Outcomes of the FATF Plenary – February 2023

The Financial Action Task Force (FATF) is a global body which sets standards and provide guidance for combating money laundering and terrorism financing. The FATF collaborates with other supervisory bodies and organisations to establish and enforce effective anti-money laundering and counter terrorism financing (AML/CTF) policies. More than 200 countries are committed to comply with the FATF 40 Recommendations.

The FATF Plenary is held three times per year and brings together representatives from the FATF member jurisdictions, as well as from observer countries and organisations.

The main role of the Plenary is to review the progress of the ongoing work of the FATF including:

• The evaluation of member countries’ compliance with the FATF recommendations

• The development of new standards

• Discussing emerging threats and trends related to money laundering, terrorism financing and proliferation of weapons of mass destruction

• Coordination of international efforts to combat these threats

• Decide the listing of countries or jurisdictions that have failed to address deficiencies in their anti-money laundering and counter terrorism financing (AML/CTF) policies

The FATF Plenary, took place on 22-24 February 2023, has resulted in several outcomes as follows.

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Part of the FATF’s role is to review a country’s compliance with AML/CTF policies. Assessments are in-depth reports created by members from other countries. Below are the highlights from the latest evaluations.

• Indonesia

The Plenary found that Indonesia has a strong legal, regulatory and institutional framework which results in robust technical compliance in several areas. Indonesia is making progress in combating terrorism financing through financial intelligence and cooperation but should target bigger money laundering schemes and improve supervision of non-financial businesses. Authorities must use effective sanctions for non-compliance for both, the financial and non-financial sector. Indonesia is working towards meeting FATF membership requirements.

• Qatar

The FATF Plenary concluded that Qatar has made significant improvement in its compliance with the FATF standards. The country has taken positive steps to develop a better understanding of ML/TF risks, has improved in confiscating criminal assets, supervising the financial and non-financial sectors and implementing targeted financial sanctions for the financing of terrorism.

Qatar must take steps to improve in the law enforcement response to ML/TF, use of financial intelligence and improve the access to beneficial ownership information by law enforcement and competent authorities. Additionally, Qatar is required to enhance the implementation of targeted financial sanctions to prevent proliferation financing.

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South Africa and Nigeria Placed Under Increased Monitoring

South Africa and Nigeria are now listed as jurisdictions subject to increased monitoring. Jurisdictions in this list are countries with strategic AML deficiencies however, they are under a plan with the FATF and committed to resolve those deficiencies as soon as possible. This list is often referred to as the “grey list”.

Morocco and Cambodia No Longer Under Increased Monitoring

Cambodia and Morocco have improved their AML/CTF regimes as required by their individual action plans. As a result, they are now removed from the list of jurisdictions subject to increased monitoring. However, it will continue to work to strength the relevant FATF-style regional body (FSRB) to improve its AML/CTF framework.

Strategic Initiative on Beneficial Ownership

The Plenary has now finalised a guidance document to assist countries to implement the requirements of the revised Recommendation 24 which requires assessing and mitigating the risks of ML/TF associated with foreign companies. The goal of the guidance is to prevent the misuse of shell companies for serving as a safe haven for illicit purposes.

Additionally, the Plenary agreed on enhancements to Recommendation 25 on beneficial ownership of legal arrangements to be in line with Recommendation 24.

Disrupting the Financial Flows from Ransomware

Criminals are exploiting the latest technologies and develop powerful tools for ransomware attacks. As a result, often criminals get away undetected with large amounts of assets, mostly crypto assets.

The FATF has conducted research on the techniques employed by ransomware attackers and their ransom payment laundering methods. An upcoming report will feature a set of risk indicators that can assist both public and private sectors in detecting suspicious activities associated with ransomware.

ML/TF in the Art and Antiquities Markets

The Art and Antiquities Market is often exploited by criminals who seek to launder the proceeds from drug trafficking, corruption and other crimes but also finance terrorism groups. Jurisdictions need to understand the risks associated with these markets. The report will include a list of risk indicators that will enable the public and private sector to identify suspicious activities related to art and antiquities.

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