Editorial Note

The strength of the Latin-American region rests on its continuous modernization, with the purpose to support its economic development, accompanied by social peace for its societies. In this process the financial systems plays an essential role.

The recent U.S.-Latin America Private Sector Dialogue on AML/CFT sponsored by the Department of the Treasury of the United States of America, as well as the IV Regional Public and Private Sector Conference organized by the IADB, FELABAN and ASBA, both of which were attended by banking industry representatives and regulators from the region, promoted a fruitful exchange of opinions on regional concerns. These meetings have motivated me to share with you some considerations related with the challenges that our region’s nations are confronting and the need to increase the depth of the dialogue among regulators and between the region’s and the U.S. banking industry to confront these challenges.

As a result of the exchange of ideas in both events, celebrated this past June 29 and 30, in Washington, D.C., there is no doubt - and so it was reflected – of the commitment of our countries to prevent and combat money laundering and terrorism financing as well as any other crime that will threaten their financial and economic health.

Among the proposals made at the June 29th dialogue was a proposal by the Superintendence of Financial and Exchange Institutions from the Argentinean Republic for a Regional Agreement to prevent and combat the mentioned crimes through the training of experts or the organization of specialized inspection groups on anti-money laundering and combating the financing of terrorism, to avoid undesirable effects on the safety and soundness of our banking systems and on our region’s economies.

The specific issues affecting the Region, as reflected in the surveys implemented by FELABAN and the Argentinean Central Bank this year, are related with the increasing effects on the correspondent banking services in Latin America, which due to the sector’s complexity and the events that have caused fundamental changes in the financial systems controls.

We must recognize the efforts made by the industry, responsibly assuming the new costs generated to cover their due diligence processes, contract of specialized personnel, promotion of continuous training, implementation of internal and external audits of compliance controls, implementation of technological tools, among others, all needed to fence off the local and international delinquent’s threats, with which we agree as supervisors to be necessary, the contrary could result on undesirable consequences.
The above-mentioned leads us to confirm that our countries are clear in their obligations, in this difficult times we live in, to reiterate their commitment to combat and prevent money laundering and terrorism financing schemes, albeit the higher costs that the implementation of these efforts require. In fact, it must not be forgotten that these costs are transferred to the financial markets clients, which may increase the costs of their economies and decrease the available resources that could be used in endeavors of social character.

Because of the above, it is important that the regulators and supervisors of the region increase the depth of their dialogue in relation to these challenges. This would avoid duplication of efforts in the implementation of regulations and procedures that could hinder economic development and would optimize the use of the resources destined to combating and preventing the referred crimes; thus, avoiding measures that negatively affect our countries. The latter could be done through the strengthening of our ongoing regional cooperative efforts.

Panama, July 6, 2006.

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