With the application of new technologies such as virtual assets making financial crime increasingly complex and transnational, the role of global watchdogs such as the Financial Action Task Force (FATF) is rising in importance. 2024 has indeed been the year of enhanced global cooperation in fighting financial crime.
The FATF recently issued a Money Laundering National Risk Assessment guidance to help countries have a common reference point in effectively fighting financial crime. We spoke to Yashoda Fezah, General Manager, Compliance Administration & Support Services (CASS), to understand how the FATF has helped member states over the year by leveraging cross-border collaboration among regulators, law enforcement, and the private sector.
Edited excerpts from an exclusive interview with our compliance expert:
- What are the most significant recent developments in the FATF framework, particularly in terms of global compliance and enforcement?
The FATF has taken key steps to strengthen global AML/CFT compliance, including measures covering new technologies such as virtual assets, as well as a continued thrust on transparency in beneficial ownerships and monitoring of member states.
When it comes to virtual assets, the implementation of the Travel Rule has been a significant milestone, allowing the FATF to regulate all virtual asset transactions above a certain threshold. In February 2023, the FATF adopted a roadmap to improve implementation of Recommendation 15 on New Technologies.
Meanwhile, a core focus on strengthening beneficial ownership standards and guidance intends to facilitate the identification of corruption, sanctioning and combatting of financial crime. The FATF guidance issued in March 2023 has gone a long way in helping member states apply the revised requirements of Recommendation 24 on beneficial ownership.
- Which African jurisdictions do you believe are currently under the most scrutiny from the FATF, and what specific challenges do they face in meeting compliance requirements?
Several African jurisdictions are under increased scrutiny from the FATF, including Tanzania, Nigeria, Kenya, and the Democratic Republic of Congo, which have been highlighted for deficiencies in their AML/CFT measures.
Tanzania has made progress by building the capacity of its law enforcement agencies, but challenges remain in fully implementing effective compliance frameworks.
Kenya, facing a high risk of terrorist activities, especially targeting Westerners, continues to struggle with inadequate preventive measures.
Other countries like Burkina Faso, Cameroon, Mali, and Mozambique are also under increased monitoring, with issues ranging from weak enforcement to insufficient regulatory transparency. These jurisdictions must focus on improving institutional capacity and aligning their frameworks with global standards.
- From a broader perspective, what are the key lessons learned by countries that have gone through the FATF evaluation process in recent years?
Countries that have undergone the FATF evaluation process have learned several critical lessons. A proactive, risk-based approach to AML/CFT is essential, alongside robust interagency collaboration. Transparency in beneficial ownership, effective monitoring of financial transactions, and timely reporting of suspicious activities are also key focus areas.
Mauritius, for example, has made notable progress by addressing technical compliance deficiencies, including improving its beneficial ownership regime. However, a recurring lesson is that countries must remain agile and continuously enhance their compliance frameworks to meet evolving international standards. The FATF evaluation process is an ongoing journey of reform and capacity-building.
- As Mauritius is preparing for its FATF mutual evaluation in 2027, what steps should the country take to strengthen its position in the fight against financial crime and enhance its compliance framework?
In order to further strengthen its position ahead of the 2027 mutual evaluation, Mauritius must ensure comprehensive oversight of all business activities that are vulnerable to money laundering and terrorism financing.
For instance, Mauritius does not regulate dealers of high-value goods such as motor vehicles, as opposed to other jurisdictions such as South Africa and Seychelles. We would welcome the revision of FIAMLA to include high value dealers as reporting persons such that they too are subject to applicable AML/CFT regulatory oversight.
- How do you see global collaboration evolving in the fight against financial crimes, particularly with regards to FATF recommendations and cross-border cooperation?
Global collaboration in combating financial crime is evolving rapidly, driven by increased information-sharing and multilateral cooperation. The FATF’s role in facilitating cross-border collaboration among regulators, law enforcement, and the private sector is pivotal in addressing financial crime. The recent identification of several countries such as Algeria, Angola, and Lebanon under FATF’s increased monitoring underscores the importance of global cooperation in addressing AML/CFT deficiencies.
As financial crime becomes more complex and transnational, the FATF’s recommendations, particularly regarding enhanced due diligence and information-sharing, will continue to play a central role in fostering a coordinated global response. Countries must prioritise international collaboration to build more resilient financial systems. In this context, the recent guidance by the FATF to support countries in conducting a National Risk Assessment (NRA) focussed on money laundering risks can serve as a valuable resource. Released on 07 November by the FATF, the Money Laundering NRA Guidance 2024 helps countries to have a common reference point towards effectively fighting financial crime.
