Paris, France, 10 January 2020 - On 9 January 2020, supervisors from around the world met to discuss how to supervise and regulate virtual assets and virtual asset service providers (VASPs). This meeting was the first opportunity for supervisors to discuss how to implement these new measures since the FATF finalised them in June 2019.
Supervisors play an important role in ensuring that regulated entities, such as banks and financial institutions, implement the FATF’s standards to detect and prevent money laundering and terrorist financing. The FATF Supervisors’ Forum is an initiative of the Chinese Presidency of FATF to promote more effective supervision by national authorities.
FATF President, Mr. Xiangmin Liu, opened the second meeting of the FATF Supervisors Forum, which brought together 135 representatives from over 50 delegations involved in virtual asset supervision. He underscored the importance of supervision in an effective anti-money laundering and combating financing of terrorism (AML/CFT) regime.
These regimes can only remain effective if they are regularly refined and strengthened, to address evolving risks and threats. The FATF has made substantial progress by agreeing new global standards that will prevent virtual assets and VASPs from being misused for transactions with links to crime or terrorism. The challenge is now to effectively implement these new standards in practise. By bringing together practitioners from around the world, the FATF is beginning to develop a global knowledge base on ‘what works’ in supervising virtual assets. This will help ensure a consistent global approach to supervision and will help the VASP sector adjust to the new regulatory environment.
Participants in this Forum shared their knowledge and experience in virtual assets and VASP supervision. The Forum discussed three main areas:
• The lessons learnt so far from countries that have already established VASP supervisory regimes and are already supervising VASPs. Supervisors provided examples of positive actions that VASPs have taken to comply with their AML/CFT obligations and also discussed common challenges for the VASP sector.
• Common issues when drafting VASP laws and regulations. With the finalisation of the FATF Standards on VASPs in June 2019, all countries must ensure they have an AML/CFT regime for VASPs. Representatives shared their approach to developing an AML/CFT regime for VASPs in their jurisdictions and outlined how they were implementing the FATF’s rules.
• The tools, skills, procedures and technology that supervisors need to effectively supervise VASPs. Participants explored what information sources may be useful, what software and other products can assist, and also what kinds of human resources supervisors may need. The importance of international co-operation was also highlighted, as virtual assets are inherently global products.
This meeting identified a number of areas that require further actions. These will be taken forward at the FATF Plenary and at further meetings of the Supervisors’ Forum, to be held in May 2020.