FATF President's Speech at the CFATF Plenary Meeting November 2012

Publication details




FATF General

by FATF President Bjørn S. Aamo at

Carribean Financial Action Task Force XXXVI Plenary Meeting

British Virgin Islands 

14 November, 2012


His Excellency Governor Boyd McCleary,

Hon. Premier & Minister of Finance of the Virgin Islands Dr. Orlando Smith,

Hon. Attorney General of the Virgin Islands Dr. Christopher Malcolm,

Chairman of CFATF Mr Manuel Gonzáles,

Incoming Chair of CFATF Mr Cherno Jallow,

Executive Director of CFATF Mr Calvin Wilson,

Dear colleagues,


It is my honour to be able to attend this 36th CFATF Plenary meeting here in Road Town, Virgin Islands. I would like to take the opportunity to thank all Virgin Islanders for your warm welcome to your country. I immediately felt at home when I arrived.

Your agenda is heavy for today, so I do not intend to speak for a long time. Today, I only wanted to share with you my thoughts on the latest developments in CFATF, your role in the Global Network of FATF and FSRB, a few words on financial inclusion, the upcoming fourth round of assessments of FATF and CFATF, and the on strengthening the Caribbean region.

CFATF developments

Over the last two years, CFATF Chairs and deputy Chairs from the former Netherlands Antilles, Cayman Islands, Venezuela and Virgin Islands have been working hard with the membership and Secretariat to reflect on the functioning of CFATF and to improve its functioning. An ambitious action plan was approved by Ministers, and actively monitored by FATF since June 2011.

Today, I am happy to confirm that the FATF at its meeting in October in Paris, France, has decided that the monitoring of CFATF to FATF can be ended in light of the impressive progress that has been made to date. According to my own count, you have addressed over 36 action items from the action plan. I congratulate CFATF with this result. Your improvements benefit all members of the Global Network of FATF and FSRBs, yet it is the CFATF members that benefit most of all from this.

The FATF Plenary also decided, in line with the proposal from CFATF Ministers, that CFATF should continue providing updates to FATF on the remaining items from the action plan. It is important for FATF and for you that these remaining issues be solved as well.

The FATF Plenary also asked me to send a letter to Chairman Gonzáles to congratulate CFATF about this achievement, and to inform CFATF in detail of the decisions that have been taken. I have done so, and I believe that this letter has been circulated to all members. So I do not need to go into the details of the FATF discussion at this stage.

The Global Network

The FATF has been considering ways to further reinforce the global AML/CFT network. In October last year, we agreed on a new set of high level principles and objectives. It is important to stress that the newly agreed objectives apply to all bodies – both the FATF and the FSRBs – and thus form a clearer and more balanced foundation for the global AML/CFT network. This is also in line with the new FATF Mandate that was adopted in April 2012.

Based on these Principles, we have also created the Global Network Coordination Group in June 2012, a new working group in FATF. I am sure that most of you have already heard that one of the two co-chairs of this group is your deputy Executive Director Ms Dawne Spicer. She is the first non-FATF co-chair of an FATF working group, and she is also the first woman in over 20 years to be co-chair in FATF. I was quite surprised to learn this. I am quite certain that the example you provide, in the future will encourage other able women to take on similar responsibilities within out FATF-network.

The GNCG has met twice so far. One issue it discussed is the suggestion from the CFATF Chair that other FSRBs undergo a similar reform process as CFATF has done. Our members agreed with this, and we have urged FSRBs to learn from CFATF experience. This would be a voluntary process. We have also discussed and approved a procedure for raising issues with any of the bodies of the Global Network in GNCG. A possible outcome of such a procedure may be obliging bodies to undergo a reform process like CFATF did. If that should occur, I would be happy if CFATF could consider providing its experience and assistance to the body concerned by sharing the experiences of your reform process.

Financial inclusion

A few words on financial inclusion. I know this is a topic that is of interest to many countries in this region. Part of the revised FATF Recommendations is the introduction of the risk based approach. The purpose of the risk-based approach is to allow a more efficient allocation of resources to combating money laundering and terrorist financing, both by governments and financial institutions. It should mean more effective implementation overall, by focusing resources and attention on the highest risk sectors and activities.

The risk-based approach should also enable governments to enhance their efforts on financial inclusion. I realise very well that many countries the globe have shied away from applying financial inclusion measures because of a fear that this would make their country less compliant with the FATF Recommendations. However, there should be no doubt that a well implemented risk-based approach is a good basis for successfully applying financial inclusion measures in compliance with the revised FATF Recommendations. Financial inclusion brings people into the financial system – and from an AML perspective the measures that reduce the use of cash are usually good measures. In the FATF we are working on revised guidance on financial inclusion, as well as on new guidance on new payment methods. I encourage all CFATF members to take part in the drafting of these documents at the FATF.

Fourth round of assessments

The mutual evaluation process is what gives the FATF Recommendations teeth. Therefore, all countries in the Global Network will be assessed for compliance with the revised Recommendations, and the next round of assessments by FATF is scheduled to start in the 4th quarter of 2013 and for FSRBs soon thereafter.

This new round of mutual evaluations will place a much stronger emphasis on the assessment of effective implementation of the revised FATF Standards, and not only technical compliance. The new approach to assess effectiveness, based on objectives, will be integrated in the Methodology. Apart from developing the new Methodology, the FATF is also working on guidance, on issues where further (non-binding) advice on implementation would be useful. We encourage the CFATF to continue its active involvement in this on-going work.

Looking forward to the next round of mutual evaluations, however, must not withdraw the attention from the current follow-up procedures. The CFATF’s follow-up procedures to mutual evaluations have been integrated with the CFATF ICRG procedures. For the fourth round of assessments, the FATF will have to find a better balance to coordinate between its own follow-up and ICRG processes. These procedures should not be duplicative, but reinforce each other. As the FATF will work with FSRBs on a consolidated assessment and follow-up procedure for FATF and FSRBs in common.

Strengthening of the Caribbean region

Dear colleagues, where good AML/CFT systems exist, the Caribbean region should continue to  market these to the outside world. This may be difficult achieve for the often very small nations in this region. However, if this region manages to implement lasting reforms in CFATF, and if this region ensures that the output produced by CFATF, such as mutual assessments, are of equal quality to the output of the FATF, then you will have turned CFATF into a strong tool to turn the perceptions of the outside world. This will require continued membership engagement and a strongly resourced Secretariat. I believe that with your successes in implementing the action plan, you have laid down a foundation for being able as a region to achieve this.


Finally, Chairman González, as this will be your last Plenary meeting as CFATF chair, I would like to thank you for our excellent cooperation, also on behalf of the previous President of FATF. 

Incoming Chair Jallow, I wish to congratulate you with your Chairmanship, and I am looking forward to having you at our next meetings in Paris in February and June in Oslo.

Dear colleagues, it was an honour for me to speak to you today and to be your guest. I wish you all the success in your meetings this week.