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The October 2023 Financial Action Task Force (FATF) Plenary concluded last Friday marked a pivotal event in the arena of international financial regulation. This comprehensive summary highlights the significant discussions, decisions and goals that emerged during this important gathering.
The Plenary commenced by extending a warm welcome to Indonesia, officially inducting the country as the 40th full member of the FATF. This momentous addition underscores the organization’s steadfast commitment to global inclusivity, bringing all G20 nations under its umbrella. Simultaneously, the Plenary reiterated the ongoing suspension of the Russian Federation’s membership, underscoring the collective determination to maintain vigilance and prevent any potential circumvention of protective measures.
A central theme of the Plenary revolved around the imperative of strengthening asset recovery initiatives. Policymakers, delegates and financial authorities emphasized the pivotal role of robust policies and actions in the relentless fight against money laundering and terrorist financing. A highlight of the Plenary was the introduction of revised FATF Recommendations designed to provide nations with an expanded and more effective toolbox. These revisions aim to enable countries to swiftly freeze, seize and confiscate criminal assets, thereby bolstering the global fight against financial crime.
The Plenary recognized the crucial role played by Asset Recovery Networks (ARINs) in international efforts to recover illicit assets. Delegates underscored the pressing need for enhanced cooperation between law enforcement and judicial practitioners to streamline the often complex process of cross-border asset recovery. Furthermore, a series of amendments to the Recommendations were introduced, specifically designed to safeguard non-profit organizations (NPOs) from potential abuse for terrorist financing. These amendments aim to strike a delicate balance between implementing stringent security measures and preserving the critical work of legitimate charitable organizations and humanitarian initiatives.
One of the significant discussions revolved around the misuse of crowdfunding platforms by extremist groups. The Plenary recognized the growing threat posed by the exploitation of crowdfunding for terrorism financing. An upcoming report promises to delve into this issue, providing valuable insights into how these platforms have been used by extremist entities. The report will also offer strategies for preventing such misuse. In addition, the Plenary addressed the escalating threat of cyber-enabled fraud on a global scale. With the rapid evolution of cyber fraud, the Plenary emphasized the importance of staying ahead of these challenges. An upcoming report will shed light on effective detection and prevention strategies, empowering authorities to tackle this emerging threat.
The Plenary extended its focus to the misuse of citizenship and residency by investment programs (CBI/RBI), a pertinent issue in the modern financial landscape. The FATF, in collaboration with the Organisation for Economic Co-operation and Development (OECD), embarked on a joint project to investigate the inherent money laundering and financial crime risks associated with CBI/RBI programs. The subsequent report unveiled significant vulnerabilities within these programs and offered a series of recommendations to mitigate the associated risks. This project highlighted the need for greater oversight and regulation in this domain. Furthermore, the Plenary updated the Methodology for the next round of mutual evaluations, reinforcing the global commitment to combating money laundering and promoting transparency.
The Plenary expanded its focus to monitoring and evaluation, adding Bulgaria to the list of jurisdictions subject to increased monitoring. This decision reaffirms the FATF’s unwavering commitment to addressing strategic deficiencies and ensuring the integrity of the international financial system. In contrast, the Plenary commended the progress made by Albania, the Cayman Islands, Jordan and Panama in rectifying significant AML/CFT deficiencies. As a result of their diligent efforts, these countries are no longer subject to heightened monitoring. Their commitment to strengthening anti-money laundering and counter-terrorist financing measures continues to serve as a model for others.
As the Plenary concluded, all participants looked ahead to the next FATF Plenary meetings scheduled for February 2024. This upcoming event promises further developments and discussions that will shape the landscape of international financial regulation, ensuring the ongoing fight against financial crime remains at the forefront of global efforts.
The insights gained from the October 2023 FATF Plenary have an impact on our country risk scoring outcome. As countries adapt to the changing regulatory scene, our team at cleversoft diligently incorporates the latest findings into our risk assessment models. By closely monitoring developments, we ensure that our clients receive the most accurate and up-to-date risk assessments, helping them make informed decisions in an ever-changing global economy. In conclusion, the October 2023 FATF Plenary has left a lasting imprint on the global financial landscape, triggering shifts in country risk assessments. Bulgaria, which is now placed on the FATF’s increased monitoring list, has transitioned into the realm of high-risk jurisdictions. While Albania, the Cayman Islands, Jordan and Panama have successfully shed this label, other factors continue to warrant their consideration as high-risk countries. Indonesia’s acceptance as an FATF member has led to an improvement in its risk ranking from High to Medium, signifying a step toward the State’s enhanced financial security. On the other hand, the Seychelles recently found itself on the EU list of non-cooperative jurisdictions, leading to an increase in its risk rating from Medium to High.
cleversoft remains your trusted compliance and regulatory partner committed to delivering the latest insights and developments. Please reach out to our support team for any questions on our assessments and on how it is applied in our compliance solutions. Not a cleversoft client? Do reach out to our Sales Team to learn how our due-diligence/AML tools can simplify and improve your compliance obligations.
FATF October 2023 Plenary: Outcomes FATF Plenary, 25-27 October 2023 (fatf-gafi.org)
cleversoft AML/KYC Product Suite: AMLD – cleversoft Archive – cleversoft (clever-soft.com)
