The ministers of the Financial Actional Task Force (FATF) at their biennial meeting in Washington last week said they “note with concern” that effectiveness of measures in place to fight money laundering, terrorist financing, and proliferation financing, remains insufficient in many countries.
They committed to take swift and decisive action through the FATF mutual evaluation process to improve the effectiveness of measures to fight these risks and sharpen the focus on more recently recognised threats associated with ethnically or racially motivated terrorism, environmental crime and migrant smuggling.
“We commit to swift and decisive action to improve the effectiveness of the measures in all FATF jurisdictions,” the declaration of FATF ministers states.
It echoes the recently published Report on the State of Effectiveness and Compliance with the FATF Standards (Trade-based Financial Crime, 22 April 2022), which concluded that many countries have made considerable progress in establishing the technical requirements of the FATF standards, but greater effort is needed to ensure the effective implementation of those standards.
Many countries still do not effectively prevent the abuse of companies and legal arrangements according to the declaration.
The ministers want to see the prompt implementation of the FATF’s global beneficial ownership rules to stop criminals from hiding their illicit activities and financial gains behind anonymous shell companies and other entities.
New and known threats
Substantial sums are generated by criminals associated with ethnically or racially motivated terrorism, environmental crime and migrant smuggling that are subsequently channelled through the financial system to fund further crimes and terrorism the declaration concludes.
The ministers say FATF is committed to responding swiftly to significant new threats, but will not lose sight of known threats, such as drug trafficking, tax crimes and fraud, which keep generating significant profits for criminals.
The 21 April 2022 declaration of FATF ministers can be found here.
Report on the State of Effectiveness and Compliance with the FATF Standards can be found here.
Categories: Trade Based Financial crimes News