Speech by FATF President Vladimir Nechaev at the GAFISUD Plenary meeting

28th Plenary Meeting of the Grupo de Acción Financiera de Sudamérica (GAFISUD)

Montevideo, Uruguay, 12 December 2013

Introduction

Mr President, Mr Executive Secretary, delegates, ladies and gentlemen.  Thank you very much for the invitation to attend the 28^th Plenary Meeting of GAFISUD.  I am happy to be with you here in Montevideo to address you today and participate in your important meetings this week.

I understand that two of GAFISUD’s presidents have later become presidents of the FATF. I too chaired an FATF-style regional body – MONEYVAL – for several years before serving in my current position.  This clearly demonstrates the important work of the FATF-Style regional bodies (FSRBs), as the FATF continually draws upon the experience of the FSRBs to help us lead and further strengthen the FATF and the global network to combat money laundering and the financing of terrorism and proliferation.

I would therefore like to speak for a few minutes about GAFISUD’s contributions to this global network, as they directly contribute the FATF’s priorities during the Russian presidency.

Expansion of the network

GAFISUD has been one of the strongest FATF-style regional bodies since its founding in 2000.  GAFISUD has been steadily increasing its membership in recent years including bringing Cuba in the anti-money laundering/countering the financing of terrorism (AML/CFT) network for the first time a year ago, and Honduras and Guatemala in July. I understand you’ll be considering adding another new member at the beginning of your agenda. The expansion of the membership means more countries are brought into the global network which now consists of more than 190 jurisdictions.  This strengthens our connections and our efforts to combat the global problems of money laundering and the financing of terrorism and proliferation.  Combating these threats is an international endeavour that requires strong efforts by all countries and their coordination.

The FATF Standards and the next round of mutual evaluations

I want to thank you for endorsing the revised FATF Recommendations last year, the Methodology for assessing compliance with these Recommendations in July, and continually promoting the standards in the region. Implementing the revised standards will be a challenge for all countries. As you know, we will all look not only at how countries are doing on paper, but how effectively they are applying the principles in practice —effectively taking money away from criminals and protecting our financial systems. The FATF and the global network will also have to ensure the high quality and consistency of our reports, which will therefore identify the strengths of our AML/CFT systems, and help us identify areas for improvement.

But GAFISUD is preparing for this challenge. You have already held several training seminars, including what I hear to be a successful one last month in Rio de Janeiro, and you’ll be the first FSRB to adopt a mutual evaluation – of Cuba – pursuant to the new standards next December. So, I can also thank Cuba for being the first to volunteer for this process. Your Executive Secretary is also participating in the FATF’s first evaluation – of Spain – and this experience should prove very useful in your upcoming evaluations and to the global network through the FATF’s Global Network Coordination Group. During this plenary meeting you will be adopting your procedures for this fourth round of mutual evaluations. As you may know, the FATF with the input from all FSRBs, will be considering and adopting the consolidated procedures that will be used by the assessing bodies, including the FATF, the FSRBs, the IMF, and the World Bank. These consolidated procedures will be the product of extensive discussions and agreement between all the parties and should provide the basis for producing high quality and consistent mutual evaluation reports across the global AML/CFT network. The consolidated procedures are being designed to include some flexibility, but it is essential that they be aligned in all the assessing bodies so that we have an equivalent approach. So I welcome GAFISUD’s input into that process, and I also look forward to your discussions this week.

Risk analysis and financial inclusion

I would also like to thank you for your work on two very important topics for the FATF: risk analysis and financial inclusion.  These are two very inter-related topics, which also affect a number of other issues.  So I am happy to hear that GAFISUD has a working group to specifically look at these issues.  Evaluation of national ML/FT risks – and therefore being able to respond to these risks – is a fundamental new part of the FATF Recommendations. This is why we called it “Recommendation 1.”  Your work to identify regional risks, guide GAFISUD members in conducting national risk assessments and applying the risk based approach will greatly help the region, not only in formal compliance with the recommendations, but in responding effectively to risks.

A well-implemented risk-based approach is also a good basis for successfully applying financial inclusion measures in compliance with the revised FATF Recommendations. The promotion of formal financial systems and services is central to any effective and comprehensive AML/CFT regime.  Earlier this year the FATF issued updated Revised Guidance on AML/CFT and Financial Inclusion, without compromising the measures that exist for the purpose of combating crime. I therefore encourage GAFISUD’s continued work on financial inclusion that will assist your members to do the same.

Working Group on Operational Support

GAFISUD is also doing interesting and useful work to improve the application of the FATF Recommendations through your Working Group on Operational Support (“Grupo de Trabajo de Apoyo Operativo”) – improving your region’s understanding of how to apply measures to politically exposed persons (PEPs), further developing GAFISUD’s Assets Recovery Network to enhance information exchange and asset recovery, and studies on cross-border movements of cash in the region.   These important “operational” aspects will also assist members to gain knowledge on how the standards are working in practice.

Conclusion

Money laundering and the financing of terrorism and proliferation are continuing threats to the economies and stabilities of all our countries. As criminals adapt, we must continue to adapt and coordinate in order to face these issues together.  GAFISUD is a strong partner of the FATF and your on-going work is essential to the success of the global network. 

Thank you again for the honour to address your plenary of representatives. Mr President, I congratulate you for Uruguay’s leadership through another successful year in GAFISUD and its achievements in 2013. And I wish all the best to Colombia who will take over the GAFISUD presidency next year.

I am very much looking forward to participating in your Plenary meeting, and I wish you all the success this week. 

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