FATF engages with private sector on AML/CFT issues

The Financial Action Task Force (FATF) has held its annual forum for its members to engage directly with the private sector on anti-money laundering and counter financing of terrorism (AML/CFT) issues.

The Private Sector Consultative Forum was held on 20-22 March 2017 in Vienna, Austria, and was hosted by the United Nations Office on Drugs and Crime (UNODC).

Information sharing

The meeting concluded that effective information sharing is a cornerstone of a well-functioning AML/CFT framework. The FATF sought feedback from the private sector representatives on barriers to information sharing and measures to address them.

Tensions between information sharing on the one hand and data protection and privacy requirements on the other were discussed. Practical examples were given of how information sharing between financial institutions that are not part of the same group can work.

According to FATF, it will take account of private sector input on these matters as it prepares draft guidance on information sharing.

Correspondent banking

The annual forum also discussed correspondent banking issues. Participants welcomed the 2016 FATF Guidance on Correspondent Banking Services, which they consider has clarified regulatory and supervisory expectations associated with correspondent banking.

In particular, participants welcomed the absence of FATF requirements for correspondent institutions to conduct customer due diligence on each individual customer of their respondent institutions.

Financial inclusion

On the subject of financial inclusion, participants focused on publicly sponsored central databases of basic information on people’s identity, authenticated through biometrics or fingerprints.

These tools can help financial institutions conduct the basic customer due diligence steps to establish relationships with undocumented people, and play a key role for financial inclusion.

Terrorist financing

The FATF sought feedback on the how the Detecting Terrorist Financing: Relevant Risk Indicators report was disseminated to banks and other relevant private sector representatives.

Private sector participants welcomed the information contained in the report, and requested that it be kept up-to-date and specific risk indicators be developed for individual sectors.

Categories: Trade Based Financial crimes News

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