The FATF Recommendations on Combating Money Laundering … · The FATF Recommendations on Combating...

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FINANCIAL ACTION TASK FORCEGROUPE D’ACTION FINANCIÈRE

The FATF Recommendations on Combating Money Laundering and the Financing of Terrorism

& Proliferation

Tom NeylanFATF Secretariat

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The Money Laundering Problem

UNODC (2011) estimates scale of criminal proceeds and money laundering: – Criminal proceeds: 3.6% of global GDP

($2.1 trillion in 2009)

– Money laundering: 2.7% of global GDP ($1.6 trillion in 2009)

– Some estimates see tax evasion as a further 2% of global GDP.

13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org

Why use financial measures?

Up to 70% of crime is estimated to be acquisitive

Anti Money Laundering (AML) measures can:– Detect criminals through their financial activity;

– Deter criminals by confiscating proceeds of crime;

– Disrupt terrorists by undermining their finances;

– Protect the financial system from illicit funds.

The Financial Action Task Force

Created in 1989 as a Task Force Mandate to:– Set standards to combat Money laundering and

the Financing of Terrorism & WMD Proliferation;– Assess compliance with the FATF standards;– Identify & respond to threats to the integrity of

the international financial system.

Next round of peer-review assessments to begin in January 2014, focusing on effectiveness.

FATF Members

• 34 Member Jurisdictions• 2 Regional organisations• 22 Observer organisations

FATF Global Network Eight FATF-Style Regional Bodies

Total membership: 187 Countries

Key themes of the FATF Standard

Policies and Co-ordination

Money Laundering and Confiscation Terrorist and Proliferation Financing

Preventive Measures

Legal persons and arrangements

Powers of competent authorities International co-operation

Policies and Co-ordination– National Co-operation and Co-ordination

– Risk Assessment & Risk-based approach added in 2012

Money Laundering and Confiscation

Terrorist and Proliferation Financing

Preventive Measures Legal persons and arrangements

Powers of competent authorities

International co-operation

Money Laundering and Confiscation– Criminalise money-laundering

– Confiscation of criminal proceeds

Money Laundering and Confiscation– 2012 Recommendations require predicate offences to include

Tax Crimes

Preventive Measures

Legal persons and arrangements Powers of competent authorities

– Criminalise terrorist financing

– Implement targeted financial sanctions (asset freezing)

– Oversight of non-profit organisations

– 2012 Recommendations add targeted financial sanctions against the Financing of Proliferation

Preventive Measures

Legal persons and arrangements Powers of competent authorities

Preventive Measures (by financial institutions and others)

– Customer Due Diligence

– Suspicious Transaction Reporting

– 2012 Recommendations add new requirements for domestic Politically Exposed Persons

Preventive Measures

Legal persons and arrangements– Transparency of beneficial ownership of companies

– Transparency of beneficial ownership of trusts

– 2012 Recommendations strengthen transparency requirements and place new controls on e.g. bearer shares

Preventive Measures

Powers of competent authorities– Regulation and supervision of financial institutions

– Powers and responsibilities of law enforcement

– Financial Intelligence Unit

Preventive Measures

Powers of competent authorities International co-operation

– Mutual Legal Assistance & Extradition

– Freezing and Confiscation of Assets

– 2012 Recommendations remove obstacles and strengthen practical requirements for cooperation.

FINANCIAL ACTION TASK FORCEGROUPE D’ACTION FINANCIÈRE

For more information:

www.fatf-gafi.org

contact@fatf-gafi.org

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The FATF Recommendations on Combating Money Laundering … · The FATF Recommendations on Combating...

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