Public Consultation on Recommendation 16 on Payment Transparency

26 February, 2024 - 

The Financial Action Task Force (FATF) is considering revisions to Recommendation 16 (R.16), its Interpretive Note (INR.16) and the related Glossary of specific terms, to adapt them to the changes in payment business models and messaging standards.  

R.16/INR.16 needs to be updated to ensure that the FATF Standards remain technology-neutral and follow the principle of ‘same activity, same risk, same rules’. These proposed revisions also aim to help make cross-border payments faster, cheaper, more transparent and inclusive whilst remaining safe and secure; an objective that is part of the G20 Priority Action Plan.

Before finalising the revisions to R.16/INR.16, the FATF would like to hear from all interested stakeholders, in particular from the payment industry, on the proposed revisions to R.16/INR.16 and the Glossary of specific terms used in R.16. The proposed revisions are attached to Explanatory Memorandum that explains the policy intent of the key proposals for revisions in detail. Explanatory Memorandum also presents eighteen questions for consultation across various issues that include:

• Additional transparency requirements on exemption for purchase of goods and services using cards;
• Removal of the withdrawal or purchase of cash or a cash equivalent from R.16 exemption, subject to certain conditions; 
• Improving the content and quality of basic originator and beneficiary information in payment messages;
• Obligations on beneficiary financial institutions to check alignment of beneficiary information in payment messages; and 
• Definition of payment chain and conditions for net settlement.

The FATF recognises that due to the technical nature of this subject, a full consultation will require an ongoing dialogue with the relevant bodies and experts in both public and private sectors. This written consultation is the first step in a wider consultation process, which will also include further discussion and engagement, as needed, informed by the responses to this initial consultation. Please provide responses to this initial consultation by 3 May 2024.

Please provide your input, including any drafting proposals, and your response to consultation questions set out in the Explanatory Memorandum to FATF.Publicconsultation@fatf-gafi.org with the subject-line “Comments of [author] on the proposed revisions to R.16/INR.16”

While submitting your response, please indicate the name of your organisation, the nature of your business, and your contact details. Responses to ‘Questions for consultation’ can be submitted in any format. You may also insert any specific drafting proposals directly in the text of the draft revisions in tracked changes. We will use your contact information only for the purpose of this public consultation and for further engagement with you on this issue. Your comments will also be shared with the FATF delegations in the course of this work unless you indicate otherwise. The FATF will, however, not share this information with third parties without your consent.

At this stage, the FATF has not approved the draft revisions to R.16/INR.16 and will consider the feedback received in public consultation for finalising the revisions. 

We thank you for your input in advance.