fsvc insights - november 2014 final
TRANSCRIPT
FSVC INSIGHTS
November 2014
Morocco: Reforming Bankruptcy Law
The current legal and regulatory framework for bankruptcy in Morocco has been an obstacle to the development of an enabling business environment. To address this issue, the Ministry of Justice has recently launched a comprehensive reform of the law governing bankruptcy in Morocco. A legal committee designated by the Ministry is responsible for drafting a new bankruptcy law. In September 2014, with support from the U.S. Department of State’s Middle East Partnership Initiative (MEPI), FSVC organized consultations to provide the committee with expert advice on the draft law. The FSVC volunteer experts reviewed the draft law and provided feedback based on international best practice and standards. FSVC then organized a roundtable discussion with other key bankruptcy stakeholders to discuss initial recommendations for improving the draft law. As a result of this project, the Ministry of Justice received an expert report summarizing observations and recommendations on how to improve the current draft bankruptcy law. These recommendations will help the Ministry and the legal committee modify the draft law in line with international standards. The reformed bankruptcy law, once operational, will help improve the business climate in Morocco, particularly for small and medium‐sized enterprises (SMEs).
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Also in This Issue
Uganda: Building AML/CFT Capacity
Jordan: Encouraging Transparent Budget Policies
Tunisia: Strengthening Communications on Budgetary Issues for Ministry of Finance
Zambia: Improving Public Financial Management
Spotlight on FSVC Counterpart: Albanian Deposit Insurance Agency
Angola: Study Tour to the United States
Dear Friends of FSVC, The third quarter of 2014 was exceptionally busy at FSVC, particularly in Sub‐Saharan Africa where the organization delivered technical assistance projects in Angola, Tanzania, Uganda and Zambia. These projects covered critical topics, including improving lending to small businesses, increasing transparency in public financial management and strengthening the capacity of regulators and financial institutions to combat money laundering and terrorist finance (AML/CFT). FSVC has received new funding this fall to support several important programs of technical assistance. With this new funding, FSVC will continue its programs in Egypt to strengthen access to finance for small businesses and in East Africa to promote regional financial sector integration. In the fourth quarter of 2014, FSVC will also launch a new AML/CFT program in Indonesia. Please take a few moments to read about some of the recent projects that FSVC has undertaken. I believe that FSVC is uniquely positioned to achieve the results described in this newsletter. Thank you, as always, for your support of FSVC’s work. J. Andrew Spindler President and CEO
From left: Maarten Van Ingen, FSVC volunteer expert; Ira Bodenstein, FSVC volunteer expert; Hans Wind, FSVC volunteer expert; Mohamed Nemri, Director of Civil Affairs at the Ministry of Justice; Hassan Al Kassem, First President of the Appeal Court of Casablanca; Abdelilah Hakim Bennani, Secretary General of the Ministry of Justice; El Haidi Chaibainou, Managing Director of the Professional Association of Moroccan Banks; Abderazzak Omrani, First President of the Commercial Appeal Court of Casablanca; Khadija Belklouch, King’s Prosecutor at the Commercial Court of Rabat; and Aaliyah Hashmi, King’s Prosecutor at the Commercial Court of Casablanca.
FINANCIAL SERVICES VOLUNTEER CORPS
Uganda: Building AML/CFT Capacity
FSVC, with support from the U.S. Department of State, facilitated the participation of two representatives from the Bank of Uganda (BoU) in an AML/CFT examination of a commercial bank in the United States in July 2014. Over the course of the two‐week examination conducted by the U.S. Federal Deposit Insurance Corporation (FDIC), the two BoU representatives participated in the pre‐exam planning, the actual exam itself, and post‐exam consultations. As a result of this project, the BoU participants gained insight into the practical aspects of an AML/CFT risk‐based examination, with a focus on on‐site examination procedures. The two participants are now reviewing and helping to improve the procedures specified in the BoU’s current Risk‐Based Manual pertaining to the monitoring of AML/CFT compliance in financial institutions. The BoU’s AML/CFT supervision and examination guidelines will be updated to include key lessons learned during this unique opportunity.
