What is FATF?
It is a global AML/CFT/CPF standard setter.
What is FATF’s objective?
To protect financial system and broader economy from the threats of ML/TF/PF
What are FATF’s 4 functions?
- Develop international standards.
- Monitor member compliance with standards (using ME).
- Identify & Engage countries with deficiencies.
- Ensure clear understanding of standards
What are FATF’s 4 functions?
- Develop international standards.
- Monitor member compliance with standards (using ME).
- Identify & Engage countries with deficiencies.
- Ensure clear understanding of standards
Who makes up The Global Network?
- The FATF
- 9 FSRBs
Name 3 closest to NZ FSRBs
- Asia Pacific Group (APG)
- Eurasian Group (EAG)
- Financial Action Task Force of Latin America (GAFILAT)
Define Money Laundering
The process of hiding the illicit origin of proceeds of crime.
Define Terrorist Financing
It’s financing of terrorists, terrorist acts and terrorist organisations
Define prolifiration financing
It refers to breach, non-implementation or evasion of the targeted financial sanction obligations referred to in Recommendation 7
What are 3 actions in Money Laundering?
- Transfer/convert property which is KTBIO (OR) conceal/disguise its origin (OR) help a person to evade consequences
- Conceal/disguise True Nature, Source, Disposition, Movement or ownership of known illegal property.
- Acquiring, Possessing or Using illegal property, while knowing at the time of the receipt that it was illegal.
How many FATF Recommendations are there, and how many categories?
There are 40 recommendations, which are split into 7 categories
What are FATF Recommendations?
These are comprehensive framework measures that countries should implement to tackle ML/TF/PF
What is Category 1 on AML/CFT Policies and Coordination about (recommendations 1 & 2)?
- Countries should assess their ML/TF risks.
- Cooperate and coordinate risk-based approach to mitigate.
What is Category 2 on ML and Confiscation (regulation 3-4)?
- Countries must criminalise ML.
- Enable law enforcement to freeze/seize and confiscate property derived/intended for use in TF or other crimes.
What is Category 3 on TF and PF (regulation 5-8)?
- Countries must criminalise TF
- Impose targeted sanctions on individuals/entities to comply with UN resolution
What is Category 4 on Preventative Measures (recommendations 9-23)?
- Countries should ensure that the private sector takes measures to prevent criminals from misusing the financial system or gatekeepers.
What is Category 5 on Transparency and Beneficial Ownership Arrangements (recommendations 24-25)?
- Countries must prevent legal entities/arrangements from being misused.
- Authorities must have access to info on owners and key personal.
What is Category 6 on Powers and Responsibility of Competent Authorities (recommendations 26-35)?
- To combat financial crimes, countries must empower competent authorities.
- Establish FIU to receive/analyse STR
What is Category 7 on International Cooperation (recommendations 36 - 40)?
- Countries should collaborate in fight against ML/TF/PF by sharing info and legal assistance.
What does effectiveness mean?
How well a country’s AML/CFT/CPF regime mitigate financial risks and threats.
How does FATF assess the effectiveness of country’s AML/CFT/CPF?
It’s measure based on a hierarchy of defined outcomes (11 immediate outcomes.
This is done to see in detail how component parts operate.
