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7/1/2020

Financial Action Task Force (FATF) Advances Its Work on Virtual Assets, Proliferation Financing, COVID-19, and Illegal Wildlife Trafficking…

Financial Action Task Force (FATF) Advances Its Work on Virtual
Assets, Proliferation Financing, COVID-19, and Illegal Wildlife
Trafficking
June 30, 2020

WASHINGTON - The Financial Action Task Force (FATF) concluded its 31st plenary meeting by
calling on its members to tackle new threats and vulnerabilities posed by criminals during the
COVID-19 crisis. The FATF also completed a 12-month review of progress made by jurisdictions
on implementing the new FATF standards on virtual assets adopted during the U.S. presidency
of the FATF. The international task force further agreed upon dra text, on which it will seek
public consultation, revising its standards to incorporate measures to counter proliferation
financing, and adopted a groundbreaking report on money laundering and illegal wildlife
trafficking.
“The FATF’s work continues to grow in importance as bad actors across the world engage in
illicit activity such as COVID-19 fraud, use of virtual assets to hide criminal activity, and many
others,” said Secretary Steven T. Mnuchin. “The United States looks forward to the continued
collaboration of the FATF and remains committed to strengthening the global financial system.”

FATF ISSUES INFORMATION FOR COUNTRIES ON ANTIMONEY LAUNDERING AND COUNTER TERRORIST
FINANCING (AML/CFT) POLICY RESPONSE TO COVID-19
The attempts by criminals to profit from and exploit the COVID-19 pandemic through fraud is a
concern to all nations fighting the disease. The FATF has compiled case studies from around the
world on different fraud schemes to assist law enforcement and governments in adopting best
practices to address these threats.

FATF ISSUES REPORT ON VIRTUAL ASSETS
As the use of virtual assets as an alternative to traditional payment systems has grown, the FATF
has sought to address associated money laundering, terrorist financing, and proliferation
financing (ML/TF/PF) risks. Virtual assets have been associated with a range of criminal activity,
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Financial Action Task Force (FATF) Advances Its Work on Virtual Assets, Proliferation Financing, COVID-19, and Illegal Wildlife Trafficking…

including cybercrime and other cyber-enabled crimes, and high-volume vendors and buyers of
narcotics. Criminals and other facilitators are increasingly using anonymity-enhancing
technology and tools to disguise their transactional activity. Addressing this issue was a priority
of the U.S. FATF Presidency. In June 2019, the FATF revised its standards to explicitly impose
AML/CFT obligations on virtual assets and virtual asset service providers (VASPs) and undertook
a 12-month review on the state of implementation. The review, which was completed this year
and will be published on the FATF website, surveys the global implementation of the new FATF
standards by governments and industry. The FATF Plenary also adopted a soon-to-be published
report for the G20 Finance Ministers and Central Bank Governors on the AML/CFT and counterproliferation financing (CPF) implications of so-called “stablecoins.” The FATF Plenary further
endorsed continued scrutiny of virtual assets by approving a second 12-month review for
completion in 2021 and committed to providing updated guidance on virtual assets, including
so-called “stablecoins.”

FATF SEEKS PUBLIC CONSULTATION ON ENHANCED
STANDARDS TO COUNTER WEAPONS OF MASS
DESTRUCTION (WMD) PROLIFERATION FINANCING RISK
The FATF agreed to seek public consultation on amendments to the standards that would
require countries and their financial institutions and designated non-financial business and
professions to identify, assess, and mitigate proliferation financing risk. These proposed
revisions to the FATF standards will build upon the commitment made by FATF Ministers in 2019
to strengthen the global response to WMD proliferation financing by ensuring that members of
the FATF Global Network have the proper tools to address this threat.

FATF RELEASES REPORT ON ILLEGAL WILDLIFE
TRAFFICKING
The FATF adopted a report to assist jurisdictions in combatting money laundering related to
wildlife crimes. This activity is estimated to generate billions of dollars a year in criminal
proceeds. The study highlights the need for an increased focus on financial investigations to
combat these crimes and notes that the FATF standards provide a useful framework for
countries to address these threats by strengthening their national laws and policies, their
domestic and international cooperation, and their partnerships with the private sector.

NEW INCOMING FATF PRESIDENT
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Financial Action Task Force (FATF) Advances Its Work on Virtual Assets, Proliferation Financing, COVID-19, and Illegal Wildlife Trafficking…

This plenary closes out the term of the FATF Presidency under China. Starting July 1, 2020,
Germany will hold the first two-year Presidency. The FATF under the German Presidency will
focus on digital transformation in the AML/CFT space, combatting environmental crime and
addressing new challenges of terrorism financing. The German Presidency will carry on the
work initiated under the Chinese Presidency and bring to conclusion the strategic review of the
FATF, which is designed to make future mutual evaluations more timely, risk-based, and
effective.
Outcomes of the FATF Plenary, 30 June February 2020

The Financial Action Task Force (FATF) is an international policy-making and standard-setting
body, headquartered in Paris, dedicated to combating money laundering and the financing of
terrorism and proliferation finance. Treasury’s Deputy Assistant Secretary for Terrorist Financing
and Financial Crimes leads the U.S. delegation to FATF.
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