The 2022 Financial Action Task Force (FATF) Plenary Meeting took place in Paris between the 2nd– 4th of March. Representatives of the 206 members of FATF were present at the meeting, in which they addressed four key themes: monitoring international compliance; the completion of the FATF’s Strategic Review; tougher money laundering rules; and risks arising from the real estate sector.
Monitoring Compliance
Although France has an advanced and robust Anti-Money Laundering (AML) and Counter Terrorist Financing (CTF) framework, the FATF have identified further work required in certain areas particularly with respect to legal persons and the real estate sector. A report on these findings will be published in May 2022.
Following improvements and progress in their previously identified AML/CFT deficiencies, Zimbabwe are no longer under increased monitoring by the FATF. However, it will still continue to work with FATF’s regional partner, the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) to continue strengthening its AML/CTF programme.
The United Arab Emirates is the latest jurisdiction to be added to the list of countries under increased monitoring and review.
Countries should use this reshuffle as a reminder to continue to review and, where necessary, strengthen their AML and CTF regimes to swiftly resolve any identified deficiencies in their frameworks.
Strategic Review
The Strategic Review, a work in progress since 2019, has now officially been completed. The aim of the review is to improve the efficiency of the FATF’s framework to make the next cycle of mutual evaluations more suitable, effective, and structured. There will be a few changes to the FATF’s processes, including a greater focus on risk in the fifth round of mutual evaluations. Member countries are therefore encouraged to prepare and prioritise their efforts in areas where risks are highest in their respective countries as they will be under close scrutiny.
Money Laundering
The FATF have agreed on a new set of tougher beneficial ownership rules in a bid to tackle money laundering. Countries are now required to ensure firms’ beneficial ownership data is held by a competent authority which can be easily accessed by them. The full Public Statement can be accessed here.
Furthermore, the FATF has also agreed to revise Recommendation 24 and its Interpretative Note so that competent authorities in all countries have adequate and current data on the natural owners of companies. There will be a course of public consultations to follow.
The FATF concluded research on the money laundering and terrorist financing risks associated with migrant smuggling. The report highlights that multiple countries do not consider this a high-risk crime for money laundering despite the recent expansion of the criminal business. The FATF aims to publish the report on the findings on the 22nd of March 2022. This will further spotlight the need for countries to recognise the associated money laundering and terrorist financing risks they become exposed to from migrant smuggling and the need to monitor the money linked to this criminal activity.
Real Estate
The FATF have identified the real estate sector as a popular investment choice for criminals. This is due to the ease of exploitation stemming from a general poor understanding of risks pertaining to the sector. As such, the FATF has developed risk-based implementation draft guidance on AML and CTF measures targeted towards the real estate sector. The FATF have published a report which can be accessed here and are welcoming further comments and input from fellow real estate industry participants.
The full list of outcomes from the 2022 Plenary Meeting is accessible here.
Anti-Financial Crime Support – How can Complyport Help?
Our experienced Financial Crime and Forensics team led by Martin Schofield—one of the world’s leading specialists in the field—brings a wealth of experience to every project we are engaged in. Our highly experienced financial crime professionals and forensic experts, in subjects such as anti-money laundering, counter terrorist financing, anti-bribery and corruption and fraud and regularly help our clients navigate the complexities of the financial crime and money laundering environment. Services offered by Complyport include:
- Financial crime health checks and audits,
- Implementation of financial crime, AML, CTF, ABC, Fraud and market abuse controls and frameworks,
- Ongoing advice on financial crime, AML, CTF, market abuse and fraud prevention,
- Authoring/reviewing financial crime policies,
- Outsourced MLRO support
- Outsourced KYC and CDD support,
- Assistance in identifying Politically Exposed Persons (PEPs),
- Assistance in navigating international sanctions,
- Support with preventing market abuse and insider dealing,
- Expert Witness in Financial Crime cases
- Forensics and Investigations
- Design and/or delivery of online or face to face financial crime training
If this article has raised any questions, or you think your firm may require assistance, please contact either Martin Schofield via martin.schofield@complyport.co.uk or Jan Hagen via jan.hagen@complyport.co.uk to book in a free consultation.
About Complyport
Complyport is the City’s market leading consulting firm supporting the UK financial services industry for over 20 years. We specialise in providing Governance, Risk and Compliance services to support the regulated financial services industry to raise standards and thrive.
Complyport advises and assists firms to become authorised and to comply with the rules and requirements of regulators on an ongoing basis. Our vision is to be there for our clients every step of the way, helping them change, grow, and excel through expertise, insight, and innovation, and in so doing to become our clients’ most valued supplier and trusted advisor.
We have successfully assisted over 1000 firms to become authorised with the FCA and EU and are providing regulatory support to over 600 regulated firms on an ongoing basis globally. With presence in the UK and EU, as well as via our Associates Network, Complyport can assist firms across multiple jurisdictions.
Complyport’s multidisciplinary consultants possess deep expertise in their field, having acted in FCA skilled person reviews, as expert witnesses in legal cases and as expert investigators for firms or their legal advisers.
Day to day, we conduct audits and reviews of a firm’s products, processes, policies, and procedures to identify scope for business, to determine the impact of regulatory developments and to verify compliance with local regulations. Our clients tell us we live our values; we are driven, agile and collaborative.
