Ellen Timmer – juridische artikelen en berichten

Even FATF is aware of the major flaws in its AML-standards. In February the organisation started a project to study and mitigate the harmful consequences of the FATF Standards. Readers are invited to submit contributions, preferably before 21 April 2021.

The FATF article:

Mitigating the Unintended Consequences of the FATF Standards
In February 2021, the Financial Action Task Force (FATF) launched a new project to study and mitigate the unintended consequences resulting from the incorrect implementation of the FATF Standards.

The project will focus on four main areas:

• De-risking, or the loss or limitation of access to financial services. This practice has affected non-profit organisations (NPOs), money value transfer service providers, and correspondent banking relationships, in particular;
• Financial exclusion, a phenomenon whereby individuals are excluded from the formal financial system and denied access to basic financial services;
• Suppression of NPOs or the NPO sector as a whole through non-implementation of the FATF’s risk-based approach;
• Threats to fundamental human rights stemming from the misuse of the FATF Standards or AML/CFT assessment processes to enact, justify, or implement laws, which may violate rights such as due process or the right to a fair trial.

The FATF will conduct the project in two phases:

Phase One: research and engagement. The project team will analyse these unintended consequences resulting from the misuse of the FATF’s Standards on preventing and combating money laundering and the financing of terrorism. This work will draw on the knowledge and experiences of members of the FATF’s Global Network of 205 jurisdictions, its observers, and outside stakeholders.

Phase Two: solutions. The second phase will develop options the FATF could consider to prevent and mitigate these unintended consequences.

The FATF welcomes input to inform this project, including, for example: scholarly research; industry and civil society perspectives; and documented instances of unintended consequences. Information may be sent to pscf@fatf-gafi.org. While contributions are welcome for the duration of the project, they would be most relevant for Phase One if submitted on or before 20 April 2021.

This is not an investigative endeavour, but an opportunity to study trends and propose solutions. Any information provided to the FATF Secretariat will be shared with the project team and the source will be identified. Depending on the volume of input, we may not be able to follow up on each suggestion for engagement, nor are we able to provide feedback about how, or if, information received is used.

Also available
Atténuer les conséquences imprévues des normes du GAFI

Necessity of supervision and counterbalance.
Of course this is not enough. An undemocratic body like FATF should not draft regulations that have consequences for every citizen in the world. The concepts FATF has developed are fundamentally flawed and have to be replaced before more damage is done.

This article was also published on the site of Compliance Platform Trustkantoren.

Addition 21 April 2021
ECNL in its March newsletter refers to new initiatives of FATF:

FATF is stepping up its efforts against states misusing its standards to restrict civic freedoms. As we reported earlier, in January 2021 it responded with a valid and clear criticism of Serbia reminding governments that overregulation of CSOs is not in line with its recommendations. This month, as a crucial new development, it announced the set up of a new work stream on the unintended consequences of poorly implemented AML/CFT measures. The FATF stream will seek to better identify and mitigate risks of financial exclusion and the abuse of counter terrorism measures. This is certainly a welcome step, in light of the worrisome trend we see in many countries, including Turkey.

The Global NPO Coalition on FATF, that ECNL is member of, is trying to make clear to FATF that its standards are harming the nonprofit sector.

ECNL also mentions an article on Just Security on FATF’s initiative regarding the harmful consequences of AML, e.g. de-risking, with the friendly title Protecting Civil Society in Global Counterterrorism: FATF Leads the Way, UN Should Follow.