The Royal United Services Institute (RUSI) has published a policy brief outlining five areas within the Financial Action Task Force (FATF) framework that require revision, not only to achieve the primary desired outcome of tackling financial crime but also to prioritise the protection and promotion of financial inclusion.
Whilst recognising its primary brief to counter money laundering and terrorist financing, the brief says little concrete work has been done by the FATF to actively promote financial inclusion.
The policy brief sets out five recommendations for how the FATF could refocus its framework to promote financial inclusion based on extensive research focused on three case study countries, a review of the existing literature and interviews with key stakeholders.
The brief recommends that the FATF should work harder to promote compliance practices that enable financial inclusion and update its methodology to recognise that financial inclusion contributes to the effectiveness of a country’s anti-money-laundering and counter financing of terrorism regime.
The FATF should also strengthen assessor training on financial inclusion and measure the impact on financial inclusion of the International Cooperation Review Group process which analyses high-risk jurisdictions and recommends actions to address money laundering and terrorist financing risks.
Finally, RUSI recommends that the task force should ‘walk the talk’, ensuring all stakeholders understand that promoting financial inclusion is key to the successful implementation of the FATF framework.
FATF’s financial inclusion strategy
The FATF should address these recommendations by devising its own financial inclusion strategy that creates a roadmap for how it, along with the outcomes from its unintended consequences project (Trade-based Financial Crime, 22 March 2021), will be introduced and sustained over time.
London based RUSI is the world’s oldest independent think tank on international defence and security.
RUSI’s policy brief, Walk the Talk: How the Financial Action Task Force Can Prioritise Financial Inclusion, can be found here.
The policy brief is supplemented by a RUSI occasional paper, Assessing the Financial Action Task Force’s Impact on Digital Financial Inclusion, which can be found here.
Categories: Trade Based Financial crimes News