Documents

Outcomes from the Plenary meeting of the FATF, Paris, 16-18 October 2013

Paris, 18 October 2013 - Under the Russian Presidency, the first FATF Plenary meeting of FATF-XXV was held on 16-18 October 2013. 

FATF Decisions

The FATF took important new steps to protect the international financial system from abuse by:

Follow-reports to the mutual evaluations of New Zealand and the Russian Federation.

The FATF has approved and published the follow-up reports for New Zealand and the Russian Federation1. These countries were placed in the regular follow-up process as a result of partially compliant and non-compliant ratings for certain core and key Recommendations in their mutual evaluation reports of October 2009 and June 2008 respectively. Both countries have since taken sufficient action to address these deficiencies and have therefore been taken off the regular follow-up process.

Read more and
download the report
Read more and
download the report

 

Best Practices Paper: The Use of the FATF Recommendations to Combat Corruption

The FATF Recommendations target money laundering and terrorist financing, and are also powerful tools to combat corruption. When effectively implemented, the FATF Recommendations facilitate the detection, tracing and confiscation of corruption proceeds. Although mutually reinforcing, AML/CFT and anti-corruption efforts are not always brought together effectively. The G20 Leaders’ Declaration from the St. Petersburg Summit highlights that leveraging AML/CFT measures to fight corruption will remain a significant area of growing cooperation between the G20 anti-corruption experts and the FATF. This paper is an important step, giving guidance and best practices to policy makers and practitioners on how to use AML/CFT measures to combat corruption.

Click for more and download report.

Typologies Report: Terrorist Financing in West Africa

The Inter Governmental Action Group against Money Laundering in West Africa (GIABA) and the FATF collaborated on a typologies research project to identify the methods used by terrorists, terrorist groups, and their supporters in the West African region to collect, transfer and utilise funds.

The project team used data provided by experts based in five West African countries where there have been serious and frequent incidences of terrorism:  Burkino Faso, Mali, Niger, Nigeria and Senegal.   The report provides case studies, from which key indicators and red flags have been generated, and provides Recommendations to West African countries and regional/international authorities and development partners to improve their AML/CFT efforts. The report aims to help policymakers, regulatory and enforcement authorities as well as reporting entities to gain a better understanding of the nature and dynamics of terrorist financing in the West African region.

Click for more and download report. 

Typologies Report: The Role of Hawala and Other Similar Service Providers in ML/TF

Hawalas and other similar service providers (HOSSPs) arrange for transfer and receipt of funds or equivalent value and settle through trade, cash, and net settlement over a long period of time. what makes them distinct from other money transmitters is their use of non-bank settlement methods. This typology reviews three major types of HOSSPs: pure traditional (legitimate) ones; hybrid traditional (often unwitting) ones; and criminal (complicit) ones. Distinct ML/FT risks apply to each. there are several reasons why HOSSPs continue to pose a money laundering and terrorist financing vulnerability. These include a lack of supervisory will or resources; settlement across multiple jurisdictions through value or cash outside of the banking system in some cases; the use of businesses that are not regulated financial institutions; the use of net settlement and the commingling of licit and illicit proceeds. While the settlement through value or trade that masks the individual fund transfers is a source of vulnerability, the most significant reason for concern is lack of supervisory resources and commitment to effective regulation.

Click for more and download report.

Typologies Report: Money Laundering and Terrorist Financing through Trade in Diamonds

The FATF and the Egmont Group of Financial Intelligence Units collaborated on a typologies research project to identify the ML/TF vulnerabilities and risks of the “diamond pipeline”, which covers all sectors in the diamond trade: production, rough diamond sale, cutting and polishing, jewellery manufacturing and jewellery retailers.  Based on research conducted, analysis of case studies collected by the project team and after consultation with the private sector, the report concludes that the diamonds trade is subject to considerable vulnerabilities and risks.  The closed and opaque nature of the diamonds markets and the high value of diamonds combined with a lack of expertise in this area on the part of the authorities have left this industry susceptible to abuse by criminals.  The case studies included in the report demonstrate the creative methods that criminals have used to exploit diamonds trade for the purpose of money laundering and terrorist financing.  This report aims to help build awareness with the regulatory, enforcement and customs authorities as well as reporting entities about risks and vulnerabilities of the diamonds trade, and how to mitigate them.

Click for more and download report.

AML/CFT Improvements in Morocco and Nigeria

The FATF congratulates Morocco and Nigeria for the significant progress made in addressing the strategic AML/CFT deficiencies identified in their action plans agreed with the FATF. These countries will no longer be subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process. These countries will work with their respective FATF-Style Regional Bodies as they continue to address the full range of AML/CFT issues identified in their Mutual Evaluation Reports.

Reviewing the voluntary tax compliance programmes in Argentina and Belgium

The FATF heard reports on the voluntary tax compliance (VTC) programmes of Argentina and Belgium. Belgium’s programme was found to be consistent with the FATF’s four basic principles on VTC.2 On Argentina, while some provisions of the country’s VTC legislation appears to limit the application of AML/CFT measures in the country in relation to the exception of tax evasion and customer due diligence (CDD) requirement, the country has issued regulations for implementation of the programme to ensure all AML/CFT measures are in place and informed that financial institutions in the country have continued to apply AML/CFT measures, including CDD and STR reporting. The FATF, while continuing to monitor the implementation of the programme, urges all countries to apply all AML/CFT measures to their VTC programmes in accordance with the FATF’s four principles on the VTC. The country committed to ensuring that the VTC programme is consistent with the FATF Recommendations and principles on the VTC.

See also:             Best Practices: Managing the anti-money laundering and counter-terrorist financing policy implications of voluntary tax compliance programmes

____________________________ 

[1]           Discussion of the follow-up report by the Russian Federation was chaired by the Vice-President, Mr. Roger Wilkins of Australia.

[2]           The FATF’s four principles on the VTC: (i) the effective application of AML/CFT measures during the implementation of VTC programmes; (ii) the prohibitions on exempting VTC programmes from AML/CFT requirements in the FATF Recommendations; (iii) domestic co-ordination and co-operation between relevant competent authorities; and (iv) international co-operation, i.e. mutual legal assistance. See also the FATF’s best practices paper, International Best Practices: Managing the Anti-Money Laundering and Counter-Terrorist Financing Policy Implications of Voluntary Tax Compliance (VTC) Programmes (available at: www.fatf-gafi.org).