FATF President Xiangmin Liu of the People’s Republic of China chaired the second Plenary under the Chinese Presidency of the FATF from 19-21 February 2020 where over 800 delegates, representing the global network of 205 countries and jurisdictions, as well as international organizations, discussed salient issues on mitigating money laundering and terrorist financing. Understanding and leveraging the use of digital identity and mutual evaluation together with follow-up reports were part of the strategic priorities discussed. The FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing risks emanating from the country. The Plenary also discussed the joint FATF-MENAFATF assessment of the United Arab Emirates and concluded that the country has implemented many recent measures to strengthen its system to combat ML and TF, including by developing a national risk assessment, AML/CFT strategy and effective measures to investigate and prosecute TF. The FATF has identified Albania, Barbados, Jamaica, Mauritius, Myanmar, Nicaragua and Uganda as jurisdictions with strategic AML/CFT deficiencies. Each jurisdiction has developed an action plan with the FATF to address the most serious deficiencies. The FATF welcomed their high-level political commitment to their action plans. The FATF discussed progress in its 12-month review of the implementation of the FATF’s new requirements, taking into account updates from private sector representatives on their proposed technical solutions. The FATF will report to the G20 in July 2020 on its analysis of ML/TF risks associated to so-called stable coins and the application of the FATF Standards to them. In June 2016, Iran committed to address its strategic deficiencies. Iran’s action plan expired in January 2018.
In October 2019, the FATF called upon its members and urged all jurisdictions to require increased supervisory examination for branches and subsidiaries of financial institutions based in Iran; introduce enhanced relevant reporting mechanisms or systematic reporting of financial transactions, and require increased external audit requirements for financial groups with respect to any of their branches and subsidiaries located in Iran. The FATF fully lifts the suspension of counter-measures and calls on its members and urges all jurisdictions to apply effective counter-measures, in line with Recommendation 19 given Iran’s failure to enact the Palermo and Terrorist Financing Conventions in line with the FATF Standards. Until Iran implements the measures required to address the deficiencies identified with respect to countering terrorism-financing in the Action Plan, the FATF will remain concerned with the terrorist financing risk emanating from Iran and the threat this poses to the international financial system.
The Plenary discussed progress on one of its priorities under the Chinese FATF Presidency: to tackle the financial flows linked to the illegal wildlife trade. The Plenary discussed the contributions and preliminary findings of this project that aims to analyse common supply chains and payment methods. The final Guidance paper, which will include a large number of case studies from countries that have experience in investigating the financial flows from the illegal wildlife.
The Plenary selected Dr Marcus Pleyer (Germany) to be the next FATF President. His term will begin on 1 July 2020, and he will be the first FATF President with a two-year term. Dr Pleyer currently holds the position of FATF Vice-President. He will continue in that role until the start of his term as President, at which point the FATF Plenary will appoint a new Vice-President.
In June 2016, the FATF welcomed Iran’s high-level political commitment to address its strategic AML/CFT deficiencies, and its decision to seek technical assistance in the implementation of the Action Plan. Since 2016, Iran established a cash declaration regime, enacted amendments to its Counter-Terrorist Financing Act and its Anti-Money Laundering Act, and adopted an AML by-law.
