Key Developments of FATF Plenary, 21-23 February 2024

The Financial Action Task Force wrapped up the 5th meeting on the 23rd of February, 2024 in Paris, France with T. Raja Kumar from Singapore taking the presiding role at the meeting. The 3-day Plenary started on 21 February 2024 and continued there with debates on the important money laundering, terrorist financing, and proliferation financing issues.

Key Participants

Over 200 delegates from the Global Network members, in addition to international observing organizations such as the UN, IMF, IPCEO- INTERPOL, the World Bank, and the Egmont Group attended the session.

Adherence To The Compulsory FATF Standards

Jurisdictions Under Increased Monitoring

FATF has singled out some jurisdictions that are constantly tending to the key issues in its place, whether it is a technical or operational problem. This time there are 2 additional countries; Kenya and Namibia have joined jurisdictions that are under increased monitoring. These countries shall implement action plans that will resolve all the retrogression deficiencies within a specific time frame.

Jurisdictions Named For Call For Action

As of the Feb 2024 Plenary, no new country or jurisdiction has been added to this side except the previous countries like the Democratic People’s Republic of Korea (DPRK), Iran, and Myanmar call to action to rectify their weaknesses and reduce risks.

Jurisdictions Removed From Grey List

The FATF successfully got Barbados, Uganda,  Gibraltar, and the United Arab Emirates off the list of countries that fall in the grey list, i.e. a list of jurisdictions under increased monitoring. Such a decision reflects the positive developments by which they have proved to effectively tackle the strategic AML/CFT issues that were previously flagged in the Mutual Evaluations Guidelines.

2024 Strategic Initiatives

FATF General Plenary in February 2024 adopted a complete list of strategic initiatives and priorities for 2024–2026, where major work lines have been created and promoted accordingly. These measures are there to help the global anti-money laundering and terrorist financing campaigns while ensuring the cohesion of the global financial system.

Recommendation 15: Regulating Virtual Assets

FATF underlines the obstacles in controlling virtual assets activities and puts the stress on treating VASP regulations as a possible way of dealing with the risks. The FATF has published a global overview of adopted regulatory steps on jurisdictions that had preceded virtual asset activity. The aim is to promote their compliance with the recommended Regulation 15. By implementing a roadmap and a stocktaking of the existing level of implementation, FATF clearly shows the gravity of concerted efforts that need to be achieved to ensure effective VASP regulation.

Recommendation 16: Usage of Wire Transfer Standards

Furthermore, the Plenary reviewed some possible adjustments to recommendation 16 and its explanatory statement about wire transfers. The planned improvements will match with the recent business themes and, thus, will make the connection of cross-border transfers more cost-and time-efficient as well as transparent, which will be instrumental in fighting money laundering and terrorist financing.

Recommendation 25: Promoting Beneficial Ownership Transparency

One of the significant results of the Plenary is the announcement of the new risk-based implementation guidance about Recommendation 25 related to beneficial ownership and restoring legal arrangements. This step is envisaged as one of the countermeasures to mask criminal activities and funds through multi-layered corporate frameworks and trusts.

In practical terms, FATF announces that the new standards serve to illustrate its determination to eliminate mechanisms that are deliberately left to benefit illegal activities.

Recommendation 8: Protecting Non-Profit Organizations

The primary objective of FATF in terms of combating terrorism financing was presented in a modified form of Recommendation 8 and it was a commitment to ensure that NPOs do not get involved in terrorist financing.

Through developing risk-based measures and upgrading evaluation methods, the FATF strives to eliminate unintended effects and foster the empowerment of NGOs that can prevent humanitarian crises. The said adjustments contribute to the attainment of the objectives simultaneously while complying with the laundering legislation and facilitating the legal activities of NPOs.

FATF Appointed New Presidential: 2024-2026

The Plenary pledged the selection of Ms. Elisa de Anda Madrazo; currently serving in the Mexican Finance Ministry, as a FATF president, for a term of two years. Taking over the commands from Mr. T. Raja Kumar’s two-year Presidency term, Ms. Madrazo will lead the role on July 1, 2024.

Final Remarks

The results of the FATF Plenary Meeting bolster the importance of the FATF’s role as a global regulatory and policing agency in the fight to protect the financial system from illegal activities. Some of its measures for combating financial crimes are beneficial ownership transparency, virtual asset regulations, payment transparency standards, and protecting non-profit organizations. The FATF remains in the frontline of fighting financial crime.

The forthcoming step will be employing the adopted decisions which should assure the solidity of the global financial system and support stable and sustainable economic development.