FATF guidelines implemented by countries who are members according to cointelegraph. The hurry to implement the guidelines may be the deadline that is looming in June. The governments of the world who are members of the Financial Action Task Force are required to fulfill certain guidelines. While these guidelines are not binding, they are required to get certain financial incentives when it comes to trade and cooperation between nations.
The Financial Action Task Force (FATF) today adopted and issued an Interpretive Note to Recommendation 15 on New Technologies (INR. 15) that further clarifies the FATF’s previous amendments to the international Standards relating to virtual assets and describes how countries and obliged entities must comply with the relevant FATF Recommendations to prevent the misuse of virtual assets for money laundering and terrorist financing and the financing of proliferation.
Previously, in October 2018, the FATF updated its Standards to clarify their application to virtual assets and virtual asset service providers by amending Recommendation 15 and adding two new definitions to the FATF Glossary. The United Nations Security Council welcomed these and other ongoing efforts by the FATF to address the regulation and supervision of virtual asset activities and virtual asset service providers, including in its Resolution 2462 of March 28, 2019. Today’s action by the FATF builds on those developments.
INR. 15 establishes binding measures relevant for both countries and virtual asset service providers (as well as other obliged entities that engage in or provide virtual asset products and services) in order to establish a more level playing field across the virtual asset ecosystem.
The obligations require countries to assess and mitigate their risks associated with virtual asset activities and service providers; license or register service providers and subject them to supervision or monitoring by competent national authorities—(notably, countries will not be permitted to rely on a self-regulatory body for supervision or monitoring)—and implement sanctions and other enforcement measures when service providers fail to comply with their AML/CFT obligations; and underscore the importance of international cooperation. Some countries may decide to prohibit virtual asset activities based on their own assessment of the risks and regulatory context, or to support other policy goals.
EU’s Anti Money Laundering
According to an 5AMLD fact sheet, the law will:
- increase transparency about who really owns legal entities in order to to prevent money laundering and terrorist financing via opaque structures
- give European financial regulators better access to information via centralized bank account registers
- tackle terrorist financing risks linked to anonymous use of virtual currencies and prepaid instruments
- improve the cooperation and exchange of information between anti-money laundering supervisors and with the European Central Bank
- broaden the criteria for assessing high-risk third countries and ensure a high level of safeguards for money moving to or from such countries.
The consequences for not obliging are fines, of course! Austria’s financial regulators, for example, will fine noncompliant crypto service providers a maximum of 200,000 euros. Crypto businesses can’t keep their doors open long if they have to pay 5AMLD noncompliance fines.