Jordan: Encouraging Transparent Budget Policies
The Jordanian Government has committed to increasing access to information at every level of public administration, including access to timely, high‐value data in formats that can be easily understood and utilized by the general public as well as interested parties. To help the Jordanian General Budget Department (GBD) reach this goal, FSVC, in partnership with the U.S. Department of State’s MEPI program, organized two workshops on international best practices and standards in transparent budget policies in September 2014. The first workshop focused on measuring the impact of expenditures in the national budget. The second workshop covered international best practices in incorporating transparency and accountability measures in the budget cycle.
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November 2014
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About FSVC
The Financial Services Volunteer Corps (FSVC) helps build sound financial systems that are needed to support robust market economies in transitional and developing countries. FSVC structures practical, results‐oriented technical assistance and training missions staffed by senior financial sector practitioners who serve as unpaid volunteer experts. FSVC's core work concentrates on strengthening commercial banking sectors, developing central bank capabilities, expanding access to finance and building capital markets. Since the organization’s inception in 1990, FSVC has provided more than $210 million in technical assistance, principally through the donated services of volunteer experts. Over 8,500 volunteer experts from the international financial, legal and regulatory communities have taken part in more than 2,800 missions, reaching 35,000 counterparts in 50 transitional and developing countries.
From left: Francis Sserwadda, Assistant Director at the BoU, with Tom Belcher, Examiner from the FDIC.
Patrick Okettayot, BoU Principal Bank Examiner (3rd from left) and Francis Sserwadda, BoU Assistant Director (far right) with FDIC staff participating in bank exam.
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Jordan: Encouraging Transparent Budget Policies (continued)
proposals. The GBD plans to use the policy and technical budget recommendations from the two workshops to institutionalize a results‐oriented budget cycle for the Government of Jordan.
Tunisia: Strengthening Communications on Budgetary Issues for Ministry of Finance Prior to the events of the Arab Spring, civil society, the media and private citizens in Tunisia had very limited information about how budgets are developed and implemented. Public discussion on how the government allocated public money was not encouraged, and criticism was often suppressed. This lack of fiscal transparency often led to ineffective allocation of financial resources. Since the revolution, the Tunisian government has sought to strengthen its ability to communicate openly with its citizens and the media about budget issues. At the request of the Tunisian Ministry of Finance (MoF), FSVC, with support from the U.S. Department of State, conducted consultations in September 2014 with the MoF on how to improve its communication strategy on budget issues. FSVC volunteer experts first assessed the
MoF’s current approach and then provided suggestions on how to design an effective communication strategy.
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Albania
Workshop on Basel II Capital Adequacy Ratio Regulation
Consultations on Mobile Payments Licensing and Regulation
Consultations on EU Framework for Bank Resolution
Consultations on Consolidated Supervision for the Bank of Albania
Jordan
Consultations on Best Practices in Budget Review for Parliament
Workshop on Effective Advocacy Tools for Achieving Budget Transparency
Consultations on Strategic Plan for Civil Society to Advocate for Open Budgets
Consultations with Business Associations on Developing SME Services outside Amman
Assessment of Business Incubation Centers for SMEs in Amman
Consultations to Improve Awareness among SMEs of Business Association Services
Assessment of Challenges Facing SMEs in Licensing and Registration outside Amman
Consultations to Increase Efficiency of “One‐Stop‐Shop” Business Registration Process
Create Pool of Certified “Coaches” for Business Start‐ups
Azerbaijan
U.S. Study Tour for Bankers from Azerbaijan on Sales, Branch Management and E‐Commerce (Seeking Host Institutions)
U.S. Study Tour for Bankers from Azerbaijan on Sales, Branch Management and E‐Commerce (Seeking Host Institutions)
More Volunteer Opportunities are on the next page; also check
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Upcoming Volunteer
Opportunities
Libya
Workshop on Budget Planning and Preparation for Government Ministries (will be held in Tunisia)
Virginia Robinson (second from left) and Gail Young (front center left), FSVC volunteer experts; Danyelle Gerges, FSVC Jordan Country Director (second from right); and staff from the Jordan General Budget Department (GBD).
