Public Consultation on AML/CFT and Financial Inclusion – proposed changes to FATF Standards

Paris, 28 October 2024 - 

The Financial Action Task Force (FATF) is considering revisions to the FATF Recommendations in order to better align them with measures to promote financial inclusion. This is part of FATF’s programme of work to address the unintended consequences of AML/CFT measures. FATF is inviting views and comments on the proposed changes from interested stakeholders.

The revisions focus on Recommendation 1 and its Interpretive Note, with corresponding changes to Recommendations 10 and 15 and related Glossary definitions. These proposed revisions aim to better promote financial inclusion through increased focus on proportionality and simplified measures in the risk-based approach, and to give countries, supervisors, and financial institutions greater confidence and assurance when implementing of simplified measures.

The FATF would particularly welcome views on the following issues:

• FATF is considering the replacement of the term “commensurate” with “proportionate” in Recommendation 1, in order to clarify how these concepts should be applied in the context of a risk-based approach; to set clearer expectations with regard to simplified measures; and to align the FATF’s language more closely with that of financial inclusion stakeholders and frameworks. For these purposes, the term “proportionate” is defined as follows: “In the context of the risk-based approach adopted by the FATF Recommendations, a proportionate or commensurate measure or action is one that appropriately corresponds to the level of identified risk and effectively mitigates the risks”.  FATF would welcome views on whether to proceed with this change and on the proposed definition. 

• FATF is considering amendments to require supervisors to “review and take into account the risk mitigation measures undertaken by financial institutions/DNFBPs”, to avoid overcompliance resulting from an only partial understanding of the risks, and also to consider proportionality in the engagements with them. FATF would welcome views on the potential impact of this change.

• On adoption of simplified measures in lower risk situations, FATF proposes to replace “countries may decide to allow simplified measures” with “countries should allow and encourage simplified measures”. This would place an explicit requirement on countries to be more active in creating an enabling environment for implementation of simplified measures.

• On “non-face-to-face customer-identification and transactions” as an example of potentially higher-risk situations, addition of qualification (“unless appropriate risk mitigation measures have been implemented”) to reflect technological advancements in digital identity systems that may reduce the risks associated with non-face-to-face interactions, and recognise that in many countries this has become the normal mode of interaction with financial institutions.

Please provide your response, including any drafting proposals to FATF.Publicconsultation@fatf-gafi.org with the subject-line “Comments of [author] on the proposed revisions to R.1/INR.1/INR.10/INR.15”, by 6 December 2024 (18h00 CET).

This consultation is now closed.

While submitting your response, please indicate the name of your organisation, the nature of your activity, and your contact details. Please note that all submissions received during public consultation will be shared with FATF delegations. At this stage, the FATF has not approved the draft revisions to R.1/INR.1/INR.10/INR.15 and will consider the feedback received in public consultation for finalising the revisions. 

You may insert any specific drafting proposals directly in this draft text in tracked changes.

We will use your contact information only for the purpose of this public consultation and for further engagement with you on this issue.

Thank you for your input in advance.