Speech by Dr. Marcus Pleyer
It’s great to see the Italian G20 presidency working so hard to ensure economic recovery. Illicit financial flows, however, undermine our endeavours for strong, sustainable and inclusive growth. They create an uneven playing field where criminals gain while legitimate business suffers.
Today we keep hearing about criminals exploiting the COVID-19 pandemic. Fraudsters scamming government response programmes. Fake medical equipment and vaccines. Billions of dollars wasted due to poor due diligence.
This is happening partly due to a widespread failure in effective supervision and compliance of anti-money laundering measures. That’s why the FATF wants governments to re-think their regulatory culture in this area.
Supervisors and compliance officers in banks and companies are meant to understand and mitigate the financial crime risks they face. But at the moment, most take a basic tick-box approach: they make sure forms are filled in correctly but don’t focus on the real risks. As a result, fraudsters, scammers and criminals often get away with their crimes.
Focusing on the real money laundering or terrorist financing risks will make a big difference. High-risk transactions should face tough checks to make sure money reaches the legitimate recipient; lower risk businesses should have fewer hurdles to jump over. At a time when the capacities of many supervisors, banks and companies are stretched, focusing resources where they are needed most is just plain common sense.
By focusing on the real financial crime risks, you can help detect criminal activity, stop legitimate business from facing unfair competition, and foster confidence in financial markets – all vital to the global economic recovery. And by focusing on the real risks, financial transactions and remittances in certain regions will no longer be indiscriminately excluded and pushed underground. This is key to financial inclusion – another G20 goal.
The FATF just agreed Risk-based Supervision Guidance for the Financial Sector as a major reference point for decision makers in this area. If the G20 promote this change of culture, it will have a real world impact on our joint efforts to ensure economic recovery.
Let me close by welcoming the clear recognition in the communiqué of the devastating impact of environmental crime on climate and bio-diversity. The FATF is working to help national authorities trace the illicit funds that fuel environmental crime – worth up to 260 billion dollars a year. Protecting the planet is our common mission. Thank you.