**New Regulatory Approaches**
In Paris today, at the conclusion of its latest Plenary, the Financial Action Task Force (FATF) reported that it is examining new regulatory approaches to stem the flow of funds to terrorists.
FATF President Claes Norgren said *”As an international body with a wide membership but a focused mandate, the FATF is in a uniquely strong position to overcome the myriad differences in financial systems to make it harder for terrorists and criminals to smuggle their cash.”* He continued, *”We can help stop this flow of illegal funds.”*
The FATF has issued an Interpretative Note to Special Recommendation II which clarifies the obligations of countries to criminalise the offence of terrorist financing. This guidance outlines countries’ obligations pursuant to the United Nations 1999 International Convention for the Suppression of the Financing of Terrorism.
The Plenary welcomed a decision by the Executive Boards of the IMF and World Bank to endorse a common methodology that the three groups will together use when they assess anti-money laundering and counter-terrorist financing compliance.
*”Since February, the FATF has worked closely with the IMF, World Bank, FATF-style regional bodies and others, to ensure a common and consistent approach to the evaluation of a country’s AML/CFT regimes,”* President Norgren said. Later this year, the FATF anticipates the launch of a new round of evaluations using this new joint methodology with the IMF and World Bank to assess compliance with FATF’s Revised Forty Recommendations.
**Non-Cooperative Countries and Territories**
The FATF continues to use the NCCT list to demand that financial institutions give greater scrutiny to transactions with persons, businesses, or banks in listed countries or territories with inadequate anti-money laundering and counter-terrorist financing infrastructure. Announced today was the removal of Guatemala from the FATF NCCT list. The countries remaining as designated NCCTs are Cook Islands, Indonesia, Myanmar, Nauru, Nigeria and Philippines — only six of the 23 jurisdictions designated as NCCTs in 2000 and 2001.
*”The NCCT process has been very successful in encouraging countries to take necessary action to clean up their financial systems,”* said Mr. Norgren at the Group’s Plenary meeting in Paris.
No new jurisdictions have been reviewed since 2001. The FATF, however, continues to monitor progress as a priority item at each Plenary meeting.
In its Annual Report for 2003-2004, presented at the Plenary, the FATF included summaries of the mutual evaluations reports of Mexico, Argentina, Brazil and Saudi Arabia. The task force had been evaluating the anti-money laundering (AML) and counter-terrorist financing (CFT) systems of these countries with relation to compliance under Recommendation I, and the Report also includes an overview of the progress recently made by Mexico.
The Annual Report and Annexes (both with rights reserved) can be reviewed on the FATF’s web site.
Topics covered include:
. Review of the Future of FATF
. Countering the Financing of Terrorism
. Implementation of the FATF Recommendations and Standards
. Creating a Global Network to Combat Money Laundering and Terrorist Financing
. Trends and Techniques in Money Laundering and Terrorist Financing
The report concludes that further significant progress was made in the fight against money laundering and terrorist financing, both within and outside the FATF membership, during the last year; however, there is continuing need for action and in this context it was decided that the Task Force should continue its work for a further eight years. Under its new mandate, FATF will continue to mobilise the international community in an ever deeper and more expansive effort to fight money laundering and the financing of terrorism.
As its fifteenth year comes to a close, it is now critical for the Task Force to look forward to the task of monitoring more closely the implementation of AML/CFT measures among FATF members through a third round of mutual evaluations. These are expected to start in 2004-2005, under the Presidency of France.