Photo: Prime Minister of Antigua and Barbuda, the Honourable Gaston Browne addresses participants at the opening of the
CFATF L Plenary and Working Groups meetings held in St. John’s, Antigua and Barbuda during the period 24th -29th November 2019.
St. John’s, Antigua and Barbuda, November 2019 – Outgoing CFATF Chairman, the Honourable Dale Marshall, QC, MP, Attorney General of Barbados chaired the CFATF L Plenary and Working Groups meetings held in St. John’s, Antigua and Barbuda during the period 24th -29th November 2019. This represented the final Plenary over which the Honourable Attorney General presided as he passed the baton to the Honourable Lt. Col. Edward Croft, Director of the Office of National Drug and Money Laundering Control Policy of Antigua and Barbuda. The Honourable Lt. Col. Edward Croft will hold the position of CFATF Chairman for the period November 2019 to November 2020.
The main issues dealt with by this Plenary were:
1. Mutual Evaluations
- Discussion of the mutual evaluation reports (MERs) of Bermuda and the Turks and Caicos Islands: The CFATF Plenary discussed the MERs of Bermuda and the Turks and Caicos Islands which were prepared on the basis of the FATF Methodology for assessment and which set out the level of effectiveness of the country’s AML/CFT system and their level of compliance with the FATF Recommendations. Plenary approved the MERs following discussions at both the CFATF Working Group on FATF Issues (WGFI) meeting and at Plenary. The MERs are now being prepared for the post-Plenary Quality and Consistency (Q&C) process and will be published once the process is concluded.
2. Adoption of Amendments to Procedures
- The FATF in October 2019 revised the “Consolidated Processes and Procedures for Mutual Evaluations and Follow-Up” (Universal Procedures) and as a result the CFATF ICRG Procedures required amendment to ensure alignment with recent amendments.
- Plenary approved the amendments which bolsters and provides greater clarity to the existing Follow-Up Process and ensures consistency with the Universal Procedures as follows:
- Paragraph 11- only NC/PC rated recommendations are eligible for a technical compliance re-rating request;
- Paragraph 11- prohibit re-rating requests where the country’s legal, institutional or operational framework remains unchanged;
- Paragraph 13- even where the revised recommendation was rated LC or C, the country would need to seek a re-rating once the recommendation has changed; and
- New Paragraph 14 provide flexible choices for CFATF to limit and/or simplify the discussion and approval of FURs with TC re-ratings.
- Adoption of amendments to the CFATF Procedures for the Fourth Round of AML/CFT Mutual Evaluations which strengthens the mutual evaluation process with the aim of better quality Mutual Evaluation Reports (MERs).
- The agreed upon amendments to the CFATF Procedures for the Fourth Round of AML/CFT Mutual Evaluations were as follows:
June 2019 amendments to the Universal Procedures:
- Requirement to periodically review the CFATF MEVAL Procedures to identify and address ongoing challenges (Paragraph 1).
- An amendment to note the requirement for FATF to consider the impact of changes on FSRBs when updating the Universal Procedures (Paragraph 4).
- Requirements related to qualifications of CFATF Assessors, assessment teams, and the role of the Secretariat in the evaluation process (new Paragraph 17).
- Requirement to periodically review sufficiency of Secretariat staffing and resource allocation to ensure Mutual Evaluation Reports (MERs) and follow-up work is adequately prioritised (Paragraph 20, previously Paragraph 19).
- Further clarification regarding interaction with the assessed country and the recommendation that assessed countries consider assessed country training and appointing a co-ordinator to be responsible for the mutual evaluation process and serve as point of contact (Paragraph 23, previously Paragraph 21 and Footnote 5).
- Requirement to ensure sufficient time is allowed for translation when needed (Paragraph 34, previously Paragraph 32).
- Recommendation to ensure that the 2nd Draft of an MER is as close to a final MER as possible before circulating to external reviewers and the assessed country (Paragraph 44, previously Paragraph 42).
- Requirement for assessors to respond to substantive comments by external reviewers (Paragraph 50, previously Paragraph 48).
- Clarification that at a minimum, outstanding issues between the assessment team and the country will be addressed through scheduled conference calls or video conferencing and that where there are significant substantive changes to the MER following the face-to-face meeting, the MER may be circulated to external reviewers for targeted review (provided this does not cause undue delay) (Paragraphs 51 and 52, previously Paragraphs 49 and 50 respectively).G
- Guidance on focus of Plenary discussion of MERs and power for assessment bodies to limit the time for discussion to no more than four (4) (Paragraph 59, previously Paragraph 57).
October 2019 amendments:
- Requirements related to the development of the Key Issues Document (KID) (Paragraph 54, previously Paragraph 52.
