UK Backs Revised FATF Standards

by Robert Lee, Tax-News.com, London

23 February 2012

The UK has announced its support for the Financial Action Task Force's (FATF) new standards to combat money laundering and terrorist financing.

The standards are aimed at tackling the global threat of money laundering, terrorist financing and the proliferation of weapons of mass destruction. The FATF’s standards are applied by over 180 countries through a global network of money laundering and counter terrorist regional bodies, as well as the International Monetary Fund and the World Bank.

The new standards come in the form of 40 revised Recommendations set by the FATF. They are the result of a two year review process, carried out to ensure that the standards continue to be relevant and effectively target emerging risks. The UK has welcomed the new standards and the need for FATF and its member countries to promote their implementation.

As the UK's Treasury points out, the FATF Recommendations have been revised to provide governments with stronger tools to take action against financial crime and protect the integrity of the global financial system.

Areas specifically targeted for reform are high risk or where implementation could be enhanced, including dealing with new threats such as the proliferation of weapons of mass destruction, improving transparency and being tougher on corruption.

The Treasury says that the Recommendations will also provide more flexibility to simplify measures that are applied to financial services or transactions that pose a low risk for abuse. This risk-based approach will allow financial institutions and other designated sectors to focus resources more effectively on higher risk areas.

The FATF will begin a new round of evaluations on the Recommendations of its member countries in 2013 and will focus much more intensively on assessing how effectively countries have implemented the Standards.

The Commercial Secretary to the Treasury, Lord Sassoon said: “The UK welcomes the revised FATF standards. The integrity of the global financial system will now be better protected through strengthened measures to combat the global threat of money laundering, terrorist financing and of the proliferation of weapons of mass destruction. We are fully committed to implementing these new global standards and will work with international partners in FATF to encourage full and consistent adoption by all countries.”

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