In a report published today, the Council of Europe’s anti-money laundering Committee (MONEYVAL) calls on countries to develop financial inclusion policies and initiatives in order to strengthen financial integrity. Financial inclusion potentially impacts on two areas which underpin work in the Council of Europe: the promotion of human rights (in this case, arguably, the right to financial services); and the protection of the rule of law by the prevention of greater use of informal or underground banking and money transfer networks.
The report entitled Strengthening Financial Integrity through Financial Inclusion aims to establish the extent to which financial inclusion is currently taken into account by MONEYVAL states and territories. According to its conclusions, a number of states and territories have found a balance between a robust regime for combating money laundering and the financing of terrorism and the development of financial inclusion policies and procedures. They are also considering financial inclusion as an element in the development of their national risk assessments.
The report identifies financial illiteracy, lack of experience of financial products, lack of confidence in financial institutions and credit ratings as potential barriers to improving the level of financial inclusion. To counter these barriers and improve financial inclusion, the report points out a number of initiatives that are either being considered or have been successfully implemented such as education and awareness raising, development of basic financial products, private sector initiatives in developing basic financial products, use of the Post Office network in rural communities, relaxation of anti-money laundering and counter terrorist financing requirements for low-risk customers, consumer protection, and complaints procedures.
The report draws the conclusion that financial inclusion policies and initiatives appear to constitute an important aspect of the fight against money laundering and terrorist financing. MONEYVAL states and territories are therefore encouraged to consider developing financial inclusion policies and initiatives and, in particular, to include a consideration of financial inclusion in their national risk assessments. MONEYVAL has decided to repeat this exercise every two years and will publish a further update in 2016.
