FATF Singapore Presidency Announces 2022-2024 Objectives

On July 1, 2022, the Financial Action Task Force (FATF) published its objectives for July 2022 – June 2024. Under its new Singapore Presidency, the FATF will prioritize work in the following areas:

• Strengthening asset recovery
• Countering illicit finance related to cyber-enabled crime
• Increasing the effectiveness of global anti-money laundering (AML) measures
• Reinforcing FATF partnerships with FATF-style regional bodies (FSRBs)

Taking the baton from the German Presidency that ran from 2020-2022, these priorities are broadly consistent with the objectives set out in the previous rotation. However, the FATF also announced preparations for the fifth round of mutual evaluations, which will be “more frequent, targeted, and have more scrutiny,” with an increased focus on significant risks and effectiveness.

Newly appointed FATF President T. Raja Kumar initially presented his objectives at the June 2022 Plenary. Kumar previously served as senior advisor on international policy in Singapore’s home affairs ministry.

Strengthening asset recovery

The FATF will focus on accelerating the successful recovery of funds that fall victim to illicit financial flows. By expediting existing schemes and proposing new operational strategies, this will help countries develop more robust operational systems.

Global financial crime has grown exponentially, but less than one percent of global illicit financial flows get intercepted and recovered by countries. To combat this, the FATF will strengthen international cooperation between authorities in respective jurisdictions, especially among the FATF, FSRBs, and Asset Recovery Networks. 

Adopting a multi-agency approach, the FATF will work closely with its members and stakeholders including the United Nations (UN) and the International Monetary Fund (IMF) to strengthen collective efforts against financial crime and corruption. In collaboration with INTERPOL and its recently launched Financial Crime and Anti-Corruption Centre, the FATF will convene a Global Roundtable on Financial Crime. The event will focus on actionable changes, including data analytics and public-private partnerships to aid the work of law enforcement and other agencies. 

Countering illicit finance of cyber-enabled crime

To mitigate the threat of increasingly sophisticated financial crime techniques, the FATF will embark on a new initiative to focus on money laundering and terrorist financing (ML/TF) linked to cyber-enabled fraud and scams. Our State of Financial Crime 2022 report highlighted that cybercrime is the top predicate offense of concern for compliance teams.

Through this initiative, the FATF aims to better understand the challenges at large, including specific money laundering techniques. It can then identify appropriate tools to fight those risks, such as through data analytics and industry partnerships, and highlight best practices for its members to learn and adopt. 

Increasing effectiveness of global AML measures

The FATF will also continue its core work of increasing the effectiveness of global anti-money laundering and combating the financing of terrorism (AML/CFT) measures and ensuring its core recommendations remain up-to-date. 

To do this, the FATF has outlined several focus areas centered around strengthening a culture in which best practices are quickly identified and shared to help drive effectiveness. These include:

• Monitoring new financial crime risks and implementing best practices around virtual assets and their service providers
• Completing and amending guidance on beneficial ownership information for legal persons
• Promoting competent authorities’ adoption of data analytics to achieve good AML/CFT outcomes
• Exploring ways to enhance information sharing about the TF risks associated with ISIL, Al Qaeda, and their affiliates
• Raising awareness of ML/TF risks linked to grand and systemic corruption, the illegal wildlife trade, and environmental crime 
• Updating relevant training materials and ensuring a good community of experts conducts mutual evaluations and reviews for new areas in the effectiveness assessment 

Key takeaways

Compliance staff should take note of these priority areas and ensure they remain abreast of any updated FATF guidance on areas that pertain to their area of business. 

Data analytics and public-private partnerships are two areas where additional guidance is likely to be published, which firms should review before the fifth round of mutual evaluations.

The Monetary Authority of Singapore’s (MAS) Collaborative Sharing of ML/TF Information and Cases (COSMIC) platform highlights the growing prominence of public-private partnerships and data-sharing initiatives in the Asia-Pacific region.