Financial Action Task Force annual report highlights first revisions to asset recovery standards and new list of key VASP jurisdictions

The Financial Action Task Force (FATF) published its 2023-2024 annual report, summarising work to prevent abuse of the international financial system and to advance implementation of its standards during the second year of the Singapore presidency of T. Raja Kumar. Key themes include preparations for the next round of mutual evaluations, including a shift to more timely, risk-based assessments with a greater focus on effectiveness and more risk-based criteria for identifying countries with strategic weaknesses. The report also covers efforts to strengthen beneficial ownership transparency through guidance and training, with numerous countries committing to implement beneficial ownership registries, and amendments to the FATF Standard on Non-Profit Organisations to promote targeted and proportionate measures. Other workstreams include deeper engagement with FATF-Style Regional Bodies, a gender inclusivity initiative, analysis of emerging risks such as cyber-enabled fraud, terrorism financing via crowdfunding platforms, ransomware, and corruption linked to citizenship and residency by investment schemes, and a renewed focus on asset recovery through changes to international standards adopted for the first time since the FATF’s creation alongside operational work with INTERPOL. On virtual assets, FATF reports that it published for the first time a list of jurisdictions with materially important virtual asset service provider activity and the steps taken to encourage and implement the FATF’s requirements; the report notes that Elisa de Anda Madrazo succeeded Mr. Kumar as FATF President on 1 July 2024.