Mitigating the Unintended Consequences of the FATF Standards

In February 2021, the Financial Action Task Force (FATF) launched a new project to study and mitigate the unintended consequences resulting from the incorrect implementation of the FATF Standards.

The project focuses on four main areas:

  • De-risking, or the loss or limitation of access to financial services. This practice has affected non-profit organisations (NPOs), money value transfer service providers, and correspondent banking relationships, in particular;
  • Financial exclusion, a phenomenon whereby individuals are excluded from the formal financial system and denied access to basic financial services;
  • Undue targeting of NPOs through non-implementation of the FATF’s risk-based approach;
  • The curtailment of human rights (with a focus on due process and procedural rights) stemming from the misuse of the FATF Standards or AML/CFT assessment processes to enact, justify, or implement laws, which may violate rights such as due process or the right to a fair trial.

In June 2021, the FATF discussed these unintended consequences resulting from the misuse of the FATF’s Standards on preventing and combating money laundering and the financing of terrorism. The FATF will now build upon its existing work, and begin identifying possible further mitigation options.

The FATF appreciates the significant input received to inform this project. Contributions are welcome for the duration of the project, including on suggested mitigation options. Information may be sent to pscf@fatf-gafi.org

This is not an investigative endeavour, but an opportunity to study trends and propose solutions. Any information provided to the FATF Secretariat will be shared with the project team and the source will be identified. Depending on the volume of input, we may not be able to follow up on each suggestion for engagement, nor are we able to provide feedback about how, or if, information received is used. 

 

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