WASHINGTON – Today the Financial Action Task Force (FATF) concluded its first plenary of the Singaporean presidency. The FATF—the international anti-money laundering and countering the financing of terrorism (AML/CFT) standard-setting body—made several key advances. It agreed to seek public input on draft guidance for implementing the FATF standard on beneficial ownership transparency for legal persons; adopted a U.S.-led report on money laundering related to the illicit trafficking of synthetic opioids, including fentanyl; and commenced work on several projects designed to strengthen global efforts to combat corruption. The FATF also agreed to additional restrictions on the membership rights of the Russian Federation due to its brutal war against Ukraine.
“Building on the unprecedented censure of Russia by the FATF in June, today the FATF again condemned the Russian war against Ukraine and took further steps to restrict Russia’s membership privileges, including curtailing its ability to engage in FATF’s work and banning it from participating in regional groups as a FATF member,” said Secretary of the Treasury Janet L. Yellen. “The FATF has also taken vital steps to combat corruption, strengthen recovery of assets stolen by corrupt officials and other illicit actors, and improve beneficial ownership transparency. These efforts, along with Treasury’s new rule curtailing the power of anonymous shell companies, will allow the United States and its allies to more effectively protect the international financial system from the corrosive effects of corruption and illicit finance. Finally, the FATF’s new work assessing the financial flows of drug traffickers will help the international community fight the global fentanyl and synthetic opioid epidemic.”
Beneficial Ownership Transparency
FATF members agreed to a full public consultation for draft guidance on Recommendation 24, which concerns beneficial ownership transparency for legal persons. This follows more targeted engagement by the FATF on the draft guidance, and it will help ensure that the final guidance is clear and comprehensive and assists countries in effectively implementing Recommendation 24. The Plenary also agreed to submit for public consultation draft amendments to Recommendation 25, which would aim to enhance beneficial ownership transparency for trusts and similar legal arrangements. These efforts seek to improve the ability of law enforcement to trace, report, and seize illicit proceeds, and to make it harder for criminals and others to exploit opaque legal structures such as shell companies to hide and launder the proceeds of their crimes.
The Plenary formally agreed to undertake three projects that will enhance global anticorruption efforts. First, the FATF will assess illicit finance risks and responses to criminal actors’ misuse of Citizenship by Investment and Residency by Investment schemes, often known as “golden passports”, to hide their activities through new identity documents. Second, the FATF will enhance assessments of countries’ efforts to implement the United Nations Convention on Corruption, the key international legal convention for national anti-corruption legal frameworks, through FATF mutual evaluations. Third, the FATF will evaluate members’ compliance with the FATF Recommendations related to nonfinancial gatekeepers and professionals, whose professional expertise and access can enable corruption. This work will complement ongoing U.S. and multilateral enforcement, regulatory, and information-sharing efforts to prevent corrupt officials and elites from undermining democracy, the rule of law, and economic development by improving countries’ AML/CFT systems in this area.
Reports on Illicit Finance Risks and Trends
The FATF adopted a report on money laundering associated with the financing of the illicit trafficking of fentanyl and other synthetic opioids around the world. This is the first FATF report on illicit finance associated with the global drug market since 2014, and it comes at a time when transnational criminal organizations trafficking synthetic opioids, most notably fentanyl, have fueled drug overdoses across the United States, taking one American life approximately every five minutes. The report, which was co-led by the United States and Canada, provides information and best practices so that law enforcement and financial investigators around the world can expand their work on complex, cross-border money laundering investigations involving the proceeds of drug trafficking.
The FATF is also working to finalize a report on money laundering and terrorist financing risks related to the trade in high-value arts, antiquities, and cultural objects. This report is co-led by the United States and the European Commission. The FATF expects to adopt the final report and publish it in December 2022.