APC Compliance and Regulatory Services’ Post

Financial Action Task Force (FATF) is considering revisions to the #FATF Recommendations to better align them with measures to promote financial inclusion. This is an important initiative under the leadership of FATF President, Elisa de Anda Madrazo, who aims to advance financial #inclusion by strengthening the implementation of the risk-based approach (#RBA) and a proportional application of AML/CFT measures. Below are some key proposed revisions to Recommendation 1 and its Interpretive Note: ✅ On adoption of simplified measures in lower risk situations, proposing to replace “countries may decide to allow simplified measures” with “COUNTRIES #SHOULD ALLOW AND ENCOURAGE #SIMPLIFIED MEASURES”. This would place an explicit requirement on countries to be more active in creating an enabling environment for implementation of simplified measures. ✅ Replacing the term “commensurate” with “proportionate” in R. 1, in order to clarify how these concepts should be applied in the context of a #RBA; to set clearer expectations with regard to simplified measures; and to align the FATF’s language more closely with that of financial inclusion stakeholders and frameworks. ✅ Requiring #supervisors to “review and take into account the risk mitigation measures undertaken by financial institutions/DNFBPs”, to avoid overcompliance resulting from an only partial understanding of the risks, and also to consider #proportionality in the engagements with them. ✅ On “non-face-to-face customer-identification and transactions” as an example of potentially higher-risk situations, addition of qualification (“unless appropriate risk mitigation measures have been implemented”). This is to reflect technological advancements in #DigitalIdentity systems that may reduce the risks associated with non-face-to-face interactions, and recognize that in many countries this has become the normal mode of interaction with financial institutions. 🔹 FATF invites feedback and comments on these revision by 6 December 2024 (18:00 CET). https://lnkd.in/ewWwYdcB Ivo Jeník, Louis De Koker, CGAP #AML, #CFT

📢 𝗘𝗕𝗔 𝗼𝗻 𝗽𝗮𝘃𝗶𝗻𝗴 𝘁𝗵𝗲 𝘄𝗮𝘆 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗲𝘀𝘁𝗮𝗯𝗹𝗶𝘀𝗵𝗺𝗲𝗻𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗻𝗲𝘄 𝗘𝗨 𝗔𝗠𝗟 𝗔𝘂𝘁𝗵𝗼𝗿𝗶𝘁𝘆 (𝗔𝗠𝗟𝗔) EBA welcomes the new EU framework to combat ML/TF, which will establish the AMLA to centralise and enhance the EU's anti-financial crime efforts. To ensure continuity and minimize disruption, the EBA will retain its AML/CFT powers and mandates until December 2025. During the transition period, the EBA will assist national competent authorities in preparing for the AMLA and will coordinate with the European Commission’s AMLA task force, which will oversee the establishment and initial operations of the new authority. 𝗧𝗵𝗿𝗼𝘂𝗴𝗵𝗼𝘂𝘁 𝟐𝟎𝟐𝟒 𝗮𝗻𝗱 𝟐𝟎𝟐𝟓, 𝘁𝗵𝗲 𝗘𝗕𝗔'𝘀 𝗽𝗿𝗶𝗼𝗿𝗶𝘁𝗶𝗲𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗔𝗠𝗟/𝗖𝗙𝗧 𝗱𝗼𝗺𝗮𝗶𝗻 𝘄𝗶𝗹𝗹 𝗳𝗼𝗰𝘂𝘀 𝗼𝗻 𝘁𝗵𝗲 𝗳𝗼𝗹𝗹𝗼𝘄𝗶𝗻𝗴 𝗮𝘀𝗽𝗲𝗰𝘁𝘀: • A methodology for selecting financial institutions for direct EU-level AML/CFT supervision; • A common risk assessment methodology; • Information necessary to carry out customer due diligence; • Criteria to determine the seriousness of a breach of AML/CFT provisions. 𝗚𝗼𝗶𝗻𝗴 𝗳𝗼𝗿𝘄𝗮𝗿𝗱, the EBA will continue working closely with AMLA. Once the specific AML/CFT powers are transferred to AMLA, the EBA will retain responsibility for addressing ML/TF risks within its prudential remit. 𝗣𝗹𝗲𝗮𝘀𝗲 𝗱𝗼 𝗻𝗼𝘁 𝗵𝗲𝘀𝗶𝘁𝗮𝘁𝗲 𝘁𝗼 𝗰𝗼𝗺𝗺𝗲𝗻𝘁 𝗼𝗻 𝘄𝗵𝗶𝗰𝗵 𝗰𝗼𝘂𝗻𝘁𝗿𝘆 𝘄𝗶𝗹𝗹 𝗮𝘀𝘀𝘂𝗺𝗲 𝘁𝗵𝗲 𝗖𝗵𝗮𝗶𝗿 𝗼𝗳 𝗔𝗠𝗟𝗔 📍 Link in comments below! Stay tuned!

