9th April 2021

From time to time, European and international bodies active in Anti-Money Laundering and Countering the Funding of Terrorism (AML/CFT) undertake initiatives that may be of interest to subject persons and to other interested parties, including the issue of documents and/or conduct consultation processes.  Given that any such initiative may eventually influence how subject persons are expected to adhere to their AML/CFT obligations, the Financial Intelligence Analysis Unit (FIAU) deems it in the subject persons’ own interest to, as a minimum, acquaint themselves with the said documents and participate in any on-going consultation process.

This news item is intended to provide readers with information on three initiatives that have recently been taken by the Financial Action Task Force and the European Banking Authority.  Should any interested parties have any feedback, these should be addressed directly to the institution concerned as outlined hereunder. These are:

Financial Action Task Force (FATF)

1. Project on Mitigating the Unintended Consequences of the FATF Standards

In February 2021, the FATF launched a new project aimed to identify and mitigate the unintended consequences arising from the application of the FATF Standards.  Special focus is expected on four key areas, these being de-risking, financial exclusion, effects on non-profit or voluntary organisations and possible impact on fundamental human rights.  Research on these areas constitutes Phase One of the project, with the FATF inviting interested parties to provide their input as part of the said Phase One. 

More information on this project and on how to contribute to the same may be accessed by clicking here.

While the FATF has not set a hard and fast deadline for submission, it has indicated that any input should reach the Project Team by not later than 20 April 2021.

2. Consultation on FATF Draft Guidance on a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers

On 19 March 2021, the FATF published a draft of its revised guidance document on a Risk-Based Approach to Virtual Assets and Virtual Asset Service Providers.  Changes are being proposed in a number of areas, including clarifying how the definitions of Virtual Assets (VAs) and Virtual Asset Service Provider (VASP) are to be applied. More guidance is also being provided on how the FATF Standards apply to stablecoins, on the risks and potential risk mitigants for peer-to-peer transactions, and on the implementation of the ‘travel rule’ for the public sector as well as the private sector. Furthermore, updated guidance is being provided on the licensing and registration of VASPs, and on the Principles of Information-Sharing and Co-operation Amongst VASP Supervisors.

More information on the consultation process, including a copy of the document itself, and how feedback may be submitted, can be accessed via the following webpage.

The deadline for submission of comments or feedback is 20 April 2021.

European Banking Authority (EBA)

3. Consultation on the Revision of the Guidelines on Risk-Based Supervision

On 17 March 2021, the EBA issued a Consultation Paper on changes to its Guidelines on Risk-Based Supervision of credit and financial institutions’ compliance with AML/CFT obligations. The proposed changes address the key obstacles to effective AML/CFT supervision that the EBA has identified during its review of the existing Guidelines, including the effective use of different supervisory tools to meet the supervisory objectives. 

More information on the consultation process, including a copy of the Consultation Paper itself, and how to provide feedback on the proposed changes to the Guidelines can be accessed on this webpage.

The consultation runs until 17 June 2021.