Unintended Consequences of the FATF Standards
In February 2021, the Financial Action Task Force (FATF) launched a project to study and mitigate the unintended consequences resulting from the incorrect implementation of the FATF Standards, including de-risking, financial exclusion and undue targeting of NPOs.
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. The results of this work are captured in a High-Level Synopsis of this Stocktake . 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 it set out a formal FATF position and conclusion on any of them.
The stocktake supported further consideration of policy options for the FATF. In March 2022, the FATF Plenary announced that had completed its work to identify and analyse unintended consequences of the FATF Recommendations. It agreed to refer the substantive work to the relevant FATF Working Groups, which will scope out and refine how FATF can mitigate the unintended consequences of FATF’s Standards.
The FATF will continue to engage with external stakeholders as this work develops and appreciates the significant input already received to inform this project. For further information about FATF’s existing information on financial inclusion and NPOs – follow this link.