July 2022 Foodman Website and JD Supra
FATF key actions GAFI Acciones Claves

The Financial Action Task Force (FATF) is an independent inter-governmental entity that develops policies for protection of our global financial system from money laundering, terrorist financing and financing of weapons of mass destruction.  It is considered to be the global money laundering and terrorist financing “watchdog” and more than 200 countries and jurisdictions are committed to following the FATF Recommendations/Standards.  Its Recommendations (a total of 40) are considered to be a gold “Standard” for AML and Crime Terrorist Financing (CTF).

Professional Service Providers (PSPs) – Lawyers, Bankers, Brokers, Realtors, Casino Managers, Trust Fund Managers, Money Managers, etc., – are known as “gatekeepers”, as they all carry a level of responsibility and share financial intelligence according to the FATF.  The FATF 2022 Strategic Initiatives were presented in the Outcomes of the FATF Plenary, held in Berlin in June 2022 focusing on combating money laundering and terrorist financing by sharing information, recovering criminal assets, ransomware attacks, non-profit organization abuse, corruption, misuse of citizenship and residency by investment schemes, virtual assets, beneficial ownership and real estate.

Further FATF 2022 Strategic Initiatives include Reports coming later in 2022:

  • Information Sharing and Data Protection

This initiative addresses how a financial institution sees only one side of a financial transaction; creating an information gap that is that is exploited by criminal groups, corrupt officials, terrorist organizations, weapons proliferators, drug, and human traffickers to use and move illicit funds.  The goal is to bring data together and share initiatives that can assist financial institutions  with understanding the full picture to assess and mitigate money laundering and terrorist financing risks without triggering data protection and privacy concerns.  The FATF will publish a report in July 2022 that will address how members of the FATF, and its Global Network have increased private sector information sharing while meeting domestic data protection and privacy objectives and obligations.

  • Risk-based Approach Guidance for Real Estate Agents

The FATF finalized guidance for real estate agents that aims to help those involved in the real estate sector with implementing risk-based measures to prevent money laundering and terrorist financing.  The FATF will publish a report in July 2022 that will assist real estate private sector participants to develop a better understanding of their ML/TF risks and take effective measures to mitigate the risks.

The Plenary discussed a targeted update on implementation of the FATF Standards to prevent the misuse of virtual assets and virtual asset service providers for money laundering, and the financing of terrorism and proliferation. The report focuses in particular on the implementation of the FATF’s Travel Rule, which requires virtual asset service providers to collect or send information on the identities of the originators and beneficiaries of virtual asset transfers.  The updated report will be published at the end of June 2022.

  • Improving access to Beneficial Ownership Information

In March 2022, the FATF agreed on tougher global beneficial ownership rules to stop criminals from laundering their dirty money or hiding illegal activities through complex corporate structures or legal persons. This includes the requirement to ensure beneficial ownership information is held by a registry or alternative mechanism, which is as efficient as a registry. The FATF discussed progress in developing a guidance that aims to help countries implement the revised requirements of the FATF and finalize guidance by October 2022.

  • Strengthening the FATF Standard on Beneficial Ownership Information for trusts and other legal arrangements

The FATF is considering amendments to strengthen Recommendation 25, (Recommendation 25 applies broadly to “legal arrangements” meaning express trusts or other similar arrangements, including fiducie, treuhand and fideicomiso”.  The FATF is releasing a white paper for public consultation. Deadline for comments is 8/1/22.

  • Implementing the Strategic vision to strengthen the Global Network

The FATF approved a set of actions to implement the March 2022 Strategic vision for the Global Network of 206 jurisdictions who have jointly agreed to strengthen their regimes to tackle money laundering, terrorist, and proliferation financing.