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Compliance Officer Portal - AML Compliance
International Association of Risk and
Compliance Professionals (IARCP)
The
Financial Action Task Force (FATF)
is an inter-governmental body
whose purpose is the development and promotion of policies, both
at national and international levels, to combat money laundering
and terrorist financing.
The Task Force is therefore a
"policy-making body" which works to
generate the necessary political will
to bring about national legislative and regulatory reforms in
these areas.
Since its
creation the FATF has spearheaded the effort to adopt and
implement measures designed to counter the use of the financial
system by criminals.
It established a series of
Recommendations in 1990, revised in 1996 and in 2003 to ensure
that they remain up to date and relevant to the evolving threat
of money laundering, that set out the basic framework for
anti-money laundering efforts and are intended to be of
universal application.
The FATF
monitors members' progress in
implementing necessary measures, reviews money laundering and
terrorist financing techniques and counter-measures, and
promotes the adoption and implementation of appropriate measures
globally.
In
performing these activities, the FATF collaborates with other
international bodies involved in combating money laundering and
the financing of terrorism.
The FATF does not have a
tightly defined constitution or an unlimited life span. The Task
Force periodically reviews its mission. The FATF has been in
existence since 1989.
The current mandate of the FATF
(for 2004-2012) was subject to a mid-term review and was
approved and revised at a Ministerial meeting in April 2008. For
more information on the FATF’s role, please see the FATF's
standards.
The 40
Recommendations provide a
complete set of counter-measures against money laundering
(ML)covering the criminal justice system and law enforcement,
the financial system and its regulation, and international
co-operation.
They have been recognised, endorsed, or
adopted by many international bodies.
The
Recommendations are neither complex nor difficult, nor do they
compromise the freedom to engage in legitimate transactions or
threaten economic development. They set out the principles for
action and allow countries a measure of flexibility in
implementing these principles according to their particular
circumstances and constitutional frameworks.
Though not
a binding international convention, many countries in the world
have made a political commitment to combat money laundering by
implementing the 40 Recommendations.
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The 40 Recommendations
Introduction
Legal Systems
Scope of the criminal offence of
money laundering
(Recommendations: 1, 2)
Provisional
measures and confiscation
(Recommendation 3)
Measures
to be taken by Financial Institutions and Non-Financial
Businesses and Professions to prevent Money Laundering and
Terrorist Financing
Customer due diligence and record-keeping
(Recommendations: 4, 5, 6, 7, 8, 9, 10, 11, 12)
Reporting
of suspicious transactions and compliance
(Recommendations:
13, 14, 15, 16)
Other measures to deter money laundering
and terrorist financing
(Recommendations: 17, 18, 19, 20)
Measures to be taken with respect to countries that do not
or insufficiently comply with the FATF Recommendations
(Recommendations: 21, 22)
Regulation and supervision
(Recommendations: 23, 24, 25)
Institutional and other
measures necessary in systems for combating Money Laundering and
Terrorist Financing
Competent authorities, their powers and
resources
(Recommendations: 26, 27, 28, 29, 30, 31, 32)
Transparency of legal persons and arrangements
(Recommendations: 33, 34)
International Co-operation
(Recommendation 35)
Mutual legal assistance and
extradition
(Recommendations: 36, 37, 38, 39)
Other
forms of co-operation
(Recommendation 40)
Recommendation 1
Countries should criminalise money laundering on the basis of
United Nations Convention against Illicit Traffic in Narcotic
Drugs and Psychotropic Substances, 1988
(the Vienna Convention)
and United Nations Convention against Transnational Organized
Crime, 2000
(the Palermo
Convention).
Countries should apply the crime of money
laundering to all serious offences, with a view to including the
widest range of predicate offences.
Predicate offences
may be described by reference to all offences, or to a threshold
linked either to a category of serious offences or to the
penalty of imprisonment applicable to the predicate offence
(threshold approach), or to a list of predicate offences, or a
combination of these approaches.
Where countries apply a
threshold approach, predicate offences should at a minimum
comprise all offences that fall within the category of serious
offences under their national law or should include offences
which are punishable by a maximum penalty of more than one
year’s imprisonment or for those countries that have a minimum
threshold for offences in their legal system, predicate offences
should comprise all offences, which are punished by a minimum
penalty of more than six months imprisonment.
Whichever
approach is adopted,
each country should at a minimum include a
range of offences within each of the designated categories of
offences.
Predicate offences for money laundering should
extend to conduct that occurred in another country, which
constitutes an offence in that country, and which would have
constituted a predicate offence had it occurred domestically.
Countries may provide that the only prerequisite is that the
conduct would have constituted a predicate offence had it
occurred domestically.
Countries may provide that the
offence of money laundering does not apply to persons who
committed the predicate offence, where this is required by
fundamental principles of their domestic law.
Recommendation 2
Countries should ensure that:
a)
The intent and knowledge required to prove the offence of money
laundering is consistent with the standards set forth in the
Vienna and Palermo Conventions, including the concept that such
mental state may be inferred from objective factual
circumstances.
b) Criminal liability, and, where that is
not possible, civil or administrative liability, should apply to
legal persons.
This should not preclude parallel
criminal, civil or administrative proceedings with respect to
legal persons in countries in which such forms of liability are
available. Legal persons should be subject to effective,
proportionate and dissuasive sanctions. Such measures should be
without prejudice to the criminal liability of individuals.
Recommendation 3
Countries should adopt measures similar
to those set forth in the Vienna and Palermo Conventions,
including legislative measures, to enable their competent
authorities to confiscate property laundered, proceeds from
money laundering or predicate offences, instrumentalities used
in or intended for use in the commission of these offences, or
property of corresponding value, without prejudicing the rights
of bona fide third parties.
Such measures should include
the authority to:
(a) identify, trace and evaluate
property which is subject to confiscation;
(b) carry
out provisional measures, such as freezing and seizing, to
prevent any dealing, transfer or disposal of such property;
(c) take steps that will prevent or void actions that prejudice
the State’s ability to recover property that is subject to
confiscation; and
(d) take any appropriate
investigative measures.
Countries may consider adopting
measures that allow such proceeds or instrumentalities to be
confiscated without requiring a criminal conviction, or which
require an offender to demonstrate the lawful origin of the
property alleged to be liable to confiscation, to the extent
that such a requirement is consistent with the principles of
their domestic law.
To learn more:
www.fatf-gafi.org/document/28/0,3343,en_32250379_32236930_33658140_1_1_1_1,00.html
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