About
Contents
List of recommendations
Technical compliance assessment
Recommendation
Interpretive Note
list ofresults
Glossary
FATF/OECD
A. AML/CFT POLICIES AND COORDINATION1. Assessing risks and applying a risk-based approach * |
CountriesAll references in the FATF Recommendations to country or countries apply equally to territories or jurisdictions. should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. identify, assess, and understand the money laundering and terrorist financing Terrorist financing is the financing of terrorist acts, and of terrorists and terrorist organisations. risks All references to risk refer to the risk of money laundering and/or terrorist financing. This term should be read in conjunction with the Interpretive Note to Recommendation 1. for the country, and should take action, including designating an authority or mechanism to coordinate actions to assess risks, and apply resources, aimed at ensuring the risks are mitigated effectively. Based on that assessment, countries should apply a risk-based approach (RBA) to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate with the risks identified. This approach should be an essential foundation to efficient allocation of resources across the anti-money laundering and countering the financing of terrorism (AML/CFT) regime and the implementation of riskbased measures throughout the FATF Recommendations. Where countries identify higher risks, they should ensure that their AML/CFT regime adequately addresses such risks. Where countries identify lower risks, they may decide to allow simplified measures for some of the FATF Recommendations under certain conditions.
Countries should also identify, assess, and understand the proliferation financing risks for the country. In the context of Recommendation 1, «proliferation financing risk» refers strictly and only to the potential breach, non-implementation or evasion of the targeted financial sanctions obligations referred to in Recommendation 7. Countries should take commensurate action aimed at ensuring that these risks are mitigated effectively, including designating an authority or mechanism to coordinate actions to assess risks, and allocate resources efficiently for this purpose. Where countries identify higher risks, they should ensure that they adequately address such risks. Where countries identify lower risks, they should ensure that the measures applied are commensurate with the level of proliferation financing risk, while still ensuring full implementation of the targeted financial sanctions as required in Recommendation 7.
Countries should require financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
1) Acceptance of deposits and other repayable funds from the public.
2) Lending.
3) Financial leasing.
4) Money or value transfer services.
5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
6) Financial guarantees and commitments.
7) Trading in:
a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
b) foreign exchange;
c) exchange, interest rate and index instruments;
d) transferable securities;
8) Participation in securities issues and the provision of financial services related to such issues.
9) Individual and collective portfolio management.
11) Otherwise investing, administering or managing funds or money on behalf of other persons.
12) Underwriting and placement of life insurance and other investment related insurance.
13) Money and currency changing.
and designated non-financial businesses and professions (DNFBPs) to identify, assess and take effective action to mitigate their money laundering, terrorist financing and proliferation financing risks.
A. AML/CFT POLICIES AND COORDINATION2. National cooperation and coordination* |
Countries should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. have national AML/CFT/CPF policies, informed by the risksProliferation financing risk refers strictly and only to the potential breach, non-implementation or evasion of the targeted financial sanctions obligations referred to in Recommendation 7. identified, which should be regularly reviewed, and should designate an authority or have a coordination or other mechanism that is responsible for such policies.
Countries should ensure that policy-makers, the financial intelligence unit (FIU), law enforcement authorities, supervisors and other relevant competent authorities, at the policymaking and operational levels, have effective mechanisms in place which enable them to cooperate, and, where appropriate, coordinate and exchange information domestically with each other concerning the development and implementation of policies and activities to combat money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction. This should include cooperation and coordination between relevant authorities to ensure the compatibility of AML/CFT/CPF requirements with Data Protection and Privacy rules and other similar provisions (e. g. data security/localization).
B. MONEY LAUNDERING AND CONFISCATIONThe term confiscation, which includes forfeiture where applicable, means the permanent deprivation of the funds or other assetsThe term funds or other assets means any assets, including, but not limited to, financial assets, economic resources, property of every kind, whether tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such funds or other assets, including, but not limited to, bank credits, travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts, or letters of credit, and any interest, dividends or other income on or value accruing from or generated by such funds or other assets. by order of a competent authority or a court. Confiscation or forfeiture takes place through a judicial or administrative procedure that transfers the ownership of specified funds or other assets to be transferred to the State. In this case, the person(s) or entity(ies) that held an interest in the specified funds or other assets at the time of the confiscation or forfeiture loses all rights, in principle, to the confiscated or forfeited funds or other assets. Confiscation or forfeiture orders are usually linked to a criminal conviction or a court decision whereby the confiscated or forfeited property is determined to have been derived from or intended for use in a violation of the law.3. Money laundering offence* |
Countries should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. criminalise money laundering on the basis of the Vienna Convention and the Palermo Convention. Countries should apply the crime of money laundering to all serious offences, with a view to including the widest range of predicate offences.
