Delegates representing 206 members of the global network and observer organisations discussed key issues, including amendments to the standards to strengthen beneficial ownership requirements for trusts and legal arrangements.
The plenary also finalised guidance on improving beneficial ownership transparency to prevent shell companies and other opaque structures from being used to launder illicit funds.
Rosemont International summarises for you the main points of this plenary.
FATF Watch List
The list of jurisdictions under enhanced scrutiny (or grey list) has been amended:- South Africa and Nigeria have been added to the list. Both countries commit to promptly address the identified strategic deficiencies within the agreed timeframe.
- Morocco and Cambodia are (identified in 2019 and 2021 respectively) removed from the list in view of progress in improving their respective AML/CFT regimes covered by their individual action plans.
FATF guidance
In March 2022, the FATF issued a list of guidelines for higher global standards. The February 2023 Plenary provided some guidance to be published in March 2023:- Beneficial ownership of legal persons: Finalisation of a guidance document to assist countries in implementing the requirements of Recommendation 24 that information on beneficial owners be held by a public authority or body operating as a registry (or other mechanism for effective access).
- Beneficial ownership of legal arrangements: The FATF is seeking input from stakeholders via public consultation and white paper to publish a guidance document to assist countries in implementing the revised requirements.
- Ransomware: Given the transnational nature of ransomware attacks, it is essential that authorities in each country build on and leverage existing international cooperation mechanisms to successfully combat the laundering of ransomware payments. Authorities also need to develop the skills and tools to quickly gather key information, trace nearinstantaneous virtual transactions and recover virtual assets before they dissipate. This means that authorities must extend their collaboration beyond their traditional counterparts to include cybersecurity and data protection agencies. It is essential that authorities in each country build on and leverage existing international cooperation mechanisms to successfully combat ransomware payment laundering.
- Virtual assets and virtual asset service providers: As the report on the disruption of financial flows from ransomware shows, the lack of regulation of virtual assets in many countries creates opportunities that criminals and terrorist financiers exploit. A roadmap, including a review of current levels, will be created to strengthen the implementation of standards.
- Art and Antiques Market: The FATF has finalised a report exploring the link between money laundering and art and antiques. The trade in highvalue art and antiques can attract criminals who launder the proceeds of drug trafficking, corruption and other crimes. This results in a lack of investigative resources and expertise and difficulties in conducting cross-border investigations. The report includes a list of risk indicators that can help public and private sector entities identify suspicious activity in the art and antiquities markets, and also highlights the importance of identifying and tracing cultural objects involved in money laundering or terrorist financing in a timely manner. The report includes some good practices that countries have adopted to address the challenges they face, including the creation of specialised units and access to relevant databases and cooperation with experts and archaeologists to help identify, trace, investigate and repatriate cultural objects.
FATF membership
- Russia: The FATF strongly condemns the Russian Federation's war of aggression against Ukraine and is "deeply concerned about the arms trade relationship between the Russian Federation and UN-sanctioned jurisdictions, and the malicious cyber activities emanating from Russia". The FATF has therefore decided to suspend the Russian Federation's membership, but it remains responsible for its obligation to implement the standards and must continue to meet its financial obligations.
The FATF assessed the membership applications of two jurisdictions: Indonesia and Qatar.
- Indonesia: While Indonesia also has a good track record in combating terrorist financing, using financial intelligence and domestic and international cooperation, it needs to continue its efforts in combating money laundering before it can meet the requirements for FATF membership.
- Qatar: Based on the FATF's analysis, Qatar has made a number of improvements to its AML/CFT regime and its technical compliance with the FATF standards is very strong. However, Qatar needs to make significant improvements in certain areas, including in its law enforcement response to money laundering and terrorist financing in particular and its use of financial intelligence.
The full reports from both jurisdictions will be available in May, following the completion of the full review.
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Credit Pictures: www.fatf-gafi.org