Speech by Spanish Minister of Economy, Industry and Competitiveness

FATF Heads of Delegation Dinner
Valencia, 21 June 2017

Mr Luis de Guindos, Spanish Minister of Economy, Industry and Competitiveness

Good evening ladies and gentlemen. First of all I would like to welcome all of you to Valencia. And I want to thank Christine Lagarde, Managing Director of the IMF, for her attendance.

It is an honour for us to host in our country this Plenary meeting of the Financial Action Task Force, an institution for which I have great respect and admiration.

Since its creation in 1990, the FATF has managed to tackle financial crime by bringing together technical and operational expertise.

As a result, the Task Force has put in place a global framework of standards to fight money laundering and terrorism financing.

I would like to highlight the relevance of the new system for assessing the compliance of national regulation with these standards. A system based not only on the evaluation of legal compliance but also on the effectiveness of the implemented mechanisms.

A lot has been achieved so far, but more needs to be done:

1.  Although the Financial Action Task Force has adopted standards for transparency and the identification of ultimate beneficial owners, its practical implementation remains challenging in many countries.

Attaining a high level of transparency is a goal not only for the Financial Action Task Force but also for other bodies like the G20 or the European Union. 

At the European level, we have taken the important decision of requiring all Member States to create interconnected registries containing information on beneficial owners.

2.  In addition, we have closely followed the so-called de-risking. This phenomenon appears when financial institutions restrict business with countries or customers in order to avoid risks, rather than manage them. 

This is a serious problem that has the potential to hinder competition, create financial exclusion and reduce transparency, thereby increasing money laundering and terrorism financing risks.

I’m aware that the FATF has been working hard to understand the nature of de-risking and to find suitable solutions.

3. Another challenge is to get a proper understanding of the risks and vulnerabilities related to technological innovation. The financial services industry has been subject to drastic technology-led changes that may have a disruptive impact.

Regulators are addressing this phenomenon but need an input to regulate the new activities. FATF, as a global organization, is best positioned to show the way.

4. Moreover, the fight against terrorism financing and money laundering should be seen as a common goal for the industry and the regulators. Cooperation between them is critical.

In this respect, a key priority of the Spanish Presidency has been to develop a partnership with the FinTech and RegTech communities.

I would like to congratulate Juan Manuel Vega for this initiative. Such partnership will help both parties: 

• • It will help FATF to become more proactive in developing standards, guidance and best practice, as well as in anticipating new developments.
  • And it will also help the FinTech and Regtech industry by getting them to identify the risks in their business models and to manage them. 

I am glad to hear that recent meetings on this topic have been very productive and have resulted in the establishment of high-level principles.

5. Last but not least, the FATF is in the process of reviewing its governance and mandate, including a reflection on its future legal status. Let me reiterate our full support for the changes that may increase the effectiveness of the organisation. I am sure that the FATF will reach the best decisions on how to achieve this goal.

Let me conclude by wishing you all the best success in the compliance of your task, which is of fundamental importance for our economy and our society.

FATF Plenary week from 18-23 June 2017