The first quarterly Financial Action Task Force (FATF) plenary of 2021 took place over 22, 24 and 25 February 2021 to discuss developments with respect to anti-money laundering (AML) and counter terrorist financing (CTF). Delegates discussed a number of initiatives relating to FATF’s strategic priorities as well as the AML/CTF frameworks of specific jurisdictions. The FATF summary of developments can be found here.
Key messages from the FATF are as follows:
- FATF will release new guidance during the first week of March 2021 aimed at supporting national supervisors and other authoritative bodies in enhancing their application of a risk-based approach to their supervisory remit;
- A consultation will be launched in March 2021 with respect to FATF guidance on virtual asset service providers (VASPs), including concepts such as stable-coins, the travel rule and peer-to-peer transaction. FATF propose to use the outcomes of the consultation to update its existing VASP guidance in June 2021;
- FATF will also be publishing new guidance relating to the proliferation of weapons of mass destruction (WMD), including preparation of risk assessments to cater for proliferation financing, identification of red flags and commensurate risk mitigation measures. Similarly to its VASP guidance, the FATF plan to launch a consultation on the topic of WMD in March 2021 ahead of updating the guidance itself in June 2021;
- FATF’s mutual evaluation of New Zealand has concluded, with the official report to be published in April 2021. Overall, the FATF commented that “New Zealand’s measures to combat money laundering and terrorist financing are delivering good results”. However, enhancements are still required in areas such as availability of beneficial ownership information, strengthening supervision and implementation of targeted financial sanctions;
- The “grey list” of jurisdictions subject to increased monitoring has been increased by the addition of 4 countries (Burkina Faso, the Cayman Islands, Morocco and Senegal), taking the new total to 19 listed jurisdictions. These countries are actively working with the FATF to remediate the strategic deficiencies identified in their national regimes to combat money laundering, terrorist financing and proliferation of WMDs. Despite increased national efforts, Pakistan remains on the grey list due to ongoing concerns with respect to terrorist financing in particular.
Finally, the FATF concludes that it remains committed to supporting and collaborating with its global partners to strengthen the fight against financial crime. In addition, the FSTF acknowledges that whilst the Covid-19 pandemic has created additional challenges to navigate, it will continue to hold jurisdictions account to high standards with respect to anti-financial crime and adopting innovative and alternative approaches to continued supervision.