Half of assessed jurisdictions don’t have ‘adequate laws and regulatory structures’ — FATF

The Financial Action Task Force (FATF) reports that many countries, including those with Virtual Asset Service Providers (VASPs), are failing to comply with its Combating the Financing of Terrorism (CFT) and Anti-Money Laundering (AML) standards.

In a report on “Effectiveness and Compliance with FATF Standards” published on Tuesday, the group said that across 120 countries, 52% of assessed jurisdictions had “appropriate legal and regulatory structures” to Assess risk and verify the company’s beneficial owners. In addition, the FATF reports that only 9% of countries are “very effective” in this area.

“Countries need to prioritize their work and demonstrate improvements in recording, reporting and verifying information about legal persons and arrangements,” the FATF report said. “To mitigate high-risk activities such as bearer shares and nominee relationships, competent authorities should Quick access to accurate and up-to-date information.”

Are countries successfully addressing money laundering and terrorist financing? A new FATF report provides a comprehensive overview of global efforts to address these issues. The report outlines what is going well and where countries need to improve. See more ➡️ https://t.co/4Te6slGmYF pic.twitter.com/qTPCHpa3r9

— FATF (@FATFNews) April 19, 2022

According to the report, the FATF aims to establish “an effective regulatory and enforcement system with a broad range of regulatory measures” to ensure that VASPs comply with AML and CFT guidelines. The group said its regulation of such companies is aimed at assessing risks and mitigating threats in response to potential illegal transactions.

Related: FATF Brings DeFi to Crypto Service Provider Guidelines

According to FATF guidelines, VASPs operating in certain jurisdictions are required to be licensed or registered. Of the 120 countries monitored, the group identified several in March with “strategic deficiencies” in AML and CFT, including the United Arab Emirates, Malta, the Cayman Islands and the Philippines. Many countries are implementing FATF standards that comply with the organization’s travel rules, which have become a necessity for many crypto and blockchain companies.