FATF’s policy concerning implementation and de-listing in relation to NCCTs (Annex 2 in the Annual NCCT Reports)

The FATF has articulated the steps that need to be taken by Non-Cooperative Countries or Territories (NCCTs) in order to be removed from the NCCT list.  These steps have focused on what precisely should be required by way of implementation of legislative and regulatory reforms made by NCCTs to respond to the deficiencies identified by the FATF in the NCCT reports.  This policy concerning implementation and de-listing enables the FATF to achieve equal and objective treatment among NCCT jurisdictions.

In order to be removed from the NCCT list:

1. An NCCT must enact laws and promulgate regulations that comply with international standards to address the deficiencies identified by the NCCT report that formed the basis of the FATF’s decision to place the jurisdiction on the NCCT list in the first instance.
2. The NCCTs that have made substantial reform in their legislation should be requested to submit to the FATF through the applicable regional review group, an implementation plan with targets, milestones, and time frames that will ensure effective implementation of the legislative and regulatory reforms.  The NCCT should be asked particularly to address the following important determinants in the FATF’s judgement as to whether it can be de-listed: filing of suspicious activity reports; analysis and follow-up of reports; the conduct of money laundering investigations; examinations of financial institutions (particularly with respect to customer identification); international exchange of information; and the provision of budgetary and human resources.
3. The appropriate regional review groups should examine the implementation plans submitted and prepare a response for submission to the NCCT at an appropriate time.  The Chairs of the four review groups (Americas; Asia/Pacific; Europe; Africa and the Middle East) should report regularly on the progress of their work.  A meeting of those Chairs, if necessary, to keep consistency among their responses to the NCCTs.
4. The FATF, on the initiative of the applicable review group chair or any member of the review group, should make an on-site visit to the NCCT at an appropriate time to confirm effective implementation of the reforms.
5. The review group chair shall report progress at subsequent meetings of the FATF.  When the review groups are satisfied that the NCCT has taken sufficient steps to ensure continued effective implementation of the reforms, they shall recommend to the Plenary the removal of the jurisdiction from the NCCT list.  Based on an overall assessment encompassing the determinants in paragraph 2, the FATF will rely on its collective judgement in taking the decision.
6. Any decision to remove countries from the list should be accompanied by a letter from the FATF President:
   (a) clarifying that de-listing does not indicate a perfect anti-money laundering system;
   (b) setting out any outstanding concerns regarding the jurisdiction in question;
   (c) proposing a monitoring mechanism to be carried out by FATF in consultation with the relevant FATF-style regional body, which would include the submission of regular implementation reports to the relevant review group and a follow-up visit to assess progress in implementing reforms and to ensure that stated goals have, in fact, been fully achieved.
7. Any outstanding concerns and the need for monitoring the full implementation of legal reforms should also be mentioned in the NCCT public report. 

Outline for Monitoring Progress Of Implementation
Substance

The FATF will monitor progress of de-listed jurisdictions against the implementation plans, specific issues raised in the updated progress reports (e.g., phasing out of unidentified accounts) and the experience of FATF members.  Subjects addressed may include, as appropriate: 

• the issuance of secondary legislation and regulatory guidance;
• inspections of financial institutions planned and conducted;
• STR systems;
• process for money laundering investigations and prosecutions conducted;
• regulatory, FIU and judicial co-operation;
• adequacy of resources;
• assessment of compliance culture in the relevant sectors.

Recommendation 21

Counter-measures