Outcomes FATF Plenary, 22-24 February 2023 (FATF Statement on the Russian Federation, Compliance with the FATF Standards [„Grey“ & „Black“ Lists], Strategic initiatives, Money Laundering and Terrorist Financing in the Art and Antiquities Market)

The FATF informs about the outcomes of its FATF Plenary Meetings from 22-24 February 2023, suspending the FATF membership of the Russian Federation, discussing and adopting the Mutual Evaluation Reports of Indonesia & Qatar, updating its High-risk and other monitored jurisdiction lists (FATF „black list“ and „grey list“). It also notifies about its strategic initiatives on beneficial ownership, the disruption of ransomware, and requirements for virtual assets & virtual asset service providers. Finally, it presents its new Money Laundering and Terrorist Financing in the Art and Antiquities Markets report.
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FATF Statement on the Russian Federation
The FATF issued the following key statement:
„The Russian Federation’s actions unacceptably run counter to the FATF core principles aiming to promote security, safety, and the integrity of the global financial system. They also represent a gross violation of the commitment to international cooperation and mutual respect upon which FATF Members have agreed to implement and support the FATF Standards. Considering the above, the FATF has decided to suspend the membership of the Russian Federation. The Russian Federation remains accountable for its obligation to implement the FATF Standards. The Russian Federation must continue to meet its financial obligations. The Russian Federation will remain a member of the Global Network as an active member of the EAG and retain its rights as an EAG member. The FATF will monitor the situation and consider at each of its Plenary meetings whether the grounds exist for lifting or modifying these restrictions.“
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Compliance with the FATF Standards
The FATF adopted the Mutual Evaluation Reports of Indonesia and Qatar. The mutual evaluation concluded that Indonesia has a strong legal, regulatory and institutional framework, resulting in robust technical compliance in a number of areas. Qatar has made a range of improvements to its AML/CFT regime in recent years, and Qatar’s technical compliance with the FATF Standards is very strong. Yet while Indonesia needs to focus more on pursuing larger scale money launderers and enhancing asset confiscation, Qatar needs to improve its law enforcement response to ML/TF/PF and the availability and access to beneficial ownership information. The FATF will publish the Indonesia and Qatar reports by May 2023.
Concerning Jurisdictions subject to a call for action (FATF „black List“), no new countries/jurisdictions have been added to this list. Hence the FATF calls on its members and other jurisdictions to further apply countermeasures on Iran and the Democratic People’s Republic of Korea (DPRK). Moreover, the FATF maintains its calls on its members and other jurisdictions to apply enhanced due diligence measures proportionate to the risks arising from Myanmar.
Concerning Jurisdictions under Increased Monitoring (FATF grey List“) which are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing, Cambodia & Morocco have now been removed from the list and both countries are no longer subject to the FATF’s increased monitoring process. Ergo, the current FATF „grey List“ counts the following countries: Albania, Barbados, Burkina Faso, Cayman Islands, Democratic Republic of the Congo, Gibraltar, Haiti, Jamaica, Jordan, Mali, Mozambique, Nigeria, Panama, Philippines, Senegal, South Africa, South Sudan, Syria, Tanzania, Türkiye (Turkey), Uganda, United Arab Emirates (UAE) & Yemen.
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Strategic initiatives
The FATF has made it a priority to improve the transparency of beneficial ownership, and to prevent criminals, the corrupt and sanctions evaders from hiding their illegal activities and assets behind anonymous shell companies, other businesses or legal arrangements. Consequently, the FATF Plenary has now finalised a guidance document which will help countries implement the revised requirements of Recommendation 24 on legal persons, which requires countries to ensure that beneficial ownership information is held by a public authority or body functioning as a beneficial ownership registry, or an alternative mechanism they will use to enable efficient access. This guidance will be published in March 2023. The Plenary also agreed on enhancements to Recommendation 25 on legal arrangements to bring its requirements broadly in line with those for Recommendation 24 ensure a balanced and coherent set of FATF standards on beneficial ownership, and will start working on a corresponding guidance document for Recommendation 25.
The FATF completed research that analyses the methods that criminals use to carry out their ransomware attacks and how they launder ransom payments. A report on disrupting the financial flows from ransomware will be published in March 2023 and include a list of risk indicators that can help public and private sector entities identify suspicious activities related to ransomware.
The Plenary also agreed on a roadmap to strengthen implementation of FATF Standards on virtual assets & virtual asset service providers, which will include a stocktake of current levels of implementation across the global network. In the first half of 2024, the FATF will publish a report on steps FATF members and FSRB countries with materially important virtual asset activity have taken to regulate and supervise virtual asset service providers.
Finally, the FATF finalised a report that explores [Money Laundering and Terrorist Financing in the Art and Antiquities Market](https://www.fatf-gafi.org/content/fatf-gafi/en/publications/Methodsandtrends/Money-Laundering-Terrorist-Financing-Art-Antiquities-Market.html). The report includes a list of risk indicators that can help public and private sector entities identify suspicious activities in the art and antiquities markets, and also highlights the importance of rapidly identifying and tracing cultural objects involved in money laundering or terrorist financing. The report also includes some good practices** that countries have taken to address the challenges they face, including the establishment of specialised units and access to relevant databases and cooperation with experts and archaeologists to help identify, trace, investigate and repatriate cultural objects.