Financial Action Task Force To Create Global AML Standard

September 19, 2018 9:02 PM

The president of the Financial Action Task Force (FATF) believes it’s close to reaching a “consensus across nations” for anti-money laundering (AML) regulations and that global standards could be agreed upon as soon as October.

The FATF was formed in 1989 at the G7 Summit in Paris to combat the global money laundering problem. Since then, the FATF’s remit has come to encompass both traditional fiat and cryptocurrency-based money laundering as well as terrorism financing. It has 37 members, including the US, Argentina, South Africa, Japan, and the European Commission.

At Argentina’s G20 meeting in July 2018, financial ministers and central bank representatives called on the FATF to clarify AML standards for cryptocurrencies by October. They had previously been discussed at the G20 summit in March 2018, where FATF was urged to apply its existing AML standards to the new economies of cryptocurrency.

According to reports from the Financial Times, FATF president Marshall Billingslea is optimistic that the organization will agree upon a set of standards in October to close “gaps” in global AML legislation.

Billingslea describes the currently uncoordinated global approach to AML standards, with countries working within their own internal frameworks, as a “patchwork quilt” that leaves transnational financial systems vulnerable.

October’s expected agreement on standards will require the FATF to assess which of its existing standards must be updated to accommodate digital assets. The FATF is also likely to revise the methodology it uses to judge the implementation of AML regulation by participating countries and plan when the new standards will take effect.

The FATF’s FinTech and RegTech Forum in China, held in early September, saw governments and private sector experts discuss “the landscape of regulatory approaches to virtual currency/crypto assets, and the risks associated with their use.” The forum explored how FATF standards might apply to cryptocurrencies. 

Melanie Kramer is a freelance FinTech, blockchain, and cryptocurrency writer based between France and Canada. Melanie has studied, and retains an avid interest in, global politics, business, and economics.

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