Four jurisdictions, including the Cayman Islands and Morocco, will undergo increased monitoring as they face pressure from a global enforcement agency to address deficiencies in their efforts to combat money laundering.
The Financial Action Task Force, a Paris-based organization that sets the standards in the anti-money laundering law, added Burkina Faso, Cayman Islands, Morocco and Senegal on Thursday to its list of jurisdictions under increased monitoring, joining 15 other countries. The deficiencies identified vary for each jurisdiction, but include maintaining comprehensive information on beneficial owners and expanding the operations of the countries’ financial intelligence units, according to the FATF.
For example, the FATF in a report said that the Cayman Islands government needs to impose effective administrative penalties and coercive actions against entities involved in money laundering violations, as well as to implement appropriate sanctions in cases where accurate and timely information on beneficiary property are not provided.
“The Cayman Islands are an important financial center; we expect countries that present higher risks, we expect proportional measures against those risks, ”said FATF President Marcus Pleyer during a virtual press conference on Thursday.
Being added to the so-called “gray list” means that the four countries and territories will work with the FATF on plans to address the shortcomings identified in their terrorist financing regimes within the agreed deadlines and subject to extra checks, said the FATF.
Pakistan, another country on the gray list, has made significant progress in improving its structures to combat illicit financing, including demonstrating that its law enforcement agencies were identifying and investigating terrorism financing activities and taking enforcement action against violations. targeted financial sanctions, the FATF said in a report. But Pakistan will remain on the list for further monitoring; the country still needs to address deficiencies related to terrorist financing, according to the FATF.
The Cayman Islands Monetary Authority and Washington’s embassies in Morocco, Senegal and Pakistan did not immediately respond to requests for comment.
The FATF, which evaluates anti-money laundering and terrorist financing laws in 205 jurisdictions worldwide, said the Covid-19 pandemic impacted its country assessments, delaying some of its local analyzes.
“The FATF continues to monitor the money laundering and terrorist financing risks related to Covid-19’s financial crimes,” said Pleyer.
The organization, however, was able to discuss a mutual evaluation report on New Zealand virtually, said Pleyer. After 14 months of work, the agency found that New Zealand’s measures to combat money laundering and terrorist financing are doing well, especially in the areas of confiscation and recovery of criminal products and international cooperation. But the country needs to focus on improving the availability of information on effective ownership, according to the FATF.
The FATF also plans to release an update to its 2019 guidance on cryptocurrency regulations. The current guidance states that countries should adopt regulations requiring virtual currency companies – including exchanges and wallet suppliers – to collect information about their customers and share it with other institutions, including other crypto companies, that receive funds transfers.
The organization said that while the public and private sectors have made progress in implementing the necessary measures related to cryptocurrency, it also revealed the need for guidance to address specific areas. FATF plans to publish the draft in March for public consultation and expects to approve the final guidance in June.
“We welcome FATF’s actions to enhance operational efforts to identify terrorist financiers and develop additional guidance in consultation with the private sector on virtual assets and proliferation financing, two top United States priorities,” said Treasury Secretary Janet Yellen, in a statement on Thursday.
Write to Mengqi Sun at [email protected]
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