Categorie
Uncategorized

FATF. Organised Environmental Crime: Dissecting the FATF Approach (RUSI)

In June 2020, the Financial Action Task Force (FATF) urged countries to increase the use of financial investigations into illegal wildlife trade cases.

A year on, in July 2021, it published a further analysis on mineral, waste and timber trafficking. In advance of the FATF’s upcoming October plenary, Tom Keatinge and Alexandria Reid take a deep dive into the thornier aspects of the FATF’s current approach to environmental crime.

Episode 22: Organised Environmental Crime: Dissecting the FATF Approach | Royal United Services Institute (rusi.org)

Categorie
Analysis

Financial Inclusion – FATF’s Impact on Financial Inclusion (Alanna Putze and Isabella Chase, Chatham House)

The Financial Action Task Force (FATF) has committed to promoting financial inclusion via the proportionate implementation of its standards. Yet, approximately 1.7 billion people globally have no access to a bank or mobile money account. Clearly, there is more work to be done.

CFCS’s Isabella Chase joins Alanna Putze to discuss the impact of FATF on digital financial inclusion and the steps that it can take to promote broader access to finance, while maintaining global financial crime controls.

Episode 17: FATF’s Impact on Financial Inclusion | Royal United Services Institute (rusi.org)

Categorie
Analysis

FATF – Assessing the Financial Action Task Force’s Impact on Digital Financial Inclusion (Isabella Chase, Jonathan van der Valk and Tom Keatinge, RUSI)

Download the Paper (PDF)

This paper finds that the FATF framework has several effects on digital financial inclusion and financial inclusion more generally. Occurring at different stages of the FATF process, they can be summarised as follows: 

  • The FATF Standards. The FATF Standards afford the necessary provisions and flexibility to support financial inclusion. However, this paper finds that despite the requisite tools being in place, there are insufficient incentives within the framework to ensure they are implemented in a way that supports inclusion. When entities do take advantage of these tools, the impact is impeded by limited guidance on how to implement them. 
  • The Mutual Evaluation Report (MER) process. In theory, much like the FATF Standards, the MER process should not adversely impact financial inclusion. In practice, while the process has not directly harmed inclusion, it has indirectly inhibited it by failing to bolster the narrative that financial inclusion and the robust implementation of financial crime controls are mutually beneficial. Inconsistent treatment of financial inclusion in the MER process is worsened by the limited training assessors receive on the subject. 
  • FATF listing procedures. This paper supports previous studies that have found FATF listings have several impacts on financial inclusion. It upholds findings that the FATF impacts correspondent banking relationships, but also points to the significant repercussions for listed countries on national policymakers, the investment climate and remittances. It contends that better data is needed to validate these impacts. 
  • The FATF governance structure. The role that the FATF presidency and wider governance structure plays in positioning financial inclusion within the FATF framework is often overlooked. The president, FATF and FSRB secretariats and other associated international bodies, such as the World Bank, play a vital role in setting the tone for how the FATF framework should be complied with. They must do more to ensure that all stakeholders understand that proper implementation of the FATF framework benefits financial inclusion and, as a result, a country’s financial integrity. 

In sum, this paper finds that the FATF framework could be used to better support financial inclusion. However, without appropriate recognition, committed action and proper incentives to do so, financial inclusion will continue to be overlooked. 

Categorie
Analysis

FATF – Walk the Talk: How the Financial Action Task Force Can Prioritise Financial Inclusion (Isabella Chase and Tom Keatinge, RUSI)

ATMs

Download the Report (PDF)

The FATF has committed to promoting financial inclusion via the proportionate implementation of its standards. The recent launch of a FATF project on unintended consequences, which includes a focus on financial exclusion, underlines that this commitment still requires attention. To date, beyond references to financial inclusion in the FATF Standards, methodology, guidance documents (on financial inclusion and related topics such as digital ID) and speeches, little concrete work has been done by the FATF to actively promote financial inclusion as part of its primary integrity man date. 

This Policy Brief sets out five recommendations for how the FATF could refocus its framework so that it not only achieves its primary objective of effectively tackling financial crime but also actively promotes financial inclusion. Based on extensive research focused on three case study countries (see Appendix II for country profiles), a review of the existing literature and interviews with key stakeholders, the recommendations are as follows: 

  1. Update FATF Recommendations 1, 2 and 10 to better promote compliance practices that enable financial inclusion. 
  2. Update the FATF methodology to incorporate a recognition of financial inclusion as contributing to the effectiveness of a country’s anti-money-laundering and counterterrorist-financing regime. 
  3. Strengthen FATF assessor training on financial inclusion. 
  4. Measure the impact on financial inclusion of the International Cooperation Review Group process. 
  5. ‘Walk the talk’ – ensure all stakeholders understand that promoting financial inclusion is key to the successful implementation of the FATF framework. 

The FATF should address these recommendations by devising its own financial inclusion strategy that creates a roadmap for how it, along with the outcomes from its unintended consequences project, will be introduced and sustained over time.