Rome, 22 June 2012 - Under the Italian Presidency, the third FATF Plenary meeting of FATF-XXIII was held in Rome on 20-22 June 2012.
FATF Decisions
The FATF took important new steps to protect the international financial system from abuse by:
- Producing two public documents as part of its ongoing work to identify jurisdictions that may pose a risk to the international financial system:
- Receiving an update on progress made by Argentina and Turkmenistan
- Calling on Turkey to enact adequate counter terrorist financing legislation
- Reviewing the voluntary tax compliance programmes in Spain, Pakistan and Curaçao
- Publishing three reports which outline new methods and trends in money laundering and terrorist financing:
- Operational Issues – Financial investigations Guidance
- Specific Risk Factors in Laundering the Proceeds of Corruption
- Illicit Tobacco Trade
- Welcoming the Anti-Money Laundering Liaison Committee of the Franc Zone (CLAB) as an observer to the FATF
- FATF Global Network
Update on progress made by Argentina
The FATF welcomed the continued progress made by Argentina and the substantial steps taken in addressing its AML/CFT deficiencies identified in the mutual evaluation in October 2010, in particular the new Presidential Decree creating a framework for freezing of terrorist-related assets. The FATF also welcomed Argentina’s updated action plan on measures and milestones to assess Argentina’s effective implementation of its money laundering offence, and urges Argentina’s continued progress in this area for October 2012. The FATF will continue to work with Argentina in the follow-up process and encourages Argentina to continue addressing its remaining AML/CFT deficiencies.
AML/CFT improvements in Turkmenistan
The FATF welcomes Turkmenistan’s significant progress in improving its AML/CFT regime and notes that Turkmenistan has largely met its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified. Turkmenistan is therefore no longer subject to FATF’s monitoring process under its on-going global AML/CFT compliance process. Turkmenistan will work with EAG as it continues to address the full range of AML/CFT issues identified in its Mutual Evaluation Report, and further strengthen its AML/CFT regime.
FATF calls on Turkey to enact adequate counter terrorist financing legislation
As a member of the FATF, Turkey has committed to implement the FATF standards. Since its mutual evaluation report in February 2007, Turkey has taken a number of steps toward improving its AML/CFT regime. However, thus far, Turkey has failed to do so in two important areas, namely criminalisation of terrorist financing and establishing a legal framework for identifying and freezing terrorist assets. A delegation led by the FATF President travelled to Turkey in May 2012 to convey the concerns of the FATF to relevant Ministers, representatives of the Turkish Grand National Assembly and other officials. The FATF now calls on Turkey to fulfil its FATF membership commitment by enacting counter terrorist financing legislation that adequately addresses these shortcomings. If adequate counter terrorist financing legislation has not been enacted by October 2012, the FATF will initiate discussions on Turkey’s membership in the FATF.
Voluntary tax compliance (VTC) programmes
The FATF heard reports on the VTC programmes of three jurisdictions: Spain, Pakistan and Curaçao. The FATF decided to take no further action in relation to Spain and Pakistan, as their programmes were found to be consistent with the FATF’s four basic principles on VTC. There are initial concerns about the potential impact of the VTC programme in Curaçao on the effective application of AML/CFT measures. Curaçao committed to ensuring that its VTC programme is consistent with the four basic principles, and providing the FATF with additional information and clarifications. The FATF will decide at its next Plenary whether further action should be taken in relation to Curaçao.
Operational Issues – Financial investigations Guidance
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| Operational Issues - Financial investigations guidance | |
The FATF Recommendations are designed to detect illicit financial activity, protect the integrity of financial systems, bring criminals to justice and prevent threats to national security. Financial investigations are one of the core elements in the fight money laundering and terrorist financing. For these investigations to be effective, a country needs to have a well-functioning operational framework: law enforcement and investigative authorities need to have the necessary responsibilities and powers and a framework of cooperation with domestic partners and international counterparts needs to exist. The FATF has issued guidance to help countries understand the important role of law enforcement in conducting money laundering, terrorist financing and asset-tracing investigations. The guidance also provides strategies and techniques which are intended to assist countries in increasing the effectiveness of such investigations.
Operational Issues - Financial Investigations Guidance.
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Specific Risk Factors in Laundering the Proceeds of Corruption
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Specific Risk Factors in Laundering the Proceeds of Corruption
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The FATF report ‘Laundering the Proceeds of Corruption’, published in 2011, analysed the relationship between corruption and money laundering. The FATF has continued with this work to explore whether specific types of business relationships, customers or products are more at risk of corruption-related money laundering. The FATF has now adopted another report that lays out specific risk factors related to laundering of corruption proceeds.
The , adopted in February 2012, require that additional measures for specific customers and activities are in place. Specifically, appropriate risk management systems need to be in place to determine whether a customer or beneficial owner is a politically exposed person. This report should assist practitioners in the financial sector to better understand and identify the risk factors that may indicate the laundering of corruption proceeds.
Specific Risk Factors in the Laundering of Proceeds of Corruption - Assistance to reporting institutions.
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Illicit Tobacco Trade
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Illicit Tobacco Trade
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The FATF has completed a typologies research on the illicit trade in tobacco. This is a global problem that generates significant revenue: it represents approximately one tenth of the global trade in cigarettes which is estimated at USD 40.5 billion per year. In addition to its financial impact, illicit trade in tobacco also creates substantial loss of tax revenue. This FATF report analyses the extent of money laundering and terrorist financing vulnerabilities of the illicit tobacco trade at global, regional and domestic levels. Supported by case studies, it provides an overview of existing responses to the phenomenon and will assist jurisdictions in knowledge building and the identification of the consequences and elements that facilitate the illicit trade in tobacco.
Illicit Tobacco Trade. |
The Anti-Money Laundering Liaison Committee of the Franc Zone (CLAB)
The FATF welcomed the Comité de Liaison Anti-Blanchiment de la Zone Franc (CLAB - Anti-Money Laundering Liaison Committee of the Franc Zone) as a new FATF observer organisation.
The CLAB is an AML/CFT specialised committee established in 1999 by the Finances Ministers of the Franc Zone. It gathers key actors of the Western and Central Africa regions as well as of the Comoros, in particular the central banks, banking supervisory authorities and the commissions of the West Africa Economic and Monetary Union and of the Central Africa Economic and Monetary Community. It plays an important role in promoting the adoption and effective implementation of adequate AML/CFT regimes in the 15 African countries involved. This work will be further enhanced by a deeper co-operation between the FATF and the CLAB. The participation of the CLAB in the work of the FATF will also strengthen outreach to these regions in the context of AML/CFT.
Engagement with members of the FATF Global Network
The FATF is committed to promoting effective global implementation of the revised FATF Recommendations. As part of this commitment, the FATF is working closely with FATF-style regional bodies (FSRBs) to move toward more harmonisation in the application of FATF and FSRB processes. During the Rome Plenary, the FATF President met with the Presidents of the FSRBs in what has now become an annual “summit” of the members of the FATF Global Network. This year’s meeting provided an opportunity for high-level global co-ordination among Network members on the strategy for achieving greater consistency in the evaluations that will be carried out by the FATF and the FSRBs in the next round of mutual evaluations.
FATF President
Rome, 22 June 2012
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