Special Edition: FATF 2025 Plenary Highlights & Strategic Shifts

In this special Thanksgiving edition of This Week in AML, Elliot Berman and John Byrne break from tradition to spotlight the Financial Action Task Force (FATF) and its three 2025 plenaries. They explore key developments, including updates to FATF standards, mutual evaluations, financial inclusion initiatives, and the evolving global stance on virtual assets. The episode also covers jurisdictional changes in monitoring status, new guidance on asset recovery, and FATF’s forward-looking Horizon Scan addressing emerging tech threats like generative AI and deepfakes. Tune in for a comprehensive overview of FATF’s strategic direction and its impact on the global AML landscape.

Special Edition: FATF 2025 Plenary Highlights & Strategic Shifts - Transcript

Elliot Berman: Hi John. How are you today?

John Byrne: I am good, Elliot, this is a special edition of This Week in AML and as we mentioned in the past we've run legacy programming during the holidays. But this time we thought we would do something a little bit different. And this one we're gonna focus on the Financial Action Task Force FATF and their three plenaries that are concluded in 2025. And give you some some of the highlights about those and as always, for more information, go to the FATF website.

They have a lot of great reports. The outcomes of the plenaries that we're gonna be referring to, as well as all the recommendations that are relevant to all the jurisdictions that are part of FATF. Especially as we've talked about before those that are in the middle of mutual evaluations, which they'll be tested to see how they respond to the various recommendations. So how do you wanna start here?

Elliot Berman: First let's just set the stage. FATF has three meetings a year referred to as plenaries. Generally over the last number of years they've been in late February, late June and late October. And at those plenaries, they do a variety of things. They review changes to recommendations or totally new recommendations. They review the country level reviews that have been completed. They take a look at the countries who have action plans and get recommendations from the committees related to those action plans about what the status of those countries should be, whether they have completed their action plans, they're in good progress, they're falling behind, and things like that.

So when when you and I spend the rest of our time talking about the plenaries. That's the context for those of our listeners who aren't as plugged into FATF as we are. The other thing, and we'll talk about that related to the June plenary, is there are a number of regional organizations that roll into FATF. And at times, including the June plenary this year the plenary will be a joint meeting with one of those regionals, and we'll talk about that a little more when we get to June. What are your big takeaways from February?

John Byrne: A reminder that during the two year period now, used to be one but two year period of the FATF president, so there's rotating presidencies. This one is the President Madrazo of Mexico. She has the priorities that she brings to the FATF for the two year period. And one of her priorities is something we talk about constantly, and that's financial inclusion. So the February plenary, from the outcomes listed on the website, they talk a bit about changes to the standards to better support financial inclusion and a risk-based approach, which is another item that FATF in general has talked a lot about. So that's one of the things there.

I would mention too, that throughout 2025, and it certainly was referenced back in February, that the suspension of the Russian Federation based on their attacks war declared against Ukraine continues to stand, and that started back in February of 2024. And all throughout the plenaries in 2025 FATF reminds everybody that the Russian Federation is still suspended, but those are risk-based approach and financial inclusion are two of the things that I took.

And obviously there was some other items from the, from that February plenary as well.

Elliot Berman: Yes there was substantial activity regarding detecting and disrupting online child sexual exploitation. That's a topic that you and I have talked about in the broader context of human trafficking on a number of occasions. And a lot of that activity crosses national and international borders pretty seamlessly. It's something that FATF has looked at seriously. And in particular in February, they were focusing on sextortion of children. And you and I have talked about that as well.

And then the last thing they do talk about is public consultations. And for those of you who listen in the US that would be what we consider a public comment period. They talk at every plenary about what, which public consultations on either new recommendations, modifications, or recommendations are going on. So that as you get used to looking at FATF of outcomes, it's important to see what's in flight.

John Byrne: The last thing I saw that the FATF removed the Philippines from its increased monitoring what they say following a successful onsite visit. And obviously part of the FATF plenaries are always about the different jurisdictions and where they where they sit.

And then moving on to June, as you mentioned. This was a joint FATF of meeting. This was with MONEYVAL and there was over 200 jurisdictions and observers in what they're calling two days of conversation and technical discussion.

Some the outcomes that they published are they approved changes to the FATF standards regarding cross-border payments. They say that's in line with the G 20 initiatives to make payments faster. And then they also said that the meeting marked what they call a significant milestone by approving rounds of mutual evaluation, which now gonna focus on how effectively countries are combating money laundering, terrorist financing, and proliferation finance. So there is a new standard now, which the US will be under as well as we know. 'cause their mutual evaluation, which is ongoing, will be completed in 2026.