Tunisia: Strengthening Communications on Budgetary Issues for Ministry of Finance (continued)
During an interactive Q&A session, MoF staff frankly discussed existing gaps in their communication approach and considered suggestions on how to address them. As a result of this project, the MoF is reforming its communications process regarding budget matters, and will adopt new communications tools based on international best practices. Improved dialogue between the Tunisian government and its citizens about the budget process should help increase public trust in the government.
Zambia: Improving Public Financial Management
In 2012, the International Budget Partnership gave Zambia the lowest score in Southern Africa for budget transparency, indicating that the government provides the public with scant information on its budget and actual expenditures. FSVC, with support from the U.S. Department of State, is strengthening the capacity of the Government of the Republic of Zambia (GRZ) to address public financial management issues.
Since March 2014, FSVC volunteer experts have provided hands‐on, practical training to the Ministries of Health, Education, Finance, Agriculture and Home Affairs on how to utilize the GRZ’s Integrated Financial Management Information System (IFMIS) for data management and budget reporting purposes. IFMIS is an innovative system that relies on state‐of‐the‐art software to enhance transparency and information‐sharing
across government agencies. As a result of the project, these ministries have acquired a more effective and streamlined way to manage financial resources and data.
FSVC volunteer experts Gian‐Carl Casa (far left) and Irene Zanetti (far right) with MoF staff in Tunis.
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November 2014
Ajay Vonkarey, FSVC volunteer expert (right) working with staff member from Zambia’s Ministry of Home Affairs.
Upcoming Volunteer Opportunities (continued)
Tunisia
Consultations on Best Practices in Management Control Systems and Results‐Based Budgeting
Workshop on Transparent Budget Management for Local Government
Consultations on Improving Budget Information Dissemination to Citizens
Workshop on Best Practices for Budget Transparency
Workshop on International Standards in Accounting for Supreme Audit Institutions
Consultations on Advanced Internal Audit Policies for Local Governments
Consultations on Best Practices in Management Control Systems and Results‐Based Budgeting
Workshop on Transparent Budget Management for Local Government
Consultations on Improving Budget Information Dissemination to Citizens
Workshop on Best Practices for Budget Transparency
Workshop on International Standards in Accounting for Supreme Audit Institutions
Consultations on Advanced Internal Audit Policies for Local Governments
Morocco
Workshop on Developing Tools to Educate SMEs on Bankruptcy
Training on Compilation of Data and Statistics on Bankruptcy Practices and Trends
Workshop on Developing Tools to Educate SMEs on Bankruptcy
Training on Compilation of Data and Statistics on Bankruptcy Practices and Trends
Craig L. Brown Sr., FSVC volunteer expert (left) in consultation with Zambia Ministry of Education (MoE) staff member.
“Participating in the Zambian financial reporting project was one of the most satisfying work experiences in my IT career. Helping the people of Zambia to take advantage of technology to achieve their goals gave me great pleasure! I look forward to helping more if the opportunity presents itself.” ‐ Craig L. Brown, Sr. FSVC volunteer expert Xceleon, LLC
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Angola: Study Tour to the United States FSVC hosted a U.S. study tour for representatives of Banco Keve, a commercial bank in Angola, to provide them an opportunity to observe SME banking practices at several American financial institutions. Banco Keve has identified SMEs in Angola as a primary target market, and is seeking to gain a better under‐standing of international best practices and successful models in SME banking.
Over the course of a week in October 2014, the delegation met with host institutions in the Philadelphia region, including Univest Capital, United Bank, M&T Bank, Valley Green Bank and the U.S. Small Business Administration (SBA). The President and Founder of Univest Capital, Hugh Connelly, had previously volunteered on an FSVC project in Angola for Banco Keve. His knowledge of Banco Keve’s challenges in gaining access to the Angolan SME market helped tailor the study tour to the specific needs of the bank. As a result, the delegation returned to Angola with new ideas regarding products, marketing and sales practices that they can begin to implement to serve the needs of SMEs in Angola.
