The Financial Action Task Force (FATF) June Plenary meeting was the sixth and final plenary under the Presidency of T. Raja Kumar of Singapore and concluded on the 28th of June, 2024. Delegates from the nine FATF-style regional bodies (FSRB), encompassing over 200 jurisdictions, along with observers from international organizations, convened in Singapore for three days of discussions on critical issues related to money laundering, terrorism financing, and proliferation financing.
The FATF June Plenary meeting yielded crucial insights that are pivotal for shaping international financial regulation. This article explores the significant highlights and outcomes from the meeting, highlighting their profound implications for global financial oversight.
FATF June Plenary Meeting 2024 Changes to the Grey List And Black List.
The FATF June Plenary meeting has adjusted it grey and black list by adding and removing some countries from its increased monitoring list while FATF Black list remain unchanged. The countries include:Monaco,Venezuela,Jamaica and Turkiye.
Meanwhile, Nigeria still maintains its position on the grey list, which it was added to the grey list under Singapore’s Presidency of T. Raja Kumar in February 2023. Being grey-listed can help the country correct its issues and boost its economy, while also serving as a warning against more severe measures on the blacklist.
Additions to the Grey List: Monaco and Venezuela.
MONACO: Monaco, recognized for having the highest concentration of millionaires and billionaires worldwide, has been added to the grey list for insufficient progress in combating illicit financial flows during the FATF June plenary meeting. Following a mutual evaluation report (MER) from a MONEYVAL review in December 2022. Monaco has several deficiencies including misaligned investigative and prosecutorial practices for money laundering, insufficient prioritization and effectiveness in handling ML cases and recovering proceeds, inefficiency in beneficial ownership checks, and a weak sanctions regime lacking severity, deterrence, and timely enforcement.
VENEZUELA: During the FATF June plenary meeting, venezuela was added to the grey list due to concerns about the money laundering (ML) risks associated with Venezuela’s large informal economy, including illegal mining, and highlighted terrorist financing threats linked to the close economic alliance between Caracas and Tehran, as reported by the assessment team on the mutual evaluation report (MER).
Consequently,venezuela has agreed to implement its FATF action plan to strengthen its understanding of ML and TF risks, subject all financial institutions (FIs)and designated non-financial businesses and professions (DNFBPs) to AML/CFT measures, provide prompt access to beneficial ownership information, enhance FIU resources, improve the handling of ML/TF cases, protect NPOs from abuse while allowing legitimate activities, and enforce targeted financial sanctions promptly.
Removals from the Grey List: Jamaica and Türkiye.
JAMAICA: Jamaica have been removed from the grey list during the FATF June plenary meeting due to their progress in improving the AML/CFT regime and strengthened the effectiveness of its AML/CFT regime to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in February 2020 by developing a comprehensive understanding of ML/TF risks, including all FIs and DNFBPs in the AML/CFT regime, preventing misuse of legal entities, increasing ML investigations and prosecutions, implementing timely financial sanctions for terrorist financing, and adopting a risk-based approach for NPO supervision. However, Jamaica should continue to work with CFATF to sustain its improvements in its AML/CFT system.
TURKIYE: During the FATF June plenary meeting, Türkiye was removed from the grey list due to its significant progress in enhancing its AML/CFT regime. Türkiye has strengthened its effectiveness in addressing strategic deficiencies identified by the FATF in October 2021 by allocating additional resources to the FIU, implementing deterrent sanctions for AML/CFT violations, enhancing the use of financial intelligence, conducting more complex money laundering investigations and prosecutions, and clearly defining responsibilities and performance objectives for authorities involved in asset recovery and terrorism financing cases.
No Changes to the Black List at the FATF June Plenary Meeting 2024.
During the FATF June Plenary meeting 2024, no new entries were added to the blacklist, indicating countries’ strong efforts to avoid inclusion. However, jurisdictions already on the list have shown no progress towards removal. Those with significant deficiencies in combating money laundering, terrorist financing, and proliferation financing continue to be closely monitored.
Revised Criteria for Prioritizing Countries in the International Cooperation Review Group (ICRG) Review Process.
FATF approved new criteria for selecting countries for review by the international cooperation review group (ICRG) during the FATF June plenary meeting. This process aims to identify countries with weaknesses in their AML/CFT frameworks that pose risks to the world financial system. Depending on the level of concern, the FATF may place these countries on either the “grey” or “black” list. The revised criteria will be implemented in the next assessment cycle.
Methodology For Revised Criteria.
