The Revised International Standards Adopted by the Financial Action Task Force (FATF)

The Financial Action Task Force  (FATF) is a global intergovernmental standard-setter for measures to combat money-laundering, terrorist financing and the financing of proliferation. It is composed by 36 members and count with the participation of over 180 countries through a global network.

 

The key changes introduced by the new Standards are:

• Introducing a risk-based approach: the new standards introduce a risk based approach; the countries more at risk of money laundering or terrorist financing should adapt their Anti Money Laundering/ Counter Financing of Terrorism (AML/CFT) system to the nature of these risks
• Improving transparency measures: the new agreement has strengthened transparency requirements on various transfers, in particular electronic transfers; this means more rigorous requirements on the information which must accompany electronic funds transfers (the ownership and control of companies, trusts, and other legal persons or legal arrangements)
• Towards more effective International Cooperation: the FATF has enhanced the scope of international cooperation between government agencies, and between financial groups (e.g. simplified extradition mechanisms
• Identification of clear Operational Standards: the FATF revise and clarify the role and functions of the operational agencies responsible for combating money laundering and terrorist financing and present the range of investigative techniques and powers capacities
• New threats & new priorities to be covered:

–          Financing of Proliferation – the proliferation of weapons of mass destruction is a significant security concern
–          Corruption & Politically Exposed Persons – the requirements have been expanded with new recommendations applying to domestic politically exposed persons and international organisations
–          Tax Crimes – the list of predicate offences for money laundering has been expanded to include tax crimes
–          Terrorist Financing – the financing of terrorism remains a major focus of the FATF

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