Financial Action Task Force
FATF standards on virtual assets and VASPs - FATF publishes report on stablecoins and 12 month review - June 2020
The Financial Action Task Force (FATF) has published a report, addressed to the G20 finance ministers and central bank governors, analysing certain anti-money laundering (AML) and counter-terrorist financing (CTF) issues relating to stablecoins. In June 2019 the FATF revised its Standards, which place AML/CFT obligations on intermediaries between individuals and the financial system, to require virtual asset service providers (VASPs) to implement “the full range of preventive measures against ML/TF”. The report states that the extent of requirements applying to any so-called stablecoin arrangement will depend on its design, in particular whether it is centralised or decentralised.
The FATF proposes the following four actions:
- a call on all jurisdictions to implement the revised standards on virtual assets and VASPs as a priority;
- a review of the implementation and impact of the revised standards by June 2021, considering whether further amendments are necessary;
- updated guidance for jurisdictions on stablecoins and virtual assets, clearly detailing how AML and CTF controls apply to stablecoins; and
- enhancement of the international framework for VASP supervisors to share information, with a view to developing a global network of supervisors to oversee virtual asset activities.
The FATF has also published findings from its 12-month review of its revised AML and CTF standards on VASPs. Overall, it finds that good progress has been made in implementing the standards, with 35 out of 54 reporting jurisdictions advising implementation.
FATF report on the findings from its 12-month review of its revised standards on virtual assets and VASPs
Webpage
FATF report on the AML and CTF risks posed by stablecoins
Webpage
European Parliament
AML/CTF - European Parliament to consider European Commission Action Plan - 7 July 2020
The European Parliament has updated its procedure file on the development of a comprehensive Union policy on AML and CTF to announce that it will consider, among other developments, the European Commission’s AML and CTF Action Plan during its plenary session from 8 to 10 July 2020. The Commission published the Action Plan for consultation on 7 May 2020.
The Action Plan aims to enhance the implementation and harmonisation of AML and CTF rules by: (i) ensuring the effective application of EU rules; (ii) introducing a single EU AML and CTF rulebook to limit divergences in implementation; (iii) increasing coordination between EU member states’ financial intelligence units; (iv) increasing enforcement of criminal sanctions and information exchange; and (v) increasing the EU’s global role in AML and CTF policy and supervision.
The European Commission has also announced that has extended the deadline for its consultation on the development of an AML and CTF Action Plan from 29 July 2020 to 26 August 2020.
European Parliament procedure file: Commission Action Plan for a comprehensive Union policy on AML and CTF
European Commission Communication on the development of an Action Plan for a comprehensive Union policy on AML and CTF
New Legislation
Global Human Rights Sanctions Regulations 2020 and accompanying OFSI guidance - 5 July 2020
The Global Human Rights Sanctions Regulations 2020 (SI 2020/680) were made on 5 July 2020, in exercise of the powers conferred by section 55(3) of the Sanctions and Anti-Money Laundering Act 2018. The Regulations enable the Secretary of State to impose asset freezes and travel bans on designated persons involved in activities which, if carried out by or on behalf of a State, would amount to a serious violation of certain human rights.
Part 2 of the Regulations details the criteria against which the decision to designate a person subject to a travel ban or asset freeze is to be made under the sanctions regime; Part 3 sets out financial sanctions measures that can be imposed on designated persons, and the offences which can be committed if the measures are not adhered to; and Part 5 makes provision for exceptions and licences that may apply, or be available, in respect of prohibitions and requirements under this regime.
The Regulations came into force on 6 July 2020.
HM Treasury and the Office of Financial Sanction Implementation (OFSI) have published guidance on the operation of the Regulations and on the application process for exceptions and licences that are available in respect of the prohibitions and requirements under this regime. Individual licences may be issued on the specific legal grounds outlined in Schedule 2 of the Regulations.
The Global Human Rights Sanctions Regulations 2020 (SI 2020/680)
Explanatory memorandum
HM Treasury and OFSI guidance on the operation of the Global Human Rights Sanctions Regulations 2020
HM Treasury and OFSI guidance on the application process for exceptions and licences under the Global Human Rights Sanctions Regulations 2020
Webpage
