OUTCOMES OF THE FATF PLENARY

On 29th June, FATF published details of the outcomes of the Plenary held in Paris, 27th to 29th June.  These include –

  • a final report, “Anti-money laundering and counter terrorist financing for judges and prosecutors”, which highlights the relevant underlying and supporting elements of the wider AML/CFT regime. It also provides good practices in the investigation, prosecution and conviction for both money laundering and terrorist financing; confiscation; and mutual legal assistance, extradition & other co-operation;
  • adopted a joint FATF-APG report which analyses the financial flows associated with the fast-growing crime of human trafficking, both as a money laundering predicate and potential source of terrorist financing, updating the FATF’s 2011 Human Trafficking report. The report provides good practices and indicators specific to the type of human trafficking as specified in the Palermo Protocol: human trafficking for forced labour, sexual exploitation or for the removal of organs.  The report also responds to a call from the UN Security Council for the FATF to consider the links between human trafficking and terrorist financing;
  • beneficial ownership: adopted a joint FATF-Egmont Group study that looks at the mechanisms and techniques that can be used to obscure the ownership and control of illicitly obtained assets, drawing on over 100 case studies, the experiences of law enforcement experts, the outcomes of FATF Mutual Evaluation Reports, and the insights provided by academic reports and other studies. The report aims to raise awareness with national authorities, financial institutions and other professional service providers about the risks involved;
  • adopted a report which aims to assist authorities to target professional money launderers (PML), as well as the structures that they utilise to launder funds, in order to disrupt and dismantle the groups that are involved in proceeds-generating illicit activity so that crime does not pay;
  • considered Brazil’s progress in addressing the deficiencies identified in its mutual evaluation report. Recognising that Brazil has taken further steps to improve its counter terrorist financing regime, deficiencies nevertheless remain regarding targeted financial sanctions and Brazil has failed to meet the deadlines in the action plan it agreed to.  As such, this is now a membership issue for the FATF to consider in February 2019 and Brazil is encouraged to address those deficiencies as soon as possible;
  • FATF maintains its February 2018 public documents which identify jurisdictions that may pose a risk to the international financial system (including the grey listing of Pakistan, see below);
  • FATF has identified Pakistan as a jurisdiction with strategic AML/CFT deficiencies. The country has developed an action plan with the FATF to address the most serious deficiencies and FATF welcomed the high level political commitment of Pakistan to their action plan;
  • Iraq and Vanuatu will no longer be subject to the FATF’s monitoring under its on-going global AML/CFT compliance process;
  • whilst disappointed with Iran’s failure to implement its action plan to address its significant AML/CFT deficiencies, given the Iranian government’s continued efforts to finalise and pass amendments to its AML and CFT laws, FATF decided to continue the suspension of counter-measures for Iran;
  • delegates discussed 2 draft risk-based approach guidance papers for the insurance and securities sectors. These papers will be released for public consultation following the Plenary. The finalised reports, which will take into account the feedback received during the public consultation, will be adopted by the FATF Plenary in October 2018; and
  • FATF will hold an inter-sessional meeting in September on how the FATF Standards apply to virtual currencies/crypto-assets.

http://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-plenary-june-2018.html

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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