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Financial Services Law Insights and Observations

FATF advances work on proliferation finance, virtual assets

Financial Crimes Department of Treasury Of Interest to Non-US Persons FATF Virtual Currency Anti-Money Laundering Combating the Financing of Terrorism Digital Assets

Financial Crimes

On June 25, the U.S. Treasury Department announced that the Financial Action Task Force (FATF) concluded its fourth plenary meeting, in which it “advanced its core work on virtual assets, proliferation finance, digital transformation, and peer member assessments.” Among other things, FATF finalized and adopted guidance on proliferation financing risk and mitigation. FATF also completed a second 12-month review on how well jurisdictions and the private sector have implemented anti-money laundering/combating the financing of terrorism (AML/CFT) obligations on virtual assets and virtual assets service providers (VASPs). FATF found that jurisdictions and the VASP sector continue to make progress implementing the revised standards, but that “weak or non-existent AML/CFT implementation in many countries remains a key source of risk.” Additionally, FATF completed a report examining the financing of racially or ethnically motivated violent extremists, completed a report on money laundering risks arising from conservation crimes, and adopted mutual evaluation reports on Japan and South Africa that provide assessments of both countries’ “AML/CFT and counter-proliferation financing legal frameworks as well as the measures in place to implement these frameworks effectively.”

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