Beginning on October 21, 2020, the Financial Action Task Force ("FATF") held its three-day Plenary meeting virtually. It was the first Plenary of Germany's two-year Presidency. As part of the Plenary outcomes, the FATF discussed illicit finance risks associated with the COVID-19 pandemic and the progress of specific jurisdictions subject to increased monitoring. The FATF also presented on strategic initiatives, particularly amendments to the FATF Recommendations that strengthen measures to counter risks related to proliferation finance. The Plenary outcomes include:
- Strengthened Efforts Focusing on Countering the Financing of Proliferation: Following a public consultation period, the FATF Plenary approved revisions to Recommendation 1 and its Interpretive Note that require countries and the private sector to "identify, assess, manage and mitigate the risks of potential breaches, non-implementation, or evasion of the targeted financial sanctions related to proliferation financing."1 The FATF also adopted amendments to Recommendation 2 and its Interpretive Note to enhance national cooperation, coordination, and information exchange.2
- Ongoing Strategic Initiatives to Counter the Financing of Proliferation: By issuing updated recommendations, the FATF has strengthened its standards and prioritized actions to counter Weapons of Mass Destruction ("WMD") proliferation financing. To that end, the FATF plans to modify its Methodology and develop Guidance to clarify how countries and the private sector should identify and mitigate proliferation financing risk.3 The FATF will begin to assess jurisdictions for implementation of these revised requirements at the start of the next round of mutual evaluations.4
- FATF Policy Responses to the COVID-19 Pandemic: The FATF issued a public statement urging jurisdictions to remain vigilant in detecting illicit finance schemes associated with the COVID-19 pandemic. A survey conducted across the FATF Global Network indicates that the pandemic has reduced some authorities' capacity to effectively combat money laundering and terrorist financing in the face of a rising number of cases related to counterfeit medical goods, investment fraud, and cyber-crime schemes.5 As a result, the FATF stressed that countries must continue to implement the FATF Recommendations, applying a risk-based approach and ensuring that mitigation measures are commensurate with money laundering and terrorist financing risks.6 Jurisdictions, likewise, should provide authorities with sufficient resources to respond to COVID-19 in light of evolving threats posed by criminals.7
- Jurisdictions No Longer Subject to Increased Monitoring
– Iceland and Mongolia: The FATF announced
that Iceland and Mongolia have made "significant
progress" to remediate their strategic AML/CFT deficiencies
and will no longer be subject to the FATF's increased
monitoring process.8 Iceland will continue
to work with FATF and Mongolia will continue to work with the
Asia/Pacific Group on Money Laundering ("APG"), the
FATF-style regional body of which Mongolia is a
member.9
Footnotes
1 Financial Action Task Force, "Outcomes FATF Plenary, 21-23 October 2020," (23 October 2020), available at http://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-fatf-plenary-october-2020.html?src=ilaw.
2 Financial Action Task Force, "The FATF Recommendations," (October 2020), available at https://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF%20Recommendations%202012.pdf.
3 Financial Action Task Force, "FATF Public Statement on Counter Proliferation Financing," (23 October 2020), available at http://www.fatf-gafi.org/publications/financingofproliferation/documents/statement-proliferation-financing-2020.html.
4 Financial Action Task Force, "FATF Public Statement on Counter Proliferation Financing," (23 October 2020), available at http://www.fatf-gafi.org/publications/financingofproliferation/documents/statement-proliferation-financing-2020.html.
5 Financial Action Task Force, "The importance of allocating sufficient resources to AML/CFT regimes during the COVID-19 pandemic," (23 October 2020), available at http://www.fatf-gafi.org/publications/fatfgeneral/documents/covid-19-impact-oct-2020.html.
6 Financial Action Task Force, "The importance of allocating sufficient resources to AML/CFT regimes during the COVID-19 pandemic," (23 October 2020), available at http://www.fatf-gafi.org/publications/fatfgeneral/documents/covid-19-impact-oct-2020.html.
7 Financial Action Task Force, "The importance of allocating sufficient resources to AML/CFT regimes during the COVID-19 pandemic," (23 October 2020), available at http://www.fatf-gafi.org/publications/fatfgeneral/documents/covid-19-impact-oct-2020.html.
8 Financial Action Task Force, "Outcomes FATF Plenary, 21-23 October 2020," (23 October 2020), available at http://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-fatf-plenary-october-2020.html?src=ilaw.
9 Financial Action Task Force, "Outcomes FATF Plenary, 21-23 October 2020," (23 October 2020), available at http://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-fatf-plenary-october-2020.html?src=ilaw.
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