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
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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.
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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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.
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FATF Members
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• 34 Member Jurisdictions• 2 Regional organisations• 22 Observer organisations
FATF Global Network Eight FATF-Style Regional Bodies
Total membership: 187 Countries
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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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
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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Key themes of the FATF Standard
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
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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Key themes of the FATF Standard
Policies and Co-ordination
Money Laundering and Confiscation– Criminalise money-laundering
– Confiscation of criminal proceeds
Terrorist and Proliferation Financing
Preventive Measures Legal persons and arrangements
Powers of competent authorities
International co-operation
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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Key themes of the FATF Standard
Policies and Co-ordination
Money Laundering and Confiscation– 2012 Recommendations require predicate offences to include
Tax Crimes
Terrorist and Proliferation Financing
Preventive Measures
Legal persons and arrangements Powers of competent authorities
International co-operation
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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Key themes of the FATF Standard
Policies and Co-ordination
Money Laundering and Confiscation Terrorist and Proliferation Financing
– Criminalise terrorist financing
– Implement targeted financial sanctions (asset freezing)
– Oversight of non-profit organisations
Preventive Measures Legal persons and arrangements
Powers of competent authorities
International co-operation
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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Key themes of the FATF Standard
Policies and Co-ordination
Money Laundering and Confiscation Terrorist and Proliferation Financing
– 2012 Recommendations add targeted financial sanctions against the Financing of Proliferation
Preventive Measures
Legal persons and arrangements Powers of competent authorities
International co-operation
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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Key themes of the FATF Standard
Policies and Co-ordination
Money Laundering and Confiscation Terrorist and Proliferation Financing
Preventive Measures (by financial institutions and others)
– Customer Due Diligence
– Suspicious Transaction Reporting
– 2012 Recommendations add new requirements for domestic Politically Exposed Persons
Legal persons and arrangements
Powers of competent authorities
International co-operation
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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Key themes of the FATF Standard
Policies and Co-ordination
Money Laundering and Confiscation Terrorist and Proliferation Financing
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
Powers of competent authorities
International co-operation
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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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– Regulation and supervision of financial institutions
– Powers and responsibilities of law enforcement
– Financial Intelligence Unit
International co-operation
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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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
– Mutual Legal Assistance & Extradition
– Freezing and Confiscation of Assets
– 2012 Recommendations remove obstacles and strengthen practical requirements for cooperation.
13-Nov-12 FINANCIAL ACTION TASK FORCE | GROUPE D’ACTION FINANCIÈREwww.fatf-gafi.org
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FINANCIAL ACTION TASK FORCEGROUPE D’ACTION FINANCIÈRE
For more information:
www.fatf-gafi.org
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