During the FATF June plenary meeting, members agreed on revised criteria adopted in October 2023 for assessing countries’ compliance with FATF standards on assets and international cooperation, requiring each country to prioritize asset recovery, identify and trace criminal property, obtain and enforce confiscation orders, and provide constructive and timely international cooperation.
Mutual Evaluation Reports Of India and Kuwait.
India: During the FATF June plenary meeting, two MERs were discussed and adopted. First, the India report was praised for its high compliance with FATF recommendations and its effective measures to combat money laundering, terrorist financing, and proliferation financing.
However, during the FATF June plenary meeting, it was stated that India could further improve its efforts by enhancing supervision and preventive measures in certain non-financial sectors, resolving delays in money laundering and terrorist financing prosecutions, engaging with non-profit organizations to educate them about terrorism financing risks, and ensuring counter-terrorism financing measures for the non-profit sector follow a risk-based approach.
Kuwait: The plenary also reviewed and adopted the joint mutual evaluation report from the FATF-MENAFATF assessment and concluded that Kuwait has an adequate legal and supervisory framework to combat ML/TF/PF. However, Kuwait has some shortcomings in achieving effective outcomes and is encouraged to enhance its understanding of ML/TF risks, improve TF investigations and prosecutions, ensure timely legal freezing of assets linked to terrorism or WMD financing, and focus on preventing misuse of legal entities and applying risk-based measures to protect the non-profit sector from TF abuse. According to the plenary during the FATF June plenary meeting, Both countries’ reports await publication pending the FATF’s final quality and consistency review.
Update on Russia’s Suspension.
The suspension of the Russian Federation’s membership remains in effect. In light of statements issued since March 2022, during the FATF June plenary meeting,the plenary emphasizes the importance of all jurisdictions remaining vigilant against current and emerging risks related to efforts to circumvent measures taken against the Russian Federation, aiming to safeguard the international financial system.
Other Important Development From the FATF June Plenary Meeting.
- DNFBP compliance review
The FATF has completed its review of measures implemented by its members to prevent exploitation of gatekeepers like accountants, lawyers, real estate agents, and trust and company service providers for money laundering and terrorist financing. The results of this review will be published in July 2024.
- Update on standards for virtual assets.
The FATF is set to publish its fifth annual update on jurisdictions’ adoption of standards for virtual assets and virtual asset service providers. Despite some progress since the last update, many jurisdictions remain partially compliant or non-compliant, posing risks of misuse for virtual assets and service providers. At the FATF June plenary meeting, the organization stressed the urgency of swiftly and comprehensively implementing these requirements and reaffirmed its commitment to monitoring progress closely. The fifth annual update is expected to be released in July 2024.
- Revision of payment transparency.
The FATF is updating its standards to include changes in cross-border payment systems and industry standards, notably ISO 20022, to ensure adherence to AML/CFT regulations. At the FATF June plenary meeting, discussions focused on the results of a public consultation on proposed amendments aimed at improving the speed, efficiency, and transparency of cross-border payments. As a result, further consultations with relevant experts were deemed necessary before finalizing these amendments.
- Global Network Cooperation.
During the FATF June plenary meeting, the FATF President convened with FSRB Chairs to review progress on the 2022 Strategic Vision for the Global Network and underscore accomplishments in enhancing FATF-FSRB collaborations. They established priorities for the upcoming year, including enhancing FSRBs’ involvement in FATF activities, preparing for new mutual evaluations, and bolstering regional expertise in AML/CFT.
- Women in FATF and the Global Network initiative.
Ms. Indranee Rajah launched the e-book “Breaking Barriers: Inspiring the Next Generation of Women Leaders“ as part of the Women in FATF and the Global Network (WFGN) initiative, supporting women leaders during the Singapore Presidency and enhancing community efforts.
- Priorities of the incoming Mexican Presidency for 2024-2026.
Elisa de Anda Madrazo, the incoming President, outlined the priorities of the Mexican Presidency during the FATF June plenary meetings. Mexico will assume the FATF Presidency from July 1, 2024, to June 30, 2026. She emphasized priorities including financial inclusion, readiness for assessments, fostering cohesion within the Global Network, implementing standards effectively, and combating terrorism and proliferation financing.
What are the action steps for compliance officers?
Prioritize understanding the February plenary results, especially upcoming Mutual Evaluation Reports (MERs) in their operating countries, promptly adjust risk scores for countries affected by grey list changes and implement required due diligence measures and take note of forthcoming FATF guidance dates, crucial for shaping national regulatory approaches.
You can find the previous plenary coverage by A&D Forensics here:
FATF February Plenary meeting,2024.
Contributor: Ibrahim Anuoluwapo Azeez
