February 29, 2008
hp-849

Remarks by Assistant Secretary
for Terrorist Financing and Financial Crimes Patrick M. O’Brien
at the Second Annual U.S.-Latin America Private Sector Dialogue
on Anti-Money Laundering and Counter-Terrorist Financing

MIAMI – Buenos Dias. Good morning, ladies and gentlemen. Thank you for your time and the opportunity to dialogue today with such a distinguished and diverse group.

I would like to thank the Florida International Bankers Association for hosting this event here in Miami, for their preparation and planning, and for their gracious hospitality. As always, you have done a remarkable job. I also would like to thank FELABAN, AsoBancaria, FEBRABAN, the Bankers Association for Finance and Trade, and the various regulators from the US and Latin America – including the Central Banks of Argentina and Brazil – for their support in making this event a reality. The associations play a key role in the success of the US-Latin America Private Sector Dialogue and we thank those here for participating in this important discussion.

Today marks the second dialogue of this kind between our regions, and clearly demonstrates our continued commitment to building lasting relationships that enhance competitiveness and economic prosperity in the Western Hemisphere. We recognize that implementing financial measures and complying with an array of regulatory requirements to protect the financial system from money laundering and other crimes creates significant challenges for the private sector. In Secretary Paulson's speech at the inaugural Americas Competitiveness Forum last year, he emphasized the need to support private sector growth in the Americas by ensuring, among other things, that commercial lenders are not unnecessarily constrained by burdensome regulations or bureaucracy. Building on this project, the Treasurer of the United States, Anna Cabral, hosted Mexican Finance Secretary Agustín Carstens and other Latin American leaders this month for a Workshop on Financial Inclusion, which addressed ways to improve the regulatory landscape and enhance financial security in the Americas.

The U.S. Treasury Department is actively engaged with regional banking regulators and supervisors to achieve these objectives. For example, US regulators collaborate closely with foreign counterparts in international forums such as the Basel Committee on Banking Supervision. The Treasury Department's Office of Technical Assistance provides bilateral and multilateral guidance on defining and promoting the adoption of best practices. Through the FDIC's visitor program, foreign regulators are able to learn about the U.S. banking system in order to develop and educate their staff back home and to exchange information.

These are just a few examples, but what they demonstrate is that regulators are continuously dialoguing with their foreign counterparts to address financial system abuses through proposed legislation and ongoing administrative and regulatory actions.

This dialogue – the Private Sector Dialogue – is a forum in which the private sector institutions get the chance to compare notes and share experiences and best practices. The Private Sector Dialogue is not about finding a regulatory fix, but about how the private sector – within the existing regulatory frameworks – manages risk.

The goal of the US-LA PSD is to promote dialogue between the financial institutions of the United States and Latin America, in order to:

• Raise awareness of money laundering and terrorist financing risks;
  
  
• Facilitate a better understanding of effective practices and programs to combat such risks;
  
  
• Strengthen implementation of effective AML/CFT controls; and
  
  
• Exchange information and improve understanding of business cultures and norms.

We recognize that public-private dialogue on AML/CFT is essential to promoting the transparency and efficacy of the global financial system. Regulators are present here today to listen and to provide perspective. There is no doubt regulators can be a valuable resource to this discussion. By participating in, and hearing the private sector exchange on key issues, they will be better informed in their regulatory efforts. However, it is the private sector that is on the front lines in implementing AML/CFT controls; it is the private sector that must manage risk and make tough compliance and business decisions on a day-to-day basis; and thus it is the private sector that must continue to drive this dialogue, aimed at enhancing a mutual understanding of real threats, improving best practices and enhancing business relationships. It is our hope and expectation that the ongoing dialogue among regulators will be deeply enriched by this, the Private Sector Dialogue … your dialogue.

With us today we have a collection of financial compliance experts and practitioners from the U.S. and the Latin American region able to share their expertise and address difficult questions about building effective AML/CFT regimes. Our challenge, opportunity and commitment have never been greater or more important. The threats to international peace and security and to the global financial system continue to evolve, but so does our ability to combat these threats through targeted financial actions and through cooperative anti-money laundering efforts. It is through initiatives such as this Private Sector Dialogue that we can best develop and apply our growing capabilities, to not only protect the financial system from abuse, but also utilize financial information and apply measures to attack those that threaten global peace and security.

An important goal for today's Private Sector Dialogue is to set the foundation for the 3rd PSD, scheduled to take place over the course of two days during September 2008 in Sao Paulo, Brazil. By that time, our friend, fellow PSD founder and President of the Brazilian Financial Intelligence Unit, Gustavo Rodrigues, will have assumed his role as President of the Financial Action Task Force (GAFI, in Spanish and Portuguese) – meeting this week in Paris. We are very excited that the GAFI will be led by a representative of Latin America, and we look forward to focusing on this region through Gustavo's leadership.

Now is an optimal time to maximize and deepen already strong Western Hemispheric relations, as the global spotlight is magnified on Latin America.

We have just six hours remaining to dialogue today and there is much to be accomplished. The agenda ahead of us will cover correspondent banking, as well as bank secrecy and the exchange of information. We will also have an opportunity to learn about regulatory requirements to protect the financial system from a law enforcement perspective. As you discuss today's topics among your peers, I urge you to consider your own role in proactively addressing these issues. We will have achieved our objective today if we can reach consensus on what the most significant challenges are, and furthermore, come up with ideas on how to tackle these challenges. I encourage you, for example, to spearhead a topic-based working group that continues to dialogue over the next six months by working on a specific project, the results of which could be presented when we next meet in Sao Paolo. Your active participation is absolutely fundamental both to today's discussion, and going forward to ensuring a productive dialogue that is not merely restricted to the one or two times a year when we have the opportunity to meet in person, but that continues on an ongoing basis.

In sum, I would like to extend my gratitude to our panel facilitators, including those from the private and public sectors in the U.S. and across the Latin American region, for their work and leadership in preparing us for today's dialogue. We must maximize this unique opportunity to develop insights and innovative solutions to the daily challenges of protecting our global financial community.

I look forward to continuing our work together today to advance these goals.

Thank you, muito obrigado and muchas gracias.