Since February the Financial Action Task Force (FATF) has adopted 40 new recommendations. The aim of this review is to update and strengthen the framework of recommendations in response to the new dangers that threaten the international financial system.
The FATF standards are designed to be implemented by the 36 member countries (including Switzerland and Luxembourg). They also concern more than 180 countries through the network of regional bodies affiliated to the Task Force. Among these is the Moneyval committee of the Council of Europe of which Monaco has been a member since 2004.
The review process
This is the fourth revision since the publication of the first 40 recommendations for the fight against money-laundering in 1990, to which were added nine specific recommendation concerning terrorist financing after the events of 11 September 2001. The review process, begun in June 2009, is the fruit of almost three years of consultations. As well as the FATF member countries, it has involved FATF-type regional bodies and a large number of experts from the private sector and civil society.
The principal changes
FATF’s intention, as originally declared, was to undertake a limited, targeted review so as to maintain the stability of the standards for the fight against money-laundering while at the same time correcting some inadequacies or omissions; no real conceptual revolution is involved. The first significant novelty is a formal one, since the 40+9 recommendations have been reduced to just 40. The new numbering has not reduced the volume of content; it corresponds, rather, to a significant effort to summarize, update, reorganize and simplify the former standards by regrouping them into a unified, consolidated whole. The second important novelty is the integration of the fight against the financing of the proliferation of weapons of mass destruction into the “target standards” by systematic application of financial sanctions when they are imposed by the UN Security Council. Among the “key” measures, States are encouraged to take into account the specific nature of the particular risks with which their country is faced. They should adapt their legal, judiciary and administrative systems to the nature of the risks identified, with the aim of optimizing national resources and also of better managing these risks and minimizing their consequences. The new standards recommend extending the scope of offences that precede money-laundering. They will in future include the most serious criminal offences in the tax field, while leaving the precise definition of this type of infringement to the discretion of each State. Stress is also laid on the need to strengthen the resources available to prosecuting authorities and financial intelligence units so as to facilitate international cooperation. Finally a certain number of measures in favour of transparency are clarified; in particular this concerns the notion of the holder of the economic rights of moral entities, or security measures for politically exposed persons, a category that now also comprises “national” political personalities.
Future consequences
The purpose of the new FATF recommendations is to create a shared foundation for work in the framework of joint evaluations of national systems for the fight against money-laundering, terrorist financing and the proliferation of weapons of mass destruction. This also concerns the members of Moneyval and the other FATF-type regional organizations. The Monegasque authorities have already launched a study to determine whether existing legislation, until now recognized by Moneyval as being globally compliant, may or may not require possible modification.
