The recent plenary meeting of the Financial Action Task Force (FATF) took place on 21st- 23rd of June 2023. FATF is an intergovernmental organisation that sets global standards for combating money laundering, terrorism financing, and other financial crimes. The plenary meetings are an important part of the FATF's work, as they give member countries a chance to come together and discuss the latest developments in the fight against financial crime. As a result of the plenary, Cameroon, Croatia, and Vietnam have been added to the Grey List, whereas there have been no modifications to the Blacklist. Additional significant outcomes of the plenary are as follows.
One of the key outcomes of the plenary was the adoption of a new set of recommendations on virtual assets. Virtual assets, such as cryptocurrencies, have become an increasingly popular tool for money launderers and other criminals to move illicit funds across borders. The new recommendations aim to address this threat by setting clear standards for how virtual asset service providers (VASPs) should be regulated and supervised. Under the new guidelines, VASPs will be required to conduct customer due diligence, report suspicious transactions, and maintain records of their activities.
Luxembourg, a regional and international financial hub, demonstrated a high level of technical compliance with FATF recommendations. Their robust AML/CTF regime yielded positive results, reflecting their strong understanding of money laundering and terrorism financing risks. The country has strong domestic cooperation, financial intelligence utilisation, access to beneficial ownership information, and collaboration with international partners.
To further enhance their efforts, areas for improvement include detecting and investigating complex money laundering cases, implementing risk-based supervision in the non-financial sector, improving knowledge of terrorism financing, and enforcing appropriate sanctions for non-compliance within financial and non-financial sectors.
• The implementation of FATF's mutual evaluation process, which assesses how well member countries are implementing the organisation's standards, and the ongoing efforts to combat ML/TF.
• The Plenary adopted an internal tool to tackle corruption and engaged in discussions on progress made in addressing the misuse of citizenship and residency programs associated with investment schemes. The FATF remains committed to combating corruption-related challenges.
• The FATF is actively exploring potential revisions to Recommendation 8, which aims to safeguard NPOs from terrorism financing abuse while creating an environment that will enable legitimate NPO activities. For transparency purposes, the FATF plans to release a document for public consultation, seeking valuable input from stakeholders.
The FATF welcomed Canadian Jeremy Weil, who will take charge as president on 1st of July 2023.
Overall, the June 2023 FATF plenary was an important event for the global fight against financial crime. The new recommendations on virtual assets are a major step forward in addressing the growing threat posed by these technologies. As new threats emerge and criminal tactics evolve, it is essential that the FATF and its members continue to work together to stay ahead of the curve and ensure the integrity of the global financial system.