UNIT 2 - The International Bodies and Standard Setters Flashcards
Explain the work and objectives of the Financial Action Task Force (FATF).
FATF’s main role is to develop international standards and to develop and promote an improved international awareness of AML and CFT policies at both national and international levels. FATF examines, evaluates and disseminates prevention techniques in support of its objectives.
The objectives are to set global standards and promote effective implementation of legal, regulatory and operational measures for combating ML, TF and other related threats to the integrity of the international financial system.
List at least four international groups, bodies or agreements that have been instrumental in countering the threat of international money laundering and the financing of terrorism and proliferation.
- FATF
- Wolfsberg
- Transparency International
- United Nations Office on Drugs and Crime
- United Nations Conventions including: the Vienna Convention; Palermo Convention; the Terrorist Financing Convention; and the Convention Against Corruption
- Basel Committee on Banking Supervision
- Egmont Group
- World Bank
- International Monetary Fund
What action can be taken by the FATF against a country designated as being ‘high risk’ or ‘non-cooperative’ and that has material deficiencies in its AML/CFT Framework?
A country designated as a jurisdiction with material deficiencies can be ’encouraged‘ to draw up a programme to rectify the deficiencies, work with FATF or the relevant FATF-style regional body and to provide regular reports on progress to implement these improvements.
The FATF also advises that firms should be required to apply counter measures ‘to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/FT) risks emanating from the jurisdictions’. This means that firms must apply a risk-based approach and conduct enhanced due diligence when dealing with countries with strategic deficiencies that are identified by FATF.
What is the role of Transparency International (TI)?
Transparency International is an NGO whose primary objective is to monitor and report upon international bribery and corruption issues. TI publishes reports that can be used by firms in their risk assessments concerning bribery and corruption. These reports include:
- The Corruption Perception Index (CPI)
- The Bribe-Payers Index (BPI)
- The Global Corruption Barometer Index
TI also issues reports and publications on corruption issues relating to specific jurisdictions, industries and sectors that have no legally binding authority but which are widely recognised as being sufficiently reliable to be used by firms in their risk based approach to assessing crime risks.
What is a Mutual Evaluation Report (MER)?
A MER is a structured review of the effectiveness of the AML/CFT regime in a country or territory performed according to an agreed methodology for carrying out the evaluations which was updated by FATF in 2014.
These evaluations are carried out by individuals appointed as representatives of other FATF members, or by the FATF Regional Style Bodies (FSRBs), or may be performed by bodies such as the IMF.
The FATF is currently conducting the Fourth Round of MER according to an agreed timetable that will ensure that all members are visited by the end of 2021. The first visit reports were published during 2015 and will continue to be released once that have been approved at the regular FATF Plenary meetings.
What is the objective and role of the International Monetary Fund (IMF)?
- To promote economic stability by enhancing international monetary cooperation and exchange stability.
- Provide support to the international efforts to combat ML and TF.
- Provide technical assistance to many countries to enable AML/CFT frameworks to be developed.
What was launched in April 2009 by the IMF?
A donor supported trust fund to finance its AML/CFT technical assistance programme (now referred to Thematic Funds)
When was the United Nations Global Programme against Money Laundering (GPML) established and what does it do to UN member states?
Established 1997 and part of the United Nations Office on Drugs and Crime (UNODC).
Helps member states to:
- introduce legislation against ML
- develop/maintain strategies to combat ML
- encourage AML policy development
- raise public awareness about ML
It has developed model laws for both common law and civil law legal systems.
Name some of the UN conventions that deal with ML and TF.
- UN Convention against Trafficking in Narcotics and Psychotropic Substances (Vienna convention).
- UN Convention against Transnational Organised Crime (Palermo).
- convention against corruption (UNCAC)
- convention for the Suppression of the Financing of Terrorism.
What is the role and objectives of UNODC in the prevention of terrorism?
UNODC’s operational activities focus on strengthening the legal regime against terrorism. It provides legislative assistance that enables countries to become parties to the universal anti-terrorism conventions.
It’s aim is to assist member states in their struggles against illicit drugs, crime and terrorism.
Main objectives:
- provide field-based technical cooperation projects
- conduct research and analytical work to increase knowledge and understanding
- work to assist states in the ratification and implementation of the relevant international treaties.
Who does The World Bank work in collaboration with?
- IMF
- FATF
- FATF-style regional bodies (FSRB)
- G20 countries
- UNODC
- OECD
When was the FATF Recommendations last implemented?
February 2012
Why are the principles in the FATF Recommendations unique?
Because they apply to all key stakeholders engaged in combating ML, inluding regulators, law enforcement agencies, regulated firms and lawmakers.
How many members does FATF have?
39 members - 37 jurisdictions and 2 regional organisations (Gulf Cooperation Council and European Commission).
Name some of the FATF-Style Regional Bodies
- Asia/Pacific Group on ML (APG)
- Caribbean FATF (CFATF)
- Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL)
- Eurasian Group (EAG)
- FATF of Latin America (GAFILAT)
- Task Force on ML in Central Africa (GABAC)
