “proposals to strengthen all counter terrorism financing tools.”

In line with the measures and thanks to the steps taken to fight against dirty money, Turkey was removed in November 2014 from the “grey list” of countries drawn up by the 36-member FATF, a money-laundering watchdog, Finance Minister Mehmet Şimşek said in December 2014.

The Financial Crime Investigation Board (MASAK) signed cooperation deals with 43 countries in the fight against money laundering and is also a member of the EGMONT Group, which helps facilitate the exchange of information.

In the meeting, the U.S. and Turkey also agreed that boosting near-term domestic demand should be a top priority for the G-20 under Turkey’s presidency in 2015 and that all parties should adopt a “pragmatic way forward” over Greece, as reported by Reuters.

The G-20 group of leading economies underlined the importance of monetary and fiscal policy if necessary to combat the risk of persistent stagnation, according to a draft communique obtained by Reuters.

“Accordingly, we will continuously review our monetary and fiscal policy settings and act decisively, if needed,” the draft document said.

The draft welcomed the favorable outlook in some key economies but gave a gloomy assessment of the global economy as a whole, saying growth was uneven and trade growth was slow.

“In some countries, potential growth has declined, demand continues to be weak, the outlook for jobs is still bleak, and income inequality is rising,” it added.

It noted slow growth in the eurozone and Japan and said some emerging market economies were slowing down, while some low-income developing countries were seeing continued strong growth but with some recent moderation.

The draft communiqué welcomed the European Central Bank’s (ECB) quantitative easing, despite German concern about the policy, and said the move would further support recovery in the Eurozone.

In a nod to expectations that the U.S. Federal Reserve will raise interest rates, the draft said some advanced economies with stronger growth prospects were moving closer to “policy normalization.”

But it cautioned: “In an environment of divergent monetary policy settings and rising financial market volatility, policy settings should be carefully calibrated and clearly communicated to minimize negative spillovers.”

It said the sharp decline in oil prices would provide some boost to global growth but noted that the outlook for prices remained uncertain and said the G-20 would monitor commodity markets closely.

“The United States is doing well, [as is] the U.K., Canada and Australia, but generally, global growth is disappointing, and there are some regions that are really not doing very well at all, and there are systemic risks in some countries,” Canadian Finance Minister Joe Oliver said yesterday, amid growing concern about Athens’ determination to ease austerity measures. A major focus during the G-20 meeting has been Greece, with Athens seeking a new debt arrangement and demanding a reversal of austerity, but Oliver said eurozone reforms had diminished the risks that were confronted previously.

At the two-day summit in Istanbul, the U.S. also strongly underlined the need to stick to commitments on exchange rate policy, urging countries not to use currencies to boost their exports, a U.S. Treasury official said yesterday.

“[Treasury] Secretary [Jack] Lew strongly emphasized ... that we are highly focused on ensuring that U.S. workers and firms play on a level playing field and no country should use their exchange rate to increase exports,” the official said.