United Kingdom (and EU regulation)

FATF report to G20 Finance Ministers and Central Bank Governors

On 16 March 2018, the Financial Action Task Force (FATF) published a report to G20 Finance Ministers and Central Bank Governors. The report sets out FATF’s on-going work to fight money laundering and terrorist financing focusing on areas such as improving transparency and the availability of beneficial ownership information and bank de-risking.

Among other things the report notes that:

in February 2018 FATF undertook a stocktaking exercise to better understand the risks and mitigating measures associated with virtual currency payment products and services;
proliferation financing risks has been a high level priority for the FATF and comprehensive guidance was published in February 2018;
beneficial ownership remains a high priority for the FATF and countries need to continue to strengthen their implementation of the FATF Recommendations related to beneficial ownership and transparency. As of February 2018, the FATF and FATF-style regional bodies have conducted mutual evaluations of 44 jurisdictions. The results show that 40 of these need to make fundamental or major improvements in their anti-money laundering and countering terrorist financing systems to prevent the misuse of legal persons and arrangements and ensure availability of beneficial ownership information;
de-risking remains a challenge to effective and risk-based anti-money laundering and countering terrorist financing measures;
the remittances sector is vulnerable to misuse for terrorist financing and other criminal activities. There is a need for better supervision of this sector at a national level in order to give financial institutions the confidence they need to continue to provide banking services; and
digital ID has the potential to streamline customer due diligence processes, reduce compliance costs and improve financial inclusion. The FATF is reviewing how different countries are approaching digital ID and related innovations. In February 2018, the FATF considered the potential policy implications of this and it will report later this year on further developments.