G20 Leaders support the FATF’s work to address money laundering and terrorist financing risks

22 November 2020

G20 FATF from G20 Saudi Arabia on Vimeo.

 

The Financial Action Task Force is committed to working with the G20 to ensure a strong, sustainable economic recovery from the COVID-19 crisis, FATF President Marcus Pleyer emphasised in remarks to the G20 Leaders’ Summit and G20 Finance Ministers and Central Bank Governors meeting. Addressing G20 leaders, the FATF President said that crime and money laundering undermines just competition, hampers growth, deepens inequality, and erodes confidence in the integrity of the global financial system. 

It remains critical that jurisdictions continue to actively identify, assess, and understand how criminals and terrorists can exploit the COVID-19 pandemic and stop money illicitly flowing out of economies when health services are trying to contain the virus. Given the evolving threats and the constraints on resources as a result of the pandemic, it is essential that competent authorities have appropriate support to enable them to function effectively.

In their communiqué , G20 leaders recognised the FATF’s recent and ongoing work to identify the threats that have arisen as a result of the COVID-19 crisis, and the policy responses to address them. Criminals continue to exploit the pandemic, while the crisis has severely impacted the ability of some governments and the private sector to detect, prevent and investigate money laundering and terrorist financing.

G20 leaders also welcomed the FATF’s recent report clarifying the application of its standards to so-called ‘stablecoins’ to address the risks they pose. The FATF was the first body to develop global standards for virtual assets. The FATF continues to closely monitor the changes in the virtual asset sector, engaging with relevant standard-setting bodies to identify and address the money laundering and terrorist financing risks that emerge.

In their communiqué, G20 leaders reaffirmed their support for the FATF as the global standard-setting body to prevent money laundering, terrorist financing and proliferation financing. This year, the FATF has significantly strengthened the global response to the proliferation of weapons of mass destruction. It has amended its standards to require countries and the private sector to identify and assess the risks of potential breaches, non-implementation, or evasion of targeted financial sanctions related to proliferation financing. Countries and the private sector must also take action to mitigate these risks, as well as to enhance domestic co-ordination. The FATF will develop guidance to help the implementation of these new requirements, in a manner that is consistent with financial inclusion goals. The FATF will also revise its assessment methodology to assess countries’ effective implementation of these revised requirements.

G20 leaders committed to strengthening the FATF’s Global Network of regional bodies, which brings together over 200 jurisdictions, and supporting their expertise in mutual evaluation reports. The FATF will continue to support the Global Network to prevent criminals and terrorists from accessing and exploiting financial systems.

The FATF reaffirms its commitment to contribute to an inclusive, sustainable and resilient future by working closely with the G20 on the following issues: 

  • Environmental crime, which sees profits in the range of $90-260bn per annum and rising 5-7% every year. International criminal gangs and militant groups profit from looting natural resources, such as illegal logging, land clearing and unlawful waste disposal. The FATF will conduct work to help public authorities and the private sector understand how illicit money fuels these activities and how to tackle them.
  • Technology and big data, which can potentially improve anti-money laundering and counter-terrorist financing systems in the future. The FATF will analyse the opportunities and risks while continuing its work on virtual assets and so-called stable coins.
  • Migrant smuggling, with its terrible human cost which still sees thousands exploited by criminal gangs.
  • Illicit arms trafficking, to explore the funding behind it in the context of terrorist financing.

By removing the profits of crime, authorities can take away the incentive which drives crime in the first place. This is why all governments must fully and effectively implement FATF standards, even in politically challenging areas. Leading by example, G20 members can spur others into action and make a difference for a better and safer world.

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