FATF Plenary 22 to 25 February 2021

The Financial Action Task Force (“FATF”) held a Plenary meeting between 22 and 25 February 2021.  Delegates representing the 205 members of the Global Network and observer organisations, such as the IMF, the United Nations and the World Bank, worked through a full agenda to strengthen global safeguards to detect, prevent and disrupt the financial flows that fuel crime and terrorism.  Due to the ongoing COVID-19 pandemic, the Plenary met virtually for the third time. As the pandemic continues to impact families, healthcare services, communities and economies worldwide, criminals continue to exploit the crisis for financial gain. Delegates continue to work to stamp out the laundering of proceeds of crimes including those linked to the COVID-19 pandemic. As countries focus on recovering from this crisis, it is more important than ever to fully and effectively implement the FATF Standards, and take a risk-based approach to mitigating money laundering and terrorist financing risks.

During their discussions, delegates finalised work in a number of important areas. These included guidance to help countries take an effective, risk-based approach to supervision, guidance on investigating and prosecuting terrorist financing and work on illicit arms trafficking and terrorist financing, the latter two available to competent authorities. Delegates also agreed to release for public consultation a draft guidance to assist countries, financial institutions and DNFBPs in identifying, assessing and mitigating the risks of the financing of the proliferation of weapons of mass destruction, and updated guidance on virtual assets and virtual asset service providers.

The FATF also advanced its work on ongoing key issues.

  • These include digitalisation, which has the potential to make anti-money laundering and counter-terrorist financing (AML/CFT) action more effective and efficient. In particular, the FATF agreed to start new work on digital transformation of AML/CFT for operational agencies. The FATF also continued discussions on the strategic review, which will shape the next round of mutual evaluations and make them more timely and risk-based.
  • Delegates explored potential amendments to further strengthen the FATF requirements on beneficial ownership. The FATF’s mutual evaluations, as well as high-profile examples of abuse, demonstrate that criminals are still able to hide their illicit assets behind anonymous or complex legal structures.  Delegates discussed how to improve transparency and ensure that up-to-date beneficial ownership information is available to authorities.
  • The FATF also discussed the preliminary findings in its ongoing work to overcoming the challenges linked to the effective recovery of criminals’ assets, tackle money laundering from environmental crimes and the financing of ethnically and racially motivated terrorism.

The Plenary meeting considered the following:

  1. Strategic Initiatives
  • Improving risk-based supervision
  • Mitigating the money laundering and terrorist financing risks of virtual assets
  • Strengthening measures to prevent the financing of proliferation of weapons of mass destruction
  • Improving terrorist financing investigations and prosecutions
  • Tackling illicit arms trafficking and terrorist financing

2. Country-specific processes

  • Mutual Evaluation of New Zealand
  • Impact of COVID-19 on Mutual Evaluation processes
  • Jurisdictions under Increased Monitoring
  • Strengthening the Global Network