Elliot Berman: Yes. And Canada is I think their mutual evaluation under the new standards is starting now. So a lot of big players now coming, under the new standards with that effectiveness component.

John Byrne: The other thing to mention because we've talked about it quite a bit in other contexts, is during the outcomes of this plenary, new FATF procedures, were agreed to deal with what they're calling, stopping the misapplication of measures to protect NPOs from abuse. So remember, the unintended effects on charities, humanitarian groups when jurisdictions put laws in place, or enforce those laws regarding terrorist financing and related crimes.

Elliot Berman: And in June the plenary removed Croatia, Mali, and the United Republic of Tanzania from the list of jurisdictions under increased monitoring after successful onsite visits . Again, that's the on and off the the various lists. There was also activity related to strengthening payment transparency, which is part of Recommendation 16 in the FATF of standards.

And some additional work on financial inclusion, as you mentioned that being a one of the key strategic initiatives of the current president where there was strengthening to Recommendation 1 on a risk based approach. Earlier, they endorsed updated guidance that empowers financial institutions and other providers to boost financial inclusion.

John Byrne: They also said that what they're calling their sixth targeted update was approved for publication, which came after the plenary. And that's gonna assess jurisdiction's implementation, the FATF of standards in relation to virtual assets and virtual asset service providers.

Elliot Berman: Yes, and that's been an ongoing theme. I would say that FATF is leading the world in terms of the virtual asset and virtual asset provider issues. You and I have talked about the fact that the UK and the EU are certainly fast followers, and we're seeing, at least at the moment, that the US is taking a different approach in terms of how they view the risks.

We'll see how that all balances out over time, and it'll be interesting to see if it shows up in the mutual evaluation of the US when it comes out next year.

John Byrne: Then we moved on to October. We've mentioned some of this in our weekly conversations, but some of the jurisdictions that are no longer under increased monitoring, according to the outcomes in October, they congratulated Burkina Faso. I must admit, I have no idea where that is. Mozambique, Nigeria and South Africa for positive progress In addressing strategic A ML and CFT deficiencies that were identified during their mutual evaluations.

They say that those jurisdictions have completed their action plans with specified and agreed timeframes and will no longer be subject to increased monitoring. So they further say that to sustain that improvements in those systems at least two of the countries Burkina Faso and Nigeria will continue working with their regional bodies. And Mozambique will continue working with theirs.

And South Africa, who is already a FATF member, will continue working with the FATF in coordination with theirs as well. So just more specificity regarding their no longer under increased monitoring, but promises to work in the action plans. And then obviously with the FATF of style regional bodies.

Elliot Berman: Burkino Faso is in West Africa.

John Byrne: There you go.

Elliot Berman: Yeah. They also talked about mutual evaluations and they adopted the reports from Belgium and Malaysia. And these were done also under the new approach. So there was an assessment of the effectiveness of their measures. And that those reports will be published later this year.

And the strategic initiatives, they talked about strengthening asset recovery. When there's , a loss of assets how do the people who have been wronged get the assets back? And so the plenary adopted new guidance, which you can find at the website. And as we talked about recently after the plenary, they also adopted a new function called Horizon Scan that warns of how criminals can exploit generative AI agents, and other new technologies to facilitate illicit activities, particularly in the space related to deep fakes. What else did you see there?

John Byrne: Yeah, I think that was generally it. There's been some, since the plenary there'll be some additional reports published before the end of the year. There are always they, what they call a call for action, so dealing with issues relating to high risk jurisdictions. I would point people to a number of the reports done throughout the year. They created this year a money laundering national risk assessment toolkit that came out in August.

We mentioned the virtual assets and virtual asset service providers report. That was also midyear and then I would point people to a speech made by President Madrazo to the UN Security Council in August which talks about the various threats to international peace, but also mentions the importance of financial inclusion.

So she has definitely made her case in other fora besides at FATF. But again pay attention to those countries that are under increased monitoring and those that have been delisted from that, if you will. And just in general, take a look at the calendar for FATF activities throughout the year.

It's not simply the plenaries., For example, as we're recording this, they just issued detailed guidance on recovering of criminal assets. They've done webinars, in October on financial inclusion through the risk-based approach.

And I'm sure you can watch those after they've been posted. So again, number of excellent recommendations, reports, outcomes all throughout the year that as we are all part of this global AML world becomes real important to pay attention to.

Elliot Berman: So John, you have hopefully great holidays. Thanksgiving in particular, and enjoy time with family. And you and I will be back doing regular weekly This Week in A ML immediately after the holiday.

John Byrne: Sounds good. Take care. Stay safe.

Elliot Berman: You too. Bye-bye.