U.S. Department of Treasury Under Secretary David Cohen Issues Statement on New Financial Action Task Force Recommendations

The U.S. Department of the Treasury Under Secretary David Cohen today, February 16, 2012 issued the following statement regarding New Financial Action Task Force Recommendations:

Statement by Under Secretary David Cohen on new Financial Action Task Force Recommendations

WASHINGTON – Treasury Under Secretary for Terrorism and Financial Intelligence David S. Cohen issued the following statement today:   “The United States welcomes the successful completion of the work of the Financial Action Task Force (FATF) to revise and strengthen its recommendations to combat the global threat of money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction. The FATF is the global standard-setting body for measures to combat these threats and today’s recommendations will be applied by more than 180 countries, through a global network of FATF-style regional bodies, as well as the International Monetary Fund (IMF) and the World Bank.   “The FATF recommendations have been revised to provide governments with stronger tools to take action against financial crime and protect the integrity of the international financial system. At the same time, these new standards address new priority areas such as proliferation finance, corruption, and tax crimes. The revisions reflect a risk-based approach, strengthening safeguards in areas that pose higher risks, and providing more flexibility to simplify measures in areas that pose a low risk for abuse. Key new measures include the following:  

• Proliferation Finance: FATF has adopted a new standard to assess jurisdictional compliance with the targeted financial sanctions requirements of UN Security Council resolutions that focus on the financing of proliferation activity. This standard will assist countries to address proliferation threats emanating from jurisdictions such as Iran and North Korea.

• Corruption: To combat the significant problem posed by corruption across the globe, FATF has expanded the scope of its standard requiring financial institutions to apply enhanced due diligence (EDD) against all foreign politically exposed persons (PEPs) to now include a risk-based requirement for applying EDD against domestic PEPs. FATF has also strengthened and clarified its standards addressing the transparency of corporate vehicles and trusts, particularly with respect to beneficial ownership requirements. Such enhancements will assist financial institutions and anti-money laundering authorities to identify and investigate suspect accounts, including those used to launder proceeds of corruption.

• Tax Crimes: FATF has also expanded the scope of predicate offenses to money laundering by including serious tax crimes. This expansion will promote the use of anti-money laundering authorities to assist in the identification, confiscation, and recovery of lost tax revenue.

  “The FATF’s issuance of these revised global standards is an important development in the international community’s efforts to protect the international financial system, combat money laundering, terrorist financing, and the financing of proliferation. The United States looks forward to joining countries throughout the world in implementing these new standards.”