Mid-Term Evaluation of the IMF’s Anti-Money Laundering and Combating the Financing of Terrorism Thematic Trust Fund (Phase III)

The evaluation
The IMF’s Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Trust Fund is a multi-donor initiative that provides Capacity Development (technical assistance and training) to IMF member countries with the goal to mitigate the macro-relevant consequences of financial crimes and weak AML/CFT frameworks. SEO Amsterdam Economics was commissioned by the International Monetary Fund (IMF) to conduct a mid-term evaluation of Phase III (2021–2026) of this Trust Fund, focusing on accountability and learning. The third phase of the Trust Fund had a funding capacity of approximately USD 30 million. The evaluation assessed the Trust Fund’s relevance, coherence, effectiveness, efficiency, sustainability, and impact. 

Methods
The evaluation combined reviews of documents, analysis of results-based monitoring data and financial data, and interviews with IMF staff, consultants, donors, and recipient country authorities. SEO also conducted a stakeholder survey among 100+ IMF staff, AML/CFT experts, trust fund donors, and representatives of recipient countries. The evaluation took place at two levels:  

• a project-level assessment of 5 case studies, namely: two single-country case studies (in Bhutan and Egypt), one regional case study (Pacific Island Countries), a thematic project on financial integrity measures related to COVID-19 support, and a thematic project on Virtual Assets and Virtual Asset Service Providers (VAs and VASPs); and 

• a Trust Fund-level assessment, focusing on: the quality of Trust Fund processes and procedures; the efficiency of management, monitoring and reporting processes; the appropriateness of the funding model; and coherence with interventions of other development partners.  

Key findings
The mid-term evaluation concluded that the AML/CFT Trust Fund was relevant and effective in supporting countries to meet international standards and mitigate macro-relevant risks, while its coherence and efficiency could still be improved further. The key findings were as follows: 

• Relevance: The Trust Fund was found to be a relevant instrument for supporting countries with meeting FATF standards and addressing risks related to money laundering, financial crimes, and terrorism financing (ML/TF). Its global relevance could be further improved by prioritizing those jurisdictions or sectors where ML/TF risks are highest and where the consequences of ML/TF are most macro-relevant. 

• Internal coherence:  Capacity development projects showed growing integration into IMF core activities such as surveillance and lending programs. There was room to further improve collaboration with IMF country teams to identify macro-relevant ML/TF risks . 

• External coherence: The Trust Fund made good use of the IMF’s comparative advantage in the macro-financial area. Coordination with other development partners varied, but the Trust Fund had started developing initiatives to coordinate more systematically. 

• Effectiveness, impact and sustainability: Capacity development projects were broadly effective in achieving their short-term targets such as building short-term capacity. The long-term impact of these projects was not yet measured and was sometimes constrained by limited institutional ownership or high staff turnover in recipient agencies.
   
• Efficiency: Online and hybrid formats were found to enhance cost-effectiveness. Timeliness and speed of delivery could still be improved.

Based on the above findings, the evaluation put forward six key recommendations: enhance the Trust Fund’s macro-relevance; strengthen recipient engagement; further integrate AML/CFT priorities into IMF programs; institutionalize coordination with other capacity development providers; streamline reporting to emphasize longer-term impact; and improve efficiency through further use of online and hybrid tools, faster response times to recipients, and more streamlined reporting to donors.