AML/CFT: FATF tidies up the 40 Recommendations and plugs obvious holes
The official FATF press release says that the new 40 Recommendations have achieved seven principle objectives. When one of those is to finally bring tax evasion within the formal list of predicate offences (instead of it clearly being within the broader "all crimes" section, it suggests a lightweight review. In fact, it's anything but that.
The Forty Recommendations were in desperate need of a major revision. The addition of Nine Special Recommendations was, frankly, a hodgepodge of things that should, in truth, be in the Recommendations proper.
The piecemeal revisions in the past ten years have created a plate of spaghetti when what is needed is a neat lasagne.
The 40 + 9 Recommendations had become an obstruction to good practice as countries used them as a safe haven to avoid developing unpopular and comprehensive laws. In many ways, the FATF had led a charge to the bottom when it came to liability and enforcement.
And pressure groups in large member countries had been able to use the FATF as a means of stifling competition in financial services.
But, as the FATF has grown and its membership base has widened, and as FATF style regional bodies have sprung up and made their views known, some more forcefully than others, the original seven (i.e. G7) countries have not had it all their own way.
A full review of the 2012 40 Recommendations will be available in World Money Laundering Report's next issue (see World Money Laundering Report.Com
In the meantime, readers are invited to air their views on the new Recommendations at www.wmlro.com in the "Have Your Say" section (free registration required.).
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