'The Financial Action Task Force (FATF) was established in 1989 by the G7 to examine and develop measures to combat money laundering. It originally included the G7 countries, the European Commission and eight other countries.'
The FATF Plenary is important to regulated firms under the Money Laundering Regulations (MLR) because:
it directly influences Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) compliance obligations, firm wide risk assessments, client matter risk assessments, client due diligence, enhanced due diligence, ongoing client due diligence, ongoing enhanced due diligence, risk registers, training, monitoring, MLRO escalations, approvals, reporting, and regulatory enforcement, etc.
Read on:
FATF Sets Global Anti-Money Laundering (AML) Standards
The FATF is the global standard-setter for AML/CFT regulations, and its Recommendations help shape national laws, including the UK’s Money Laundering Regulations 2017 (MLR 2017).
See:
Money Laundering Regulations 2017(as amended)
Regulation 33 - Obligation to apply enhanced customer due diligence
'[F7(3) For the purposes of paragraph (1)(b)—
(a)[F8a “high-risk third country” means [F9a country named on either of the following lists published by the Financial Action Task Force as they have effect from time to time—
(i)High-Risk Jurisdictions subject to a Call for Action;
The FATF Plenary occurs three times a year February, June and October.
Why It Matters: Regulated firms need to stay updated on changes that could affect AML firm wide risk assessments, policies, client matter risk assessments, customer due diligence (CDD), enhanced due diligence (EDD), ongoing customer due diligence, ongoing enhanced due diligence, MLRO escalations, approvals, risk registers, training, monitoring, reporting obligations, and regulatory enforcement, etc.
Disclaimer: This newsletter does not contain legal or regulatory advice. You should alway undertake your own inquiries and make your own decisions.
The FATF "Grey List" (Jurisdictions under increased monitoring)
The FATF "Black List" (High-risk countries subject to countermeasures)
Why It Matters:
Regulated firms may decide to ask further questions about the countries that their client's, matters or transactions are connected with and firms may decide to review/ update their firm wide risk assessments, client and matter risk assessments, update training, risk registers, escalate to MLRO for approval, note their reasoning, etc.
If a client, matter or transaction involves a high-risk country, firms may need to apply Enhanced Due Diligence (EDD) or the firm may decide to terminate relationships depending on the circumstances and their internal policies.
What are your PCPs on counterparties, third parties etc?
Some FATF list countries may also be UK Sanction Regime Listed countries, and some FATF list countries maybe on other Sanction lists.
Failure to consider FATF’s lists could lead to regulatory breaches and penalties
importance of vigilance
Disclaimer: This newsletter does not contain legal or regulatory advice. You should alway undertake your own inquiries and make your own decisions.
Outcomes FATF Plenary, 19-21 February
The outcome was stated by FATF's President, Elisa de Anda Madrazo, it was also stated on FATF's website see link:
Please ensure you check and make your own inquiries.
High-Risk Jurisdictions subject to a Call for Action
21 February 2025
Jurisdictions subject to a FATF call on its members and other jurisdictions to apply countermeasures:
Democratic People's Republic of Korea (DPRK)
Iran
Jurisdiction subject to a FATF call on its members and other jurisdictions to apply enhanced due diligence measures proportionate to the risks arising from the jurisdiction:
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