G-7 to adopt measures against terror money

Agreement comes after concern that deliberate act may have knocked EgyptAir plane from sky

SENDAI (Japan) • The world's major industrialised nations are set to agree to adopt a series of practical measures to improve the international fight against terrorist financing today.

Britain's Chancellor of the Exchequer George Osborne and French Finance Minister Michel Sapin are leading the push to agree on four key measures at the Group of Seven (G-7) finance ministers meeting in Sendai, according to an official who declined to be named.

These include enhancing G-7 information exchange and cooperation, assessing appropriate changes to international standards on counter-terrorist finance, ensuring the best use of existing financial sanctions and reinforcing the work of the Financial Action Task Force, according to the official.

The agreement, backing up a similar push by the larger Group of 20 (G-20), comes after the disappearance of an EgyptAir plane with 66 people on board sparked concern that a deliberate act may have knocked the plane from the sky.

Global institutions, including the G-7, G-20 and International Monetary Fund (IMF), are stepping up efforts to clamp down on terrorist financing after deadly attacks in France and elsewhere galvanised leaders to act.

"The G-7 has been, and can be, very effective as its members directly control global financial centres and the financial system as a whole," said Dr John Kirton, a professor and director of the University of Toronto's G-7 research group.

France and Britain will work with other G-7 countries to consider how to implement the measures, which may then be considered as part of a wider set of commitments on terrorism at the leaders' summit on the Japanese island of Ise-Shima next week.

Brexit was a key focus of discussions for officials during the second day of the G-7 summit yesterday.

The risk of Britain exiting the European Union (EU) is a key concern for G-7 finance chiefs amid fears a vote to leave the EU in just over a month could roil international markets.

Finance ministers and central bank governors discussed the possibility of Brexit as one of the biggest risks on the horizon, according to G-7 officials.

British Prime Minister David Cameron's decision to hold a referendum on Britain's membership of the EU on June 23 has split his ruling Conservative Party and drawn warnings from international bodies, from the IMF to the Organisation for Economic Cooperation and Development, that an exit would cause financial shocks beyond Britain.

Risks to financial markets and to British growth from Brexit were singled out in discussions at the symposium of finance ministers, central bankers and economists on strategies for balanced and sustainable growth, one of the officials said.

In a potential setback to Brexit campaigners, Canada's Finance Minister Bill Morneau specifically cautioned against some of the models they suggest as alternatives to EU membership, which includes the claim a Canadian-style trade agreement outside the bloc would leave Britain better off.

"Our message would be that it's not straightforward to develop trade agreements," Mr Morneau said in an interview.

"It's certainly not straightforward to develop trade agreements after deciding to move out of a trade bloc. I hope that's something the British people will take into account when they think about their vote."

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A version of this article appeared in the print edition of The Straits Times on May 21, 2016, with the headline 'G-7 to adopt measures against terror money'. Print Edition | Subscribe