Mitigating the Unintended Consequences of the FATF Standards

Unintended Consequences of the FATF Standards

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In February 2021, the Financial Action Task Force (FATF) launched a new project to study and mitigate the unintended consequences resulting from the incorrect implementation of the FATF Standards.  The project focuses on four main areas: de-risking; financial exclusion; undue targeting of NPOs; and curtailment of human rights (with a focus on due process and procedural rights). 

The first phase of this work was a stocktake, to consolidate previous analysis of these phenomena by FATF and other stakeholders, including expert bodies, in order to identify and understand to what extent, and in what manner, these unintended consequences are occurring. 

During the next phase of this project, the FATF will identify and consider potential options to mitigate these unintended consequences. The results of the first phase of this project will also inform the FATF’s work on the strategic review, which aims to make the FATF more timely, targeted and effective at holding countries to account.

At its October 2021 meeting, the Financial Action Task Force (FATF) Plenary agreed to publish a High Level Synopsis of this Stocktake . This is being published to facilitate further discussion with stakeholders during the second phase of the project. The high-level synopsis summarises a longer stocktake report, which itself brings together existing knowledge from various sources as a basis for policy decisions. As such it is focused on a small number of topics of greatest concern, and is not an exhaustive academic analysis of these phenomena. Nor does not set out a formal FATF position and conclusion on any of them.  

The FATF appreciates the significant input already received to inform this project. Contributions are welcome for the duration of the project, including on suggested mitigation options. Information may be sent to pscf@fatf-gafi.org

This is not an investigative endeavour, but an opportunity to study trends and propose solutions. Any information provided to the FATF Secretariat will be shared with the project team and the source will be identified. Depending on the volume of input, we may not be able to follow up on each suggestion for engagement, nor are we able to provide feedback about how, or if, information received is used. 

 

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