1. FATF & future AML/CFT challenges – Bjørn Aamo, FATF-President, Brussels 15 March.
New FATF Standards: welcome proposals for new Directive that are broadly consistent
FATF focus on effectiveness – does the system work?
New Methodology agreed last month – legal/institutional framework based on FATF Standards + 11 outcomes
Free standing assessment of effectiveness of system e.g. are suspicious transactions reported, are money launderers being convicted, deprived of their proceeds, and prevented from inserting proceeds into financial system
Assessments will be challenging but resulting reports will focus on the important issues for the country
Will link technical compliance (adequacy of laws and the institutional framework) with an assessment of whether results being achieved, and thus look at the regime overall
Supervisory authorities have a key role to play, including the 3 European supervisory bodies, as set out in draft 4thDirective. The last year has shown the scale of the challenge, with several major international banking groups having serious compliance failures.
The President
FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈRE
28-Mar-17

2. Future Challenges (2)
Risk Based Approach – starting point for system (R1). FATF focus on assessing the ML/TF threats and vulnerabilities and the impact (see new FATF Risk Assessment Guidance). Requires both countries and obliged entities to accurately assess risks. Compliance failures show:
need for large, complex institutions to reflect carefully on how to organize/conduct their compliance functions to cover the risks
need to conduct and focus supervisory compliance and enforcement in a way that effectively addresses the risks
Transparency of corporate vehicles – lack of information on beneficial owners underlies many major corruption and ML cases.
New R.24 provides a better basis, and the proposed Art 29/30 4thAMLD sets out the requirements precisely. Key is timely access in practice to accurate and up to date information on the real owners of companies, trusts etc. Need for continued work globally by FATF, EU MS, and other key bodies. Capacity and competence of national company registers should be assessed as part of effectiveness assessments.
The President
FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈRE
28-Mar-17

3. Future Challenges (3)
Tax evasion is a key issue for many countries currently. Governments lose billions through such criminality.
Tax crimes are now expressly a ML predicate and part of the FATF Standards.
Need to exchange information and effectively co-ordinate action (both nationally and internationally) between relevant authorities to prevent laundering of such proceeds.
FATF – continue productive engagement with the private sector
Consultative Forum, joint work on guidance e.g. RBA, PEPs etc
Gain good understanding of real issues faced by institutions applying Standards and national AML/CFT requirements
Work collaboratively to find effective and efficient solutions
Ensuring effective global implementation. Key tools:
FATF global network of FSRBs
ICRG process: Naming countries with strategic deficiencies.
The President
FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈRE
28-Mar-17