📢 Update on the Isle of Man’s AML/CFT Framework In line with evolving international standards, the Isle of Man FSA, working alongside the Departments of Home Affairs and Treasury, has implemented significant updates to the Island's AML/CFT framework. These updates, effective from 25 October 2024, include amendments to the Proceeds of Crime Act 2008 (POCA) and the Designated Business (Registration and Oversight) Act 2015 (DBROA). Additionally, the new Travel Rule (Transfer of Virtual Assets) Code 2024 came into force on 28 October 2024, impacting Virtual Asset Service Providers (VASPs). These changes ensure the Island’s AML/CFT framework aligns with global standards set by the Financial Action Task Force (FATF), introducing obligations for VASPs to manage and retain critical customer information during virtual asset transactions. Navigating regulatory change can be complex. Our advisory team is here to support your business considering these new requirements to ensure your company is maintaining robust regulatory compliance. From strategic assessments to hands-on reviews, we provide tailored compliance advisory solutions to help firms stay ahead in an increasingly regulated environment. Reach out to us to explore how our compliance advisory solutions can help your firm remain resilient and compliant

NEW FATF ANNOUNCEMENT - PLS REVIEW The Financial Action Task Force (FATF) is considering revisions to the FATF Recommendations in order to better align them with measures to promote financial inclusion. This is part of FATF’s programme of work to address the unintended consequences of AML/CFT measures. FATF is inviting views and comments on the proposed changes from interested stakeholders. The revisions focus on Recommendation 1 and its Interpretive Note, with corresponding changes to Recommendations 10 and 15 and related Glossary definitions. These proposed revisions aim to better promote financial inclusion through increased focus on proportionality and simplified measures in the risk-based approach, and to give countries, supervisors, and financial institutions greater confidence and assurance when implementing of simplified measures. Please provide your response, including any drafting proposals to FATF.Publicconsultation@fatf-gafi.org with the subject-line “Comments of [author] on the proposed revisions to R.1/INR.1/INR.10/INR.15”, by 6 December 2024 (18h00 CET). Reported by Financial Action Task Force (FATF) https://lnkd.in/enaYn_m7

FATF Opens Consultation on Risk-Based Approach in AML/CFT The FATF has launched a new consultation focused on enhancing its Recommendation 1: "assessing risks and applying a risk-based approach." This will also impact Recommendations 10 (customer due diligence) and 15 (new technologies). Key proposed changes include: - Proportionality: Supervisors would now consider the specific risk mitigation steps taken by financial institutions (FIs) and designated non-financial businesses and professions (DNFBPs), aiming to prevent "over-compliance" that arises from incomplete risk understanding. - Simplified Measures for Lower-Risk Scenarios: Countries may be required to actively support simplified measures in lower-risk situations, helping institutions apply a balanced approach. This shift towards a nuanced, risk-sensitive approach could lead to more effective AML/CFT compliance and greater regulatory clarity. The consultation is open until December 6, 2024: https://lnkd.in/dUdpy5Hc #FATF #AML #Compliance #RiskManagement #FinancialRegulation

⚠ Once in a lifetime opportunity happening twice this year. Imagine! ⚠ Financial Action Task Force (FATF) is considering revisions to Recommendation 1 (R.1). [This is after earlier this year, R.16 was published for consultation.] Not excited yet? R.1 is the recommendation that opens the door to a risk-based approach to anti-money laundering and counterterrorist financing (#AML/CFT) requirements. [I know, I know, bear with me...it's worth it!] So this risk-based approach (#RBA) allows countries and financial institutions to tailor their AML/CFT measures based on the risks they see - in their country, among customer segments, for specific products. More risks, more measures ↖. Less risks, less measures ↘. Normal risks, normal measures ⬅. ❗This is important, because many of the 1.4 billion excluded adults (and many more underserved) struggle to meet the standard #KYC requirements, usually because they don't have a government-issued #ID, proof of address etc. In fact, KYC-related challenges keep trending among top 5 reasons for financial exclusion based on The World Bank Findex data. At the same time, most of the excluded and underserved people are likely low(er) AML/CFT risks and could benefit from risk-based measures. In other words, well-implemented RBA can bring a lot of people to the formal financial system. [Does anyone know, how I can bold, underline and italicize this sentence?] The RBA concept is not new. It has been around for over a decade, and it's most known example are tiered accounts (AKA tiered KYC). Mexico is famous for implementing them, but there are other countries with tiered KYC too. Tiered accounts are great, but RBA allows for more. FATF feels that way too and that's why with the proposed revisions, they are trying (even if cautiously) to encourage more RBA exploration, experimentation, and implementation. ❓OK. So what?! Well, RBA is pretty important for the financial inclusion efforts (read above). FATF Recommendation 1 sets the tone and incentives for its implementation. And until ⏰ December 6, 6 p.m. CET, you can review and comment on the proposed revisions. Just visit this site:

