The Financial Action Task Force (FATF) has said it will continue its efforts to determine the drivers of de-risking and lobby key international stakeholders to counter the phenomenon of financial institutions terminating or restricting business relationships rather than manage the risks.
Following a 23 October plenary meeting in Paris, the inter-governmental body for combating money laundering, terrorist financing and other threats to the international financial system, has also said that it is a misconception to characterise de-risking exclusively as an anti-money laundering issue.
De-risking is crucially important to the FATF, not least because it believes the issue can actually introduce risk and opacity into the global financial system by forcing individuals and entities into less regulated or unregulated channels.
It is also central to the FATF’s mandate to ensure that the global anti-money laundering and counter financing of terrorism (AML/CFT) standard is well understood and accurately implemented.
Driven by these factors, the FATF has resolved to gather further evidence and analysis on the drivers and scale of de-risking.
The international body says it will also make full use of the work being conducted in other relevant international groups and forums, including the G20 Global Partnership for Financial Inclusion, the IMF, the World Bank Group, and the Basel Committee on Banking Supervision.
A full statement by the FATF on which this article is based entitled, ‘FATF clarifies risk-based approach: case-by-case, not wholesale de-risking’, can be found here: http://www.fatf-gafi.org/documents/news/rba-and-de-risking.html
Categories: Trade Based Financial crimes News