From left: Nazdezda Justina Alves Martinho, Joaquim Jeronimo Inacio, Suely Nadir Figuera de Barros, and José Evaristo, representatives from Banco Keve; Hugh Connelly, President and Founder of Univest Capital; and Colette de Chalus Lee, United Bank staff member.
From left: United Bank staff member with José Evaristo and Joaquim Jeronimo Inacio, representatives from Banco Keve.
From left: Suely Figuera de Barros and Jose Evaristo, representatives from Banco Keve, and Hugh Connelly, President and Founder of Univest Capital.
“FSVC’s exchange program for Banco Keve staff in
Philadelphia was extremely relevant and fruitful. The experience and knowledge gained through our conversations and observations with the various financial institutions working in the SME market will truly help our bank achieve its objectives in this area. We have returned to Angola with a greater understanding and appreciation for SME banking and the importance of serving our customers, and will con‐tinue to work with FSVC to implement these new con‐cepts.” – José Evaristo Department Head, Banco Keve
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November 2014
Spotlight on FSVC Counterpart: Albanian Deposit Insurance Agency
Toni Gogu (right) is the General Director of the Albanian Deposit Insurance Agency (ADIA). FSVC was instrumental in helping to establish ADIA, and has provided technical assistance to the institution since 2003. In recent years, FSVC has assisted Mr. Gogu and his team in developing the operational readiness of ADIA in the event of a bank failure in Albania.
Q: What does ADIA do? A: ADIA is a public institution founded more than a decade ago. We at ADIA work to
improve our capacity to effectively achieve one goal: pay out insured bank depositors’ funds up to the legal coverage limit and in the shortest amount of time possible in the event of a bank insolvency or failure.
Q: How did ADIA become involved with FSVC, and what are some recent projects that FSVC volunteer experts have worked on?
A: ADIA and FSVC have a long history of collaboration. The assistance that FSVC, through its volunteers, has provided to ADIA is invaluable and has been instrumental since the early stages of the institution’s establishment. FSVC has assisted in different aspects of our operations, including strategy and planning, improving our legal and regulatory framework, and providing IT‐based technical assistance, among others. Over the past year, FSVC has provided volunteer experts to assist ADIA on key issues, including our agency’s mandate, strategy and organizational structure. FSVC was also instrumental in helping us develop an IT system for data reporting and premium calculation from member banks, which was a major achievement for ADIA. In the area of regulatory changes, FSVC provided assistance to ADIA following the approval of legislation to include savings and credit associations (SCAs) into the national deposit insurance scheme. FSVC provided a wonderful expert who helped us draft the criteria for assessing whether individual SCAs are compliant with the legal and technical requirements of ADIA. This screening will ensure that only eligible SCAs enter the deposit insurance scheme. Finally, FSVC volunteer experts proved invaluable in helping ADIA draft standard operating procedures in case of a payout.
Q: In your opinion, what FSVC project with ADIA has had the most impact? A: All the projects have been extremely important and essential for ADIA to fulfill its mandate. But, if I have to
select one, it would be the development of the IT system for data collection and reporting from member banks. This system will allow us to assess the readiness of member institutions to provide accurate and reliable deposit information to ADIA, which is vital for a prompt reimbursement to depositors. The expertise of FSVC volunteers was a key factor from the start, from drafting the terms of reference to the successful completion of all the necessary testing and evaluation procedures and protocols.
Q: What are the benefits of working with FSVC volunteer experts? A: The FSVC volunteer experts who assisted ADIA have had extensive international experience in legal and regulatory
issues pertaining to financial systems. Their CVs are quite impressive. ADIA staff have benefited from working with them, building capacity and know‐how. More importantly, FSVC volunteer experts assisted ADIA staff in accomplishing significant projects, thereby helping ADIA improve its services to stakeholders in the deposit insurance scheme.
Q: How do you see ADIA evolving, and what type of relationship do you envision with FSVC in the future? A: ADIA’s objective is quite simple. We are striving to develop processes and procedures to ensure the successful
payout of insured depositors within one week of a bank closure. We will continue to build our capabilities and capacities to be ready for a payout process and to ensure our depositors get paid on time. In this respect, we value our relationship with FSVC and consider it instrumental in helping ADIA accomplish successfully its main objective.
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