Consolidated assessment ratings – Costa Rica’s, Colombia’s, Hong Kong’s & Norway’s Follow-up Reports & Technical Compliance Re-Ratings on progress in strengthening measures to tackle money laundering and terrorist financing

On 20 February 2023, the FATF has published its latest update to its Consolidated assessment ratings together with prior publications of Costa Rica’s, Colombia’s, Hong Kong’s & Norway’s Follow-up Reports & Technical Compliance Re-Ratings on progress in strengthening measures to tackle money laundering and terrorist financing.
CONSOLIDATED ASSESSMENT RATINGS
The updated Consolidated assessment ratings provide an up-to-date overview of all assessed countries concerning the effectiveness and technical compliance with the FATF Recommendations, using the FATF Methodology together with the FATF 4th Round Procedures. These ratings should be read in conjunction with the detailed Mutual Evaluations. All these documents are available on the FATF website. The FATF 40 Recommendations can have one of the following five settings:
C (Compliant)
LC (Largely compliant – There are only minor shortcomings)
PC (Partially compliant – There are moderate shortcomings)
NC (Non-compliant – There are major shortcomings)
NA (Not applicable – A requirement does not apply, due to the structural, legal or institutional features of the country)
This update of FATF’s Consolidated assessment ratings incorporates the findings of Costa Rica’s, Colombia’s, Hong Kong’s & Norway’s Follow-up Report & Technical Compliance Re-Ratings on progress in strengthening measures to tackle money laundering and terrorist financing (see national details below). Notable current characteristics and changes compared to previous reports on both effectiveness of AML/CFT systems as well as technical compliance with the FATF Recommendations are the following:
Costa Rica
R.15 (New technologies) now rated as NC
R.28 (Regulation and supervision of DNFBPs) still rated as NC
Colombia
R.7 (Targeted financial sanctions related to proliferation) still rated as NC
R.10 (Customer due diligence) now rated as LC
R.12 (Politically exposed persons) now rated as LC
Hong Kong
R.15 (New technologies) now rated as PC
R.28 (Regulation and supervision of DNFBPs) now rated as LC
Norway
R.6 (Targeted financial sanctions related to terrorism & terrorist financing) now rated as LC
R.15 (New technologies) now rated as LC
R.16 (Wire transfers) now rated as C
—
FOURTEENTH ENHANCED FOLLOW-UP REPORT AND FOURTH TECHNICAL COMPLIANCE RE-RATING REPORT OF COSTA RICA JANUARY 2023
„Overall, Costa Rica continues to make significant progress in addressing the technical compliance deficiencies identified in its MER. Nevertheless, it has presented deficiencies related to the implementation of requirements arising from the amendments to the Recommendations and the Evaluation Methodology“.
Costa Rica had previously implemented legislative and regulatory measures to meet the criteria of Recommendation 15. However, in view of the comprehensive amendment of the Recommendation and, mainly, the Methodology with the addition of criteria 15.3 to 15.11, the country has no measures to include virtual assets and virtual asset service providers in the AML/CFT system. Due to weighting of Criterion 15.3 and its impact in compliance with all the criteria of the Recommendation, as assessed in other reports of the Global Network, Recommendation 15 is downgraded from Compliant to Non-Compliant“. Also, R.28 (Regulation and supervision of DNFBPs) is still rated as NC.
„Costa Rica will continue in the enhanced follow-up process and will continue to report to GAFILAT on the progress made to strengthen its implementation of AML/CFT measures“.
—
SEVENTH ENHANCED FOLLOW UP REPORT AND SECOND TECHNICAL COMPLIANCE RE-RATING REPORT OF COLOMBIA JANUARY 2023
„Colombia has made relevant progress in relation to the deficiencies identified in the MER, especially as regards some aspects mentioned in the different regulations issued. However, upon analyzing the information provided, certain deficiencies that have not been fully addressed can yet be noted“.
„Considering the significant progress in addressing a considerable number of relevant deficiencies indicated in the MER, Colombia complies with most of the criteria and the deficiencies that remain under the R. 10 can be considered to be minor, and Recommendation 10 is rated Largely Compliant“.
„Colombia largely complies with criteria 12.1, 12.2, and 12.3. Regarding criterion 12.4 there are deficiencies to be adjusted, however, life insurance companies do not present a significant materiality according to the financial assets of the system shown in the MER, therefore, Recommendation 12 is rated as Largely Compliant“.
