On 17 June 2022, the Financial Action Task Force (FATF) published the outcomes of its plenary on 14 to 17 June 2022.
Delegates from over 200 jurisdictions participated in the plenary and the FATF expressed its deepest sympathies for the people of Ukraine, and as a result of Russia’s invasion, the FATF agreed to severely limit the Russian Federation’s role and influence within the FATF.
The discussions centered on the following areas:
Mutual evaluation of Germany and the Netherlands
- The Plenary concluded that, while Germany has made improvements to its anti-money laundering / countering the financing of terrorism (AML/CFT) framework over the past five years, some of the most recent reforms are not yet fully effective.
- The Netherlands has made notable improvements to its AML/CFT framework in recent years, although there are some outstanding deficiencies including, in relation to the regulation of virtual asset providers.
Jurisdictions under increased monitoring
- In line with the flexible procedures adopted in February 2021 to allow FATF to continue its monitoring programme in light of the COVID-19 pandemic, the FATF has updated its statement for countries under review. Gibraltar is now subject to increased monitoring.
- The FATF congratulated Malta for the significant progress it has made in addressing the strategic AML/CFT deficiencies previously identified by the FATF. As such, Malta will no longer be subject to the increased monitoring process.
Strategic initiatives – information sharing and data protection
- A report, providing observations and lessons learnt from members of the FATF and its global network who have increased private sector information sharing, while meeting domestic data protection and privacy objectives and obligations, will be published in July.
Risk-based approach guidance for the real estate
- Following a public consultation that concluded in April, the FATF will publish, in July, finalised guidance which aims to help those involved in the real estate sector implement risk-based measures to prevent money laundering and terrorist financing.
FATF targeted update on implementation of the FATF standards on virtual assets/ VASPs – travel rule and other developments
- The Plenary discussed a targeted update on the implementation of the FATF standards to prevent the misuse of virtual assets and virtual asset providers (VASPs) for money laundering, and the financing of terrorism and proliferation.
- The report focuses on the implementation of the FATF’s travel rule, which requires VASPs to collect or send information on the identities of the originator and beneficiary with virtual asset transfers. The report stresses the urgent need for jurisdictions to implement and enforce the travel rule. The report will be published at the end of June.
Guidance to implement the FATF standard on beneficial ownership information for legal persons
- The FATF discussed progress in developing guidance that aims to help countries implement the FATF standard on beneficial ownership information for legal persons. This will assist countries in the rapid implementation of these changes. Delegates agreed to seek views from targeted stakeholders before finalising the guidance in October 2022.
Strengthening the FATF standard on beneficial ownership information for trusts and other legal arrangements
- The FATF is considering amendments to strengthen Recommendation 25, which applies to trusts and other legal arrangements. These revisions aim to ensure a balanced and coherent approach to beneficial ownership in the FATF Recommendations. The FATF is also releasing a white paper for public consultation, the deadline for comments is 1 August 2022, 18:00 CEST.
Implementing the strategic vision to strengthen the global network
- The FATF agreed to continue providing support for FATF style regional bodies for the completion of their current mutual evaluation round, and to work with them in preparation of the next mutual round that is expected to start in 2025.
Priorities under the Singapore presidency
- The FATF plenary heard the incoming president, Raja Kumar of Singapore, highlight the priorities of his Presidency, which will start 1 July 2022.
- In line with the strategic priorities agreed by the FATF ministers in April, the work of the FATF will have a particular focus, among other things, on strengthening asset recovery and international cooperation in combating cross-border financial crime, such as cyber-enabled fraud/scams and ransomware. The FATF will publish the FATF priorities under its Singapore presidency on 1 July 2022.