EY AML Global Radar 🔊 : The Financial Action Task Force (FATF) has opened a public consultation on key recommendations to combat money laundering and terrorist financing. This is a crucial opportunity for stakeholders, including financial institutions, regulatory bodies, and the general public, to provide their insights and feedback on the proposed changes. This initiative is part of FATF’s ongoing efforts to enhance global financial security and promote inclusive financial systems.   Key areas include: 1. National Risk Assessments: Updated guidance to help countries better understand and mitigate illicit finance risks; 2.Payment Transparency: Enhancements to ensure transparency in cross-border payments; and 2. Financial Inclusion: Proposed changes to support inclusive financial practices while combating financial crimes. https://lnkd.in/eTRTmDXD   #Compliance #AntiMoneyLaundering #EYSupport #RegulatoryGuidance #RiskManagement #ProfessionalServices Paloma P.; Nitesh Krishnadath; Anne Fokkema

The Financial Action Task Force (FATF) is considering revisions to the FATF Recommendations in order to better align them with measures to promote financial inclusion. This is part of FATF’s programme of work to address the unintended consequences of AML/CFT measures.

𝗙𝗼𝗿 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗳𝗶𝗿𝗺𝘀, 𝗴𝗹𝗼𝗯𝗮𝗹 𝗼𝗽𝗽𝗼𝗿𝘁𝘂𝗻𝗶𝘁𝗶𝗲𝘀 𝗰𝗼𝗺𝗲 𝘄𝗶𝘁𝗵 𝗴𝗹𝗼𝗯𝗮𝗹 𝗿𝗶𝘀𝗸𝘀. KnowYourCountry provides comprehensive, regulator compliant, market-leading tools to mitigate involvement with financial crime and safeguard your investments 📊. 𝘞𝘩𝘺 𝘐𝘯𝘷𝘦𝘴𝘵𝘮𝘦𝘯𝘵 𝘗𝘳𝘰𝘧𝘦𝘴𝘴𝘪𝘰𝘯𝘢𝘭𝘴 𝘛𝘳𝘶𝘴𝘵 𝘜𝘴: • 𝗖𝗼𝘂𝗻𝘁𝗿𝘆-𝗦𝗽𝗲𝗰𝗶𝗳𝗶𝗰 𝗥𝗶𝘀𝗸 𝗥𝗲𝗽𝗼𝗿𝘁𝘀: Understand AML risks across 240+ jurisdictions, ensuring you’re making informed investment decisions. • 𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗼𝗿𝘆 𝗖𝗼𝗺𝗽𝗹𝗶𝗮𝗻𝗰𝗲: Listed in the guidelines of 17 regulators, KnowYourCountry’s truly global approach harnesses the methodologies and guidance of authorities such as FATF, for concise and easy to understand AML assessments. • 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗥𝗶𝘀𝗸 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁: Equip your organisation with the confidence to navigate jurisdictional-specific AML complexities, and implement effective controls to mitigate involvement with financial crime. 🤝 Whether you’re expanding into new markets or managing existing portfolios, KnowYourCountry is your partner in protecting your investments against financial crime. 👉 Schedule a demo to learn more about commercial use of our data 👉 https://lnkd.in/exUktXQv 👉 https://lnkd.in/ePc__-5x #KnowYourCountry #AML #CFT #countryrisk #riskassessment #investing #compliance #financialcrime

On 5 March 2024, the Financial Conduct Authority (FCA) sent a letter to the CEOs of 1000 financial institutions. The letter gives 6 months notice to comply with anti-money laundering (AML) "basic" rules. Here are some highlights: 🔹 Whether you're a financial institution, a service provider, or a business dealing with financial transactions, staying compliant with regulations is non-negotiable. 🔹 The FCA is on a mission, actively overseeing firms like yours to ensure you're following AML protocols. 🔹 If you're classified as an Annex 1 firm under the Money Laundering Regulations 2017 (link in the comments if you're wondering if this applies to you), this means you're obligated to meet AML standards, even if you're not authorised under the Financial Services and Markets Act 2000. 🔹 Recent reviews have uncovered common flaws in various areas crucial to fighting financial crime. From mismatches in your business model to uncertainties in #riskassessments and #duediligence. 🔹 Poor AML controls could unwittingly assist criminals in cleaning dirty money, perpetuating further illegal activities, and tarnishing the integrity of our financial markets. So, what now? 🔹 You've got six months from receiving this notice (letter below dated 5 March 2024, which gives you until 5 September) to conduct a thorough analysis and take corrective measures. 🔹 Take control of your Business Wide Risk Assessments (BWRA) and Customer Risk Assessments (CRA). Ensure they're current and robust enough to fend off financial crime risks effectively. 🔹 Invest in Your Team. This means proper resources and training. 🔹 Maintain a clear trail of your financial crime-related decisions. Proper documentation and independent audits serve as your best defence against regulatory scrutiny. 🔹 Book a demo with software such as Binderr to see how we can support your business with its AML obligations. Ignoring FCA warnings could have severe repercussions. Regulatory intervention, including fines and the removal of your Annex 1 firm status, is a real threat if you fail to address control failings. Time is of the essence. #AMLFrameworks #CommonFailings #RiskAssessments