D. PREVENTIVE MEASURESRELIANCE, CONTROLS AND FINANCIAL GROUPS Financial group means a group that consists of a parent company or of any other type of legal person exercising control and coordinating functions over the rest of the group for the application of group supervision under the Core Principles, together with branches and/or subsidiaries that are subject to AML/CFT policies and procedures at the group level.18. Internal controls and foreign branches and subsidiaries* |
Financial institutionsFinancial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
1) Acceptance of deposits and other repayable funds from the public.
2) Lending.
3) Financial leasing.
4) Money or value transfer services.
5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
6) Financial guarantees and commitments.
7) Trading in:
a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
b) foreign exchange;
c) exchange, interest rate and index instruments;
d) transferable securities;
8) Participation in securities issues and the provision of financial services related to such issues.
9) Individual and collective portfolio management.
11) Otherwise investing, administering or managing funds or money on behalf of other persons.
12) Underwriting and placement of life insurance and other investment related insurance.
13) Money and currency changing.
should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. be required to implement programmes against money laundering and terrorist financing Terrorist financing is the financing of terrorist acts, and of terrorists and terrorist organisations.. Financial groups should be required to implement groupwide programmes against money laundering and terrorist financing, including policies and procedures for sharing information within the group for AML/CFT purposes.
Financial institutions should be required to ensure that their foreign branches and majorityowned subsidiaries apply AML/CFT measures consistent with the home countryAll references in the FATF Recommendations to country or countries apply equally to territories or jurisdictions. requirements implementing the FATF Recommendations through the financial groups’ programmes against money laundering and terrorist financing.
D. PREVENTIVE MEASURESRELIANCE, CONTROLS AND FINANCIAL GROUPS Financial group means a group that consists of a parent company or of any other type of legal person exercising control and coordinating functions over the rest of the group for the application of group supervision under the Core Principles, together with branches and/or subsidiaries that are subject to AML/CFT policies and procedures at the group level.19. Higher-risk countries* |
Financial institutions should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. be required to apply enhanced due diligence measures to business relationships and transactions with natural and legal persons Legal persons refers to any entities other than natural persons that can establish a permanent customer relationship with a financial institution or otherwise own property. This can include companies, bodies corporate, foundations, anstalt, partnerships, or associations and other relevantly similar entities., and financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
1) Acceptance of deposits and other repayable funds from the public.
2) Lending.
3) Financial leasing.
4) Money or value transfer services.
5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
6) Financial guarantees and commitments.
7) Trading in:
a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
b) foreign exchange;
c) exchange, interest rate and index instruments;
d) transferable securities;
8) Participation in securities issues and the provision of financial services related to such issues.
9) Individual and collective portfolio management.
11) Otherwise investing, administering or managing funds or money on behalf of other persons.
12) Underwriting and placement of life insurance and other investment related insurance.
13) Money and currency changing.
, from countries for which this is called for by the FATF. The type of enhanced due diligence measures applied should be effective and proportionate to the risks.
Countries should be able to apply appropriate countermeasures when called upon to do so by the FATF. Countries should also be able to apply countermeasures independently of any call by the FATF to do so. Such countermeasures should be effective and proportionate to the risks.
D. PREVENTIVE MEASURESREPORTING OF SUSPICIOUS TRANSACTIONS20. Reporting of suspicious transactions* |
If a financial institution suspects or has reasonable grounds to suspect that funds The term funds refers to assets of every kind, whether corporeal or incorporeal, tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such assets. are the proceeds Proceeds refers to any property derived from or obtained, directly or indirectly, through the commission of an offence. of a criminal activity Criminal activity refers to: (a) all criminal acts that would constitute a predicate offence for money laundering in the country; or (b) at a minimum to those offences that would constitute a predicate offence as required by Recommendation 3., or are related to terrorist financing Terrorist financing is the financing of terrorist acts, and of terrorists and terrorist organisations., it should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. be required, by law, to report promptly its suspicions to the financial intelligence unit (FIU).