Washington, DC — The Financial Action Task Force (FATF) concluded its first plenary under the Singaporean presidency. Myanmar, which had been on the grey list for the past two and a half years, was moved to the blacklist. “This is for failing to address a large number of strategic deficiencies in its anti-money laundering and counter-terrorist financing systems. These were first identified in a report in September 2018. More than four years later, many of those issues remain,” said FATF President Mr. T. Raja Kumar. FATF called on countries to apply due diligence to business relations and transactions in relation to Myanmar but appealed that this enhanced due diligence should not negatively impact humanitarian assistance. “Countries must ensure that there are no blanket measures that disrupt the flow of humanitarian funds or remittances or funding for legitimate and pure activity,” said Kumar. He urged the authorities in Myanmar to swiftly complete the targeted action plan to address the strategic deficiencies identified in their country.
Kumar noted that the FATF was aware of calls by Ukraine to blacklist Russia. “We have at this specific plenary taken significant measures which de facto sidelines Russia as a member of the FATF,” said Kumar. “The FATF, as you know, is a technical inter-government body that is governed by agreed rules. It takes its decisions based on consensus among its 39 members who represent different geographical areas,” he said. Kumar added that discussions at plenary are private, so he is not at liberty to disclose them, but reiterated that Russia’s position at the FATF had been severely restricted as a result of this aggression in Ukraine. It is now essentially sidelined at the FATF.
Pakistan was formally removed from the grey list. The FATF team conducted onsite visits in Pakistan in August, “verifying that there is a high-level commitment on the part of the Pakistani leadership politically, as well as sustainability of Pakistan’s reforms and very importantly, the commitment to continue to make improvements in the future. These reforms are good for the stability and security of the country and, indeed, the region. That doesn’t mean that there isn’t more work to do. Moving forward, Pakistan will need to work with the regional partner, the Asia-Pacific group, to continue to strengthen its systems,” said Kumar. He said that as a result of these action plans, Pakistan had made significant improvements to strengthen the effectiveness of its framework for combating terrorism financing. “Steps have also been taken to strengthen risk-based supervision of both financial and non-financial institutions, improve asset confiscation outcomes, and investigate and prosecute money laundering.”
The FATF agreed to seek public input on draft guidance for implementing the FATF standard on beneficial ownership transparency for legal persons; adopted a U.S.-led report on money laundering related to the illicit trafficking of synthetic opioids, including fentanyl; and commenced work on several projects designed to strengthen global efforts to combat corruption.
The Plenary formally agreed to undertake three projects to enhance global anti-corruption efforts. First, the FATF will assess illicit finance risks and responses to criminal actors’ misuse of Citizenship by Investment and Residency by Investment schemes, often known as “golden passports,” to hide their activities through new identity documents. Second, through FATF mutual evaluations, the FATF will enhance assessments of countries’ efforts to implement the United Nations Convention on Corruption, the key international legal convention for national anti-corruption legal frameworks. Third, the FATF will evaluate members’ compliance with the FATF Recommendations related to non-financial gatekeepers and professionals whose expertise and access can enable corruption. This work will complement ongoing US and multilateral enforcement, regulatory, and information-sharing efforts to prevent corrupt officials and elites from undermining democracy, the rule of law, and economic development by improving countries’ anti-money laundering and countering the financing of terrorism (AML/CFT) systems in this area.