FATF Publishes Updated Standards Include Interpretative Note on Virtual Assets
On July 3, the Financial Action Task Force (FATF) published an updated version (dated June 2019) of its anti-money laundering (AML) and counter-terrorist financing (CTF) standards.
This version includes a recently adopted interpretative note to recommendation 15 (new technologies), in which the FATF explains how its standards apply to virtual asset activities and virtual asset service providers (VASPs).
Among other things, the FATF explains that countries should:
identify, assess and understand the money laundering and terrorist financing (ML/TF) risks emerging from virtual asset activities and the activities or operations of VASPs. Based on that assessment, countries should apply a risk-based approach to ensure that ML/TF prevention or mitigation measures are commensurate with the risks identified;
adopt and apply legal or regulatory measures to prevent criminals and their associates from controlling, being beneficial owners of or holding management functions in a VASP;
require VASPs to be licensed or registered and require them to identify, assess and take effective action to mitigate their ML/TF risks;
ensure that VASPs are subject to adequate regulation and supervision or monitoring for AML/CFT and are effectively implementing the relevant FATF recommendations, to mitigate ML/TF risks emerging from virtual assets. VASPs should be subject to effective systems for monitoring and ensuring compliance with national AML/CFT requirements; and
rapidly, constructively and effectively provide the widest possible range of international cooperation in relation to money laundering, predicate offences, and terrorist financing relating to virtual assets. In particular, supervisors of VASPs should exchange information promptly and constructively with their foreign counterparts, regardless of the supervisors’ nature or status and differences in the nomenclature or status of VASPs.
The FATF plans to monitor the implementation of these virtual asset standards by carrying out a review in June 2020.
The updated standards are available here.