On 23 October 2015, the Financial Action Task Force (FATF) published a press release announcing the outcomes from its plenary meeting held in Paris between 21 to 23 October 2015. A couple of the outcomes are of particular interest to financial services practitioners.
http://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-plenary-october-2015.html
The FATF has published a statement on its action to tackle de-risking.
As this remains a priority area for the FATF it continues to closely monitor de-risking developments, including the work of other bodies. De-risking is driven by many different factors, including a lower risk appetite of banks, the increasing number of sanctions regimes, and regulatory requirements in the financial sector. This is a serious concern as de-risking may drive financial transactions underground, which in turn increases money laundering and terrorist financing risks. The FATF is acting quickly to clarify regulatory expectations in four specific areas to ensure that AML and CTF measures are being implemented effectively and in line with its risk-based approach. It is:
- Developing guidance to clarify how to properly identify and manage risk in the context of correspondent banking and remittances. This guidance will address the issues highlighted by the FATF in its June 2015 statement on de-risking
- Developing guidance to help money remitters identify and manage their risks, and to help banks evaluate and manage the risks of providing financial services to money remitters. This guidance will also help governments supervise these activities.
- Developing best practices on appropriate customer due diligence (CDD) to facilitate financial inclusion in a way that strikes an appropriate balance with AML and CTF objectives.
- Revising the relevant standard practices on combating the abuse of non-profit organisations (NPOs), which was issued in June 2015
The FATF aims to complete its work in these areas in 2016.
The FATF has also published guidance on effective supervision and enforcement by AML and CTF supervisors in the financial sector and law enforcement.
http://www.fatf-gafi.org/media/fatf/documents/reports/RBA-Effective-supervision-and-enforcement.pdf
This guidance describes the features of effective supervision by regulators and supervisors, and clarifies their interaction with law enforcement agencies. It aims to enhance jurisdictions’ understanding of the relevant FATF recommendations by describing good practices and providing illustrative case examples.
The FATF advises that the guidance should be read in conjunction with its guidance on the risk-based approach.
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