FATF Consults on AML/CTF Frictions in Cross-border Payments

The FATF seeks feedback to help identify how divergent AML/CFT measures adopted at the national level add to the challenges of cross-border payments.

The FATF (Financial Action Task Force) is seeking feedback from the private sector on how to address challenges to cross-border payments without compromising AML/CTF safeguards.

“Faster, cheaper and more inclusive cross-border payment services could have widespread benefits for people and economies worldwide. They would help support economic growth, international trade and global development,” the FATF says.

“That is why the enhancement of cross-border payments, with a focus on safety and security, is a key priority of the G20, the FATF, and other international organisations.”

The FATF highlights high costs, limited access, low speed and insufficient transparency as some of the challenges with cross-border payment services that the G20 Cross-Border Payments Roadmap seeks to address.

The roadmap – developed by the FSB (Financial Stability Board in coordination with CPMI and other international organisations and standard-setting bodies, including FATF – comprises 19 Building Blocks, one of which (Building Block 5) focuses on AML/CFT.

Building Block 5 seeks to identify and address areas where divergent AML/CFT rules or their implementation at national level cause challenges for cross-border payments, without compromising AML/CFT safeguards.

In collaboration with the BCBS (Basel Committee on Banking Supervision), the FATF has developed an online questionnaire to seek feedback from the private sector about these challenges and how to address them, without compromising AML/CTF safeguards.

In particular, the questionnaire seeks feedback to help identify how divergent AML/CFT measures adopted at the national level – both those that stem from the FATF standards and those that do not – add to the challenges of cross-border payments.

Such rules could, for example, include inconsistent customer identity documents or sanction screening requirements across different jurisdictions, which “may add to the cost or reduce speed and access of cross-border payments”.

Specifically, feedback is sought from banks, payment service providers, fintech companies, money or value transfer services providers, and other stakeholders.

The questionnaire, available here, and here in PDF, is open for feedback until 15 January 2021.

The second phase of the project will consider how to reduce challenges for cross-border payments by clarifying or updating the global AML/CFT standards.


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