Connect to a new world of efficiency by utilizing cleversoft’s business solutions.
Last Friday, 23 June 2023, the third Plenary of the Financial Action Task Force (FATF) convened under the Presidency of T. Raja Kumar of Singapore, culminating in fruitful discussions among delegates from over 200 jurisdictions of the Global Network and international organizations. Held at the FATF headquarters in Paris, the Plenary focused on the pressing issues of combating money laundering, terrorist financing and proliferation financing. In pursuit of a comprehensive global response, the FATF emphasized the significance of collective action by all countries in the Global Network. These crucial matters were deliberated upon during the FATF-FSRB Annual High-Level Meeting, preceding the Plenary meeting.
The FATF expressed its deepest sympathies to the people of Ukraine for the tragic loss of life, destruction of infrastructure and societal upheaval caused by the ongoing military invasion by the Russian Federation. The FATF reiterated that the Russian Federation’s aggressive war against Ukraine contradicts the principles upheld by the organization, including the promotion of global financial system security, safety, integrity, and international cooperation. Consequently, the suspension of the Russian Federation’s membership remains in effect.
Building upon previous statements issued since March 2022, the FATF stressed the importance of all jurisdictions remaining vigilant to the current and emerging risks associated with circumventing measures taken against the Russian Federation. These measures are imperative for safeguarding the international financial system.
During the Plenary, FATF Members made significant progress in various areas of focus. In line with the recent public consultation published by European Banking Authority, members agreed to publish the fourth targeted update on the implementation of the FATF Recommendations concerning virtual assets and virtual asset service providers (VASPs). Additionally, the FATF Members advanced their efforts to prevent the misuse of non-profit organizations (NPOs) by agreeing to release potential revisions to Recommendation 8 and an updated FATF Best Practices paper on combating NPO abuse for public consultation.
Moreover, the Plenary highlighted the updates on ongoing projects, including combating the misuse of citizenship and residency through investment schemes, addressing money laundering and terrorist financing related to cyber-enabled fraud, and examining the use of crowdfunding for terrorist financing. Recommendations 4 and 38 were also discussed, aiming to provide countries with stronger legal measures for freezing, seizing, and confiscating criminal assets, including non-conviction-based confiscation. The FATF expects to finalize these projects by October 2023. Additionally, the FATF approved new projects including an initiative to enhance money laundering investigations and prosecutions.
The Financial Action Task Force (FATF) collaborates with jurisdictions facing increased monitoring to rectify strategic deficiencies pertaining to countering money laundering, terrorist financing, and proliferation financing. When a jurisdiction falls under increased monitoring, it signifies its commitment to implementing an Action Plan that promptly resolves identified strategic deficiencies within agreed timeframes. During last week’s plenary, the FATF has identified three new jurisdictions under increased monitoring: Cameroon, Croatia, and Vietnam.
The Plenary extensively discussed and adopted the mutual evaluation report of Luxembourg, which assessed the effectiveness of the country’s measures to combat money laundering and terrorist financing, along with its compliance with the FATF Recommendations. Luxembourg was recognized for achieving a high level of technical compliance with the FATF’s requirements, demonstrating a strong anti-money laundering and counter-terrorism financing regime. The country displayed a robust domestic cooperation framework, effective use of financial intelligence, access to beneficial ownership information, and constructive collaboration with international counterparts. However, the report identified areas for improvement, such as enhancing the detection, investigation, and prosecution of complex money laundering cases, strengthening risk-based supervision in the non-financial sector, disseminating understanding of terrorist financing risks, and implementing proportionate and dissuasive.
Following this plenary, cleversoft’s regulatory team has updated its country risk scoring to reflect the outcome of last week’s FATF conclusion:
Do reach out to cleversoft as your regulatory technology partner in order to understand how we can simplify your business’ compliance obligations.
FATF: Outcomes FATF Plenary, 21-23 June 2023 (fatf-gafi.org)