„The country has made important progress in the establishment of a regime for the identification and record-keeping of information of beneficial owners of legal persons established in the country and registered with the Tax Registry, in line with the requirements of Recommendation 24. In this sense, regulations issued allow adequately complying with an important part of TC, while certain moderate deficiencies remain, particularly in relation to the update and accuracy of BO information. Therefore, the rating of Partially Compliant for Recommendation 24 should be maintained“.
„In general, Colombia has been making important progress in relation to addressing the technical compliance deficiencies identified“ in its MER and has been re-rated in relation to Recommendations 10 to Largely Compliant and 12 to Largely Compliant. Of note, R.7 (Targeted financial sanctions related to proliferation) is still rated as NC. „Colombia will continue in the enhanced follow-up process and will continue to report to GAFILAT on the progress made to strengthen its implementation of AML/CFT measures“.
—
HONG KONG (CHINA) FOLLOW-UP REPORT & TECHNICAL COMPLIANCE RE-RATING FEBRUARY 2023
„Since the adoption of Hong Kong, China’s MER, the FATF amended R.15“. Indeed, „in June 2019, R.15 was revised to include obligations related to VAs and virtual asset service providers (VASPs)“. „Hong Kong, China meets many of the revised requirements of R.15 in relation to VAs and VASPs. Hong Kong, China included VAs and VASPs in the latest risk assessment“. „Hong Kong, China has addressed most of the deficiencies noted in its MER and has met some of the new requirements introduced for VASPs, but major deficiencies related to the scope of VASPs remain. On this basis, R.15 is re-rated partially compliant“.
Hong Kong, China has made progress to address the technical compliance deficiencies identified in the MER in relation to R.28, which the MER rated as PC. As a result of this progress, Hong Kong, China has been re-rated to LC on this Recommendation. „Since the adoption of its MER, Hong Kong, China has implemented risk-based AML/CFT supervision for most DNFBP sectors, which has addressed the primary deficiencies identified in the MER under R.28.5. TCSPs, real estate agents and accountants are now subject to the full range of risk-based supervision. Some other deficiencies are in the process of implementation. Risk-based supervision of the legal sector has commenced but has not yet been fully implemented. DPMS will be subject to AML/CFT framework from 1 April 2023, but as the requirements were not yet in effect at the time of TC analysis, they have not been considered for the rating of this Recommendation“. „Hong Kong, China has addressed the deficiencies identified it its MER to a large extent. On this basis, R.28 is re-rated largely compliant“.
„Overall, Hong Kong, China has made progress in addressing the technical compliance deficiencies identified in its MER and has been upgraded on R.28. However, R.15 is downgraded to partially compliant because Hong Kong, China did not sufficiently meet the new requirements of R.15“. „Hong Kong, China will remain in regular follow up“.
—
NORWAY FOLLOW-UP REPORT & TECHNICAL COMPLIANCE RE-RATING FEBRUARY 2023
„In its 4th round MER, Norway was rated PC on R.6, mainly due to the finding that Norway’s domestic, UNSCR 1373-based asset freezing mechanism did not amount to a designation process, could only be used as part of an ongoing criminal investigation and did not establish a prohibition from making funds available to persons subject to a freezing action under this mechanism. Only one minor deficiency was identified in relation to Norway’s implementation of the UN Taliban/Al Qaida sanctions – a lack of clear procedures for authorities to solicit or collect information necessary to identify targets for proposal to the UN. This has since been addressed“. Norway has therefore „largely addressed most of the deficiencies identified it its MER, and minor deficiencies remain. On this basis, R.6 is re-rated largely compliant“.
„In June 2019, R.15 was revised to include obligations related to“ VAs and VASPs, and „in its enhanced FUR in March 2019, Norway was rated C on R.15. Norway significantly meets many of the revised requirements of R.15 in relation to“ VCs and VCSPs. „Norway applies preventive measures to VCSPs, but does not require them and other type of VASPs to hold originating or beneficiary information, and make them available to appropriate authorities, as required by R.16. This impacts the information available to the appropriate authorities“. „On this basis, R.15 is re-rated largely compliant“.
„In its 4th round MER, Norway was rated PC on R.16 as there were no requirements on financial institutions, and intermediary institutions to maintain the required beneficiary information in cross-border and domestic wire transfers“. „Norway has addressed the deficiencies identified it its MER. On this basis, R.16 is re-rated compliant“.
„Overall, Norway has made progress in addressing most of the technical compliance deficiencies identified“ in its MER and has been upgraded to LC on R.6 and C on R.16. R.15 is re-rated to largely compliant because, „although Norway has met many of the requirements introduced for VASPs, minor deficiencies remain“. „Norway will remain in regular follow up“.