June FATF Plenary: Outcomes of the Meeting

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SCORECHAIN

Date: July 1st 2021

Published on: Global News, Regulation

Tags:

AML, bitcoin, crypto AML, Cryptocompliance, Cryptoregulation, DigitalAssets, FATF, Plenary, Risk-based approach, scorechain,

June FATF Plenary: Outcomes of the Meeting

Key takeaways:

  • FATF plenary took place from June 21 to 25.
  • The report on the 12-month review of FATF’s revised standards for VAs and VASPs will be published on July 5.
  • The finalization of FATF’s revised Guidance on VAs and VASPs is pushed back to October 2021.

FATF plenary meetings took place virtually from June 21 to 25 and gathered delegates from 205 members of the Global Network and observers organizations such as the International Monetary Fund (IMF) or the United Nations (UN)1. The outcomes of the meetings2 have been published on June 25, at the end of the plenary meeting.

During the meetings, the discussion will focus, amongst others, on the review of the implementation of revised FATF Standards for virtual assets (VAs) and virtual asset service providers (VASPs).

FATF Plenary outcomes are available here.

Second 12-month review of FATF’s revised standards for VAs and VASPs

During the meetings, the Plenary worked on and finalized the second 12-month review of FATF’s revised standards for VAs and VASPs report.

The report assesses the progress made by jurisdictions when implementing the revised standards from 20193. FATF reports that 58 out of 128 reporting jurisdictions have successfully implemented the standards:

  • 52 of them by regulating VASPs; and
  • 6 by prohibiting VASP operations.

FATF also recognized the work done by the private sector on developing solutions to implement the “travel rule” even though a lot of jurisdictions have failed to implement FATF’s requirements including the travel rule.

FATF emphasizes that these gaps in regulations show that there are no global standards yet when it comes to preventing ML and TF through VASPs. FATF reports also emphasized the need for jurisdictions to implement these standards promptly.

The full report on the 2nd review of the implementation of FATF’s revised standards on VAs and VASPs will be published on July 5.

The finalization of FATF’s revised Guidance on VAs and VASPs is pushed back to October 2021 and is aimed at guiding jurisdictions and the private sector to implement the revised standards.

Opportunities and challenges of new technologies for AML/CFT

The FATF will also publish a report on how new technologies can improve AML/CFT measures. The international financial watchdog explains that new technologies can help financial institutions to better assess risks and reinforce the effectiveness of AML/CFT measures.

FATF’s report identifies developing and existing solutions and emphasizes how to successfully use them to improve AML/CFT and what could hinder proper implementation.

This report will be published on July 1st.

Jurisdictions under increased monitoring

The Plenary also added 4 countries to the list4 of jurisdictions under increased monitoring often called the “grey list”. These four additional countries are:

  • Haiti;
  • Malta;
  • The Philippines; and
  • South Sudan

Those jurisdictions are working to address deficiencies in their AML/CFT regimes together with FATF. The listed jurisdictions are committed to resolving these deficiencies in a given timeframe and are thus subject to increased monitoring from FATF. On the contrary, Ghana is no longer on the list as the jurisdiction has been able to address the AML/CFT deficiencies identified by the watchdog.

Meanwhile, the FATF’s call for action since February 2020 on high-risk jurisdictions, such as Iran and the Democratic People’s Republic of Korea’s AML/CFT regimes remains in effect.

Following closely the evolving regulations, Scorechain is continuously improving its products to help customers to fulfil regulatory requirements and to facilitate their compliance team’s work of monitoring crypto-assets and mitigating the related risks.

You are a crypto-related business and need to implement Scorechain solution to follow FATF recommendations? Contact us for a free demo: contact@scorechain.com

About Scorechain

Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance since 2015, the Luxembourgish company serves more than 100 customers worldwide in 36 countries, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets customers onboarding, audit and law firms and some LEAs.

Scorechain solution supports Bitcoin analytics with Lightning Network detection, Ethereum analytics with all ERC20 tokens and stablecoins, Litecoin, Bitcoin Cash, Dash, XRP Ledger and Tezos. The software can de-anonymize the Blockchain data and connect with sanction lists to provide a risk scoring on digital assets transactions, addresses and entities. The risk assessment methodology applied by Scorechain has been verified and can be fully customizable to fit all jurisdictions. 300+ risk-AML scenarios are provided to its customers with a wide range of risk indicators so businesses under the scope of the crypto regulation can report suspicious activity to authorities with enhanced due diligence.


References:

  1. https://www.fatf-gafi.org/publications/fatfgeneral/documents/plenary-june-2021.html
  2. https://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-fatf-plenary-june-2021.html
  3. http://www.fatf-gafi.org/publications/fatfrecommendations/documents/guidance-rba-virtual-assets.html
  4. https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-june-2021.html