Outcomes FATF Plenary, 26-28 June 2024

FATF members achieved a key strategic milestone by approving revised criteria for prioritising countries for its International Cooperation Review Group (ICRG) review process for countries with strategic AML/CFT deficiencies that present a risk to the international financial system (i.e., FATF’s grey or blacklisting), which will be applied to the next round of assessment. This updated prioritisation criteria is one of several new measures designed to ensure that the FATF’s listing process continues to be risk-based, fair, transparent, and cognisant of the capacity challenges least developed countries face.

Members agreed how countries will be assessed for their compliance with  the recently revised FATF Standards on asset recovery and related international cooperation, which were adopted in October 2023. Going forward, each country will need to demonstrate that, among other measures, they are prioritising asset recovery; competent authorities are identifying and tracing criminal property; confiscation orders are obtained and enforced to deprive criminals of the proceeds of crime; and that they are providing constructive and timely international cooperation.

Jurisdictions under increased monitoring are actively working with the FATF to address the strategic deficiencies in their regimes to counter money laundering, terrorist financing and proliferation financing. When the FATF places a jurisdiction under increased monitoring, it means the country has committed to implement an Action Plan to resolve swiftly the identified strategic deficiencies within agreed timeframes. At this Plenary, the FATF added Monaco and Venezuela to the list of jurisdictions subject to increased monitoring. 

The FATF plenary congratulated Jamaica and Türkiye for their significant progress in addressing the strategic AML/CFT deficiencies previously identified during their mutual evaluations. They have completed their Action Plans to resolve the identified strategic deficiencies within agreed timeframes and will no longer be subject to the FATF’s increased monitoring process. 

Jamaica and Türkiye will continue to work with the FATF and the relevant FATF-Style Regional Body of which it is a member to continue strengthening its AML/CFT/CPF regime. 

The FATF identifies countries or jurisdictions with serious strategic deficiencies to counter money laundering, terrorist financing, and proliferation financing. These jurisdictions are subject to a call for action to protect the international financial system. 

The FATF reiterated its concerns over the Democratic People’s Republic of Korea’s (DPRK) continued failure to address the significant deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime and the serious threats posed by the DPRK’s illicit activities related to the proliferation of weapons of mass destruction and its financing. In particular, the FATF notes that the DPRK has increased connectivity with the international financial system, which raises proliferation financing risks. Therefore, the FATF calls for greater vigilance and renewed implementation and enforcement of countermeasures against the DPRK.

The FATF discussed and adopted the joint FATF/APG/EAG mutual evaluation report of India which assessed the effectiveness of India’s measures to combat money laundering, terrorist financing and proliferation financing, and their compliance with the FATF Recommendations.

The Plenary concluded that India has reached a high level of technical compliance with the FATF requirements and its AML/CFT/CPF regime is achieving good results, including in its ML and TF risk understanding, international cooperation, access to basic and beneficial ownership information, use of financial intelligence, and depriving criminals of their assets and counter-proliferation financing measures. However, improvements are needed to strengthen the supervision and implementation of preventive measures in some of the non-financial sectors. India also needs to address delays relating to concluding ML and TF prosecutions, and to ensure that CFT measures aimed at preventing the non-profit sector from being abused for TF are implemented in line with the risk-based approach, including by conducting outreach to NPOs on their TF risks.

The FATF will publish the report after the FATF’s quality and consistency review is completed.

The Plenary also discussed and adopted the joint FATF-MENAFATF assessment of Kuwait and concluded that the country has an adequate legal and supervisory framework to address ML/TF/PF, but serious shortcomings remain in terms of delivering effective outcomes. Kuwait needs to refine its understanding of ML/TF risks, enhance TF investigations and prosecutions, and ensure that assets with links to terror or the financing of weapons of mass destruction can be legally frozen without delay. Kuwait should also focus on preventing the misuse of legal persons and on applying targeted risk-based measures to protect the non-profit sector from TF abuse.    

The FATF will publish the report after the FATF’s quality and consistency review is completed.

The suspension of the membership of the Russian Federation continues to stand. Following the statements issued since  March  2022, the FATF reiterates that all jurisdictions should be vigilant to current and emerging risks from the circumvention of measures taken against the Russian Federation in order to protect the international financial system.

The FATF completed its review of the measures its members have in place to prevent gatekeepers (accountants, lawyers, real estate agents, and trust and company service providers) from being used to facilitate money laundering and terrorist financing. When these gatekeepers are not regulated in accordance with the FATF Standards, they remain exposed to significant criminal risks and lack the measures that would allow them to see the red flags of money laundering. The FATF will publish findings of this review in July 2024.

The FATF agreed to publish the fifth annual update on progress by jurisdictions on implementing the FATF Standards on virtual assets and virtual asset service providers (VA/VASPs).

Jurisdictions, including those with materially important VASP activity, have made some progress since the last update in June 2023. In real terms, the number of jurisdictions that are compliant or largely compliant with the FATF Standards in this area has increased (33 in 2024; 25 in 2023). However, three quarters of jurisdictions (75%; 97 of 130) are only partially or not compliant with the FATF Standards in this area. This means that implementation of the FATF Standards by VASPs remains behind that for other financial sectors, leaving VAs and VASPs vulnerable to misuse.

The FATF calls on all jurisdictions to act rapidly and fully implement the FATF’s requirements on VAs and VASPs. FATF continues to monitor the situation and will continue its efforts to ensure countries have support to implement the requirements. The fifth annual update will be published in July 2024.

The FATF is in the process of revising the FATF Standards to reflect the evolution of cross-border payment systems, and changes to industry standards (in particular ISO20022). The Plenary discussed the outcomes of its extensive public consultation on draft amendments to the standards, which closed on 3 May 2024. This revision aims to help make cross-border payments faster, cheaper, more transparent and more inclusive whilst ensuring AML/CFT compliance, and ensure that the FATF Standards remain technology-neutral. The Plenary agreed that, given the complexity of the requirements and the potential impact on payment systems, further dialogue with the relevant bodies and experts in both the public and private sectors should take place before finalising the amendments.

The FATF President met with the Chairs of FSRBs at the FATF-FSRB Annual High-Level Meeting to discuss progress in the implementation of the 2022 Strategic vision for the Global Network, and to highlight the main achievements in strengthening the partnership between the FATF and FSRBs. The FATF President and FSRB Chairs agreed on three Global Network priorities for the coming year – increase FSRBs’ voice and participation in FATF work; prepare for the new Round of mutual evaluations; and strengthen AML/CFT expertise at regional level. Participants thanked the FATF President for his active engagement with and strong support to FSRBs during his Presidency and welcomed the proposed priorities of the Mexican Presidency, including strengthening cohesion in the Global Network.

The FATF President presented the latest output of the Women in FATF and the Global Network (WFGN) initiative, launched at the February 2023 Plenary. Ms Indranee Rajah, Minister in the Prime Minister’s Office and Second Minister for Finance and National Development, launched the e-book “Breaking Barriers: Inspiring the Next Generation of Women Leaders” at the sidelines of the Plenary,  the latest product of the Singapore Presidency’s Women in FATF and the Global Network (WFGN) initiative. This e-book provides insights into the determination, resilience, and expertise that women bring to the fight against financial crime, offering powerful inspiration, advice, and the power of example for aspiring women leaders. It complements the multi-cultural mentoring programme and efforts to build a stronger FATF and Global Network community for all.