First Post in a Two-Post Series on Recent FATF Activity
Members presumably working from home, the Financial Action Task Force (“FATF”) was active last week, first issuing its 3rd Enhanced Follow-up Report & Technical Compliance Re-Rating of the United States’s Anti-Money Laundering (“AML”) and Counter-Terrorist Financing (“CTF”) (the “United States Report”) measures and, later, a statement from its President on COVID-19 and measures to combat illicit financing (the “Statement”).
In this post, we will discuss FATF’s Statement on the Coronavirus. In our next post, we will address FATF’s United States Report.
The Statement, issued on April 1, 2020, functions as both a high-level reminder to financial institutions of methods for continuing to carry-out know-your-customer (“KYC”) and other AML obligations while “facing confinement or strict social-distancing measures” and a warning to financial institutions to remain vigilant to increases in fraudulent activity – and resulting money laundering – so often associated with crises like the current Coronavirus pandemic.
The thrust of the Statement is an acknowledgement that the Coronavirus pandemic has created a perfect storm for money laundering where rapid and high-volume financial transactions from myriad sources for myriad purposes are occurring simultaneously with the almost spontaneous and enormous downsizing in personnel to monitor those transactions as many AML professionals shelter from home. Indeed, we recently blogged on this very threat posed by COVID-19 to financial institutions’ AML and anti-fraud systems (that is, the combination of increased fraud and a reduced capacity to guard against it) when discussing FinCEN’s latest pronouncement on COVID-19 issues.
Continue Reading Financial Action Task Force Update: Statement on COVID-19’s Implications for AML Programs