Procedures for the 5th Round Mutual Evaluations, Follow-up and ICRG

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19 April 2022 - The FATF took stock of the results in the 4th round of mutual evaluation to adjust its methodology for the assesment in the 5th round of mutual evaluations. It looked at what was going well, and the areas where countries needed to improve their performance.

Using this information, the FATF made a number of changes to the Methodology and Procedures that will apply to the next round of mutual evaluation, which will start when all members have been assessed against the current Methodology, as adopted in 2013. The revised 5th Round Procedures are published for information only, this document is not yet in effect.

5th Round Revised Procedures - not yet in effect

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  • The next round of mutual evaluations will be a six-year cycle, significantly shorter than earlier rounds, which lasted 10 years on average.
  • The assessment sequence will be based on three factors – the time since a country’s last assessment, its level of ML/TF risks and the relative size of its economy and financial sector – so that the FATF assesses in priority the countries whose assessments are most outdated, that face higher risks and have important financial sectors.
  • After their mutual evaluation, countries will have three years to take action and address the deficiencies. If they fail to do so, they will automatically face a range of measures, including the possibility of the FATF publicly raising concerns about outstanding deficiencies. 
  • The follow-up assessment process will be more results-oriented, focusing on specific actions to tackle money laundering, terrorist financing and the financing of weapons of mass destruction.
  • The shorter cycle, greater scrutiny and strong follow-up mechanisms will ensure that governments stay focused on taking effective action to detect, prevent and punish money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction.

In brief

See also

Mutual Evaluations

The FATF conducts peer reviews of each member on an ongoing basis to assess levels of implementation of the FATF Recommendations, providing an in-depth description and analysis of each country’s system for preventing criminal abuse of the financial system
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Methodology for the 5th Round of Mutual Evaluations

The 5th round of mutual evaluations will be shorter, and with an even greater focus on effectiveness, and risks and context. 

The revised 5th Round Methodology is published for information only, it is not yet in effect. 

FATF Recommendations

The FATF Recommendations are the internationally endorsed global standards against money laundering and terrorist financing: they increase transparency and enable countries to successfully take action against illicit use of their financial system.
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