This Week in AML

Latest FATF Plenary; October 2021

The Financial Action Task Force held its most recent Plenary last week. The delegates completed work on a number key initiatives – updated guidance for a risk-based approach to virtual assets and virtual assets service providers, and a final report on a survey on implementation of standards on cross-border payments. John and Elliot discuss the outcomes of the Plenary and what it means for the financial crime compliance community.                  




Interpol Looks At Cultural Property Crime TRANSCRIPT


John Byrne: Hi, Elliot doing fine. Thanks.


Elliot Berman: So, late last, mid-last week, FATF, the Financial Action Taskforce, held its most recent plenary. Those are three-day sessions. I think this one; they actually did hybrid. They'd done the prior four, all remote. And they came out with some high-level strategic initiatives that they worked on and announced. I'm assuming you saw that announcement?


John Byrne: Right. So they always have an October plenary. So we're always looking to see what the outputs are. And obviously, the age-old challenge we have for our communities to make sure they recognize the importance of FATF and what they do, I think most do understand that.


But I think they clearly do have, impact on what happens in different jurisdictions. Obviously, that's important, but the series of initiatives, as with everything else in AML, is pretty broad-based, right. They looked at revising the guidance on virtual assets. They looked at issues related to Afghanistan, which is obviously not just in the news, but important.


Things that we've covered before the progress on dealing with environmental crimes. We did a webinar on wildlife trafficking, so it's something that's important to us. And then the one area that I thought was also interesting because we're grappling with or waiting more appropriately for FinCEN to produce the registry on beneficial ownership is FATF is trying to update the standards. They're calling it strengthening the standards on beneficial ownership, and they have what they're calling a public consultation. So that's out there. And they're asking obviously for comments on that, [and] it's such an important topic. It's such an important global topic. So that's another thing.


So other things happened as well, but I thought those several items that I mentioned were pretty important.


Elliot Berman: Agreed. So in that one, on beneficial owner. They actually, in the summary, referenced the Pandora Papers as, you know, additional global context. I guess the other one that you didn't mention that I thought was interesting is they issued a final report on working on standards for cross-border payments, which is a big thing.


Actually, the initiatives have a bunch of components, and FATF took on what I think is one of the tougher ones. And that is, how analyzing and then ultimately proposing some solutions on how the regulations of AML and CFT around the globe are different and how those rules create friction in effective systems for cross-border trading.


So, you know, some of the other building blocks of that initiative are much more technical on the payment side, but this is more about how the various regulatory regimes, when they're not synchronized, actually make cross-border payments a challenge. And clearly, everybody's looking for smoothing out the cross-border payment processes.


John Byrne: Right. Yeah, that is an important element as well. And then, going back to your reference about beneficial ownership, they have a specific statement on Pandora Papers. Cause obviously, they recognize that the press and the focus on the hiding of assets continues to be a challenge, and FATF, to their credit, have been pretty vocal, and they've worked a lot on that topic for a number of years.


Elliot Berman: Indeed. So a few of these things that came out of this plenary are things they view for the particular initiative; they're now complete. But many of them are progress reports or, you know, interim reports, things like that. So I know we've done this in the past when we've talked about FATF, and we've done some webinars on FATF activity, too.


It's really important if you're involved in the financial crime compliance community. At this point, with transactions being global and money laundering being global, and certainly terrorist financing being global, it's really important to be paying attention to what FATF is doing.


So if you're not already receiving, you know, their subscriptions, you should. We'd recommend that you sign up for them or at least visit the FATF website on some kind of regular basis to see what's going on. Cause there's always something. And, they do a lot of deep dives into tough topics.


John Byrne: Yeah. The last thing that I'll mention is given what's happening in Afghanistan, FATF issued a public statement. One of the parts of that statement I wanted to highlight besides the obvious [is] that you want to make sure that there's not going to be an increase in terrorist activity, which, unfortunately, a lot of experts think will happen. But they reiterate that the most important aspect of ensuring that NPOs and other humanitarian actors can still provide humanitarian assistance in the region without a slight delay or disruption.


So they call on all jurisdictions to protect those NPOs from being misused for terrorist financing. So again, an issue we've covered time and time again. Unfortunately, [it] is something that could be a by-product of what's happened in Afghanistan, but FATF calls it out to make sure that jurisdictions are working carefully so that there's still access, there's still inclusion, and NPOs can be free to help with medical supplies, electricity funding, all the things that are so important for assistance in conflict zones.


Elliot Berman: Correct. Okay, so I guess it's my turn to do shameless plug again. So we hope you enjoyed this edition of This Week in AML. We do this every week with a couple of holiday breaks.


You can find this and all of our podcasts on Spotify and Apple Podcasts or wherever you get your podcast and additional high-quality content you can find on our website, amlrightsource.com.


John Byrne: I'll just add one more quick thing if I can. And that is that several of us have been involved with the antiquities coalition in a financial crime task force, and we just filed a comment letter to FinCen's ANPRM on placing antiquities under the bank secrecy act.

You'll find that on the antiquities coalition website, and it'll be on our website as well. Obviously, we're awaiting final reg (regulation) proposals, which we will also comment on, but I just wanted to highlight that because it's an area that you and I have talked about it. We've also done programming about it.


Elliot Berman: Correct, and another area of international concern, because so much of that activity crosses borders around the world. Alright, John, you have a good weekend, and we will talk again next week.


John Byrne: Take care. Elliot, stay safe.


Elliot Berman: You too. Bye-bye.