3. CFATF Counter Financing of Terrorism (CFT) Operational Plan
- The Cayman Islandsmade a presentation of their CFT work in line with the approved CFT Operational Plan adopted at the CFATF XLVII May 2018 Plenary.
4. Updates from the FATF June and October 2019 Plenary working groups meetings
- Outcomes of the FATF June and October 2019 Plenaries were presented at the following CFATF Working Group Meetings: the International Cooperation Review Group (CFATF ICRG), the Working Group on FATF Issues (WGFI), which covers the work of the Policy Development Group (PDG), Global Network Coordination Group (GNCG) and Evaluations and Compliance Group (ECG), the CFATF Risk, Trends and Methods Working Group (CRTMG) and the Heads of FIU Forum.
WGFI reported on the primary outcomes from the FATF June and October 2019 meetings which related to: -
- The revision to the Universal Procedures to include mandatory actions for FSRBs with the intention that these actions assist FSRBs with addressing the challenges faced in the mutual evaluation process and the quality of Mutual Evaluation Reports (ECG);
- The adoption of three Risk-Based Approach Guidance Papers namely for Legal Professionals, Trust and Company Service Providers and the Accounting Professionals (PDG, June 2019);
- Preliminary discussions within PDG on the revision of the Standards on Proliferation Financing, development of guidance on digital identity The revision of the Note on Legal Basis of Requirements to extend requirements to Virtual Asset Service Providers (VASPs), adoption of the Best Practices on Beneficial Ownership for Legal Persons Paper and the PDG upcoming work programme (PDG, October 2019); and
- Challenges faced by FSRBs in the conduct of mutual evaluations, resources of FSRBs to complete the current round of Mutual Evaluations, Regional Counter Terrorism Financing Operational Plans and the Technical Assistance Pilot Project (GNCG, October 2019).
- Revisions to the Methodology based on changes to Recommendation and revisions to the Universal Procedures to improve efficiency with respect to the Follow Up process and emerging issues with the Fifth Year Follow Up Assessment (FFUA) (ECG, October 2019).
Report on Trinidad and Tobago’s Voluntary Tax Compliance Programme
The CFATF Plenary concluded that Trinidad and Tobago complies with all the requirements and approved the “Report on Trinidad and Tobago’s Voluntary Tax Compliance Programme”.
- Discussion of the 10th Follow-up Report for the mutual evaluation of Sint Maarten: the jurisdiction was placed in the 3rd stage enhanced follow up process and a public statement circulated.
- Recommendation 35 cross-cutting issues - Plenary directed the Secretariat to conduct an analysis of the issue and provide a report on this matter at the May 2020 Plenary to determine the next steps.
- Status updates were also provided on the seven (7) CFATF Member jurisdictions in the follow-up process (Trinidad and Tobago, Jamaica, The Bahamas, Barbados, Antigua and Barbuda, the Cayman Islands and Haiti).
- Further to the FATF’s Public Statement issued on 21st June 2019, twelve (12) CFATF Member delegations provided information on the actions taken.
- Outcomes of the FATF ICRG for the June and October 2019 Plenary Meetings were discussed relating mainly to:
- The countries report from the Joint Group of the Americas with an emphasis on the progress reports by Trinidad and Tobago and The Bahamas.
- Jurisdictions meeting the 4th Round referral criteria with the inclusion of the Barbados due to the change in the prioritization criteria and the presentation of Barbados’ and Jamaica’s POPR at the FATF Plenary in February 2020.
CFATF Heads of FIUs’ Forum
- A presentation was made on Virtual Assets was delivered by Briana Kernan of Chainalysis.
- A presentation was made on changes to the FATF Standards (R.15) to capture VAs and VASPs by Mr. Pedro Harry, Law Enforcement Advisor at the CFATF Secretariat.
- Updates were provided on relevant Egmont Group’s projects and initiatives, and
- Reports/Updates were provided by CFATF FIU Members.
CFATF Risk Trends and Methods Group (CRTMG)
Regarding matters discussed at CRTMG, the Plenary:
- Adopted the 2019 money laundering and terrorist financing cases update;
- Approved the publication of the 2019 money laundering and terrorist financing cases update on the CFATF’s website as a public document; and
- Approve the sanitization and publication of the 2018 report on the stocktaking exercise on ‘de-risking’ as a public document on the CFATF website.
5. CFATF Governance
- For the period November 2019/November 2020, the Chairmanship of the CFATF is held by Antigua and Barbuda, represented by Col. Edward Croft, Director of the Office of Drug and Money Laundering Control Policy. The Deputy Chairmanship is held by The Bahamas represented by the Honourable Carl Wilshire Bethel, Q.C. Attorney General and Minister of Legal Affairs. The position of Immediate Past Chair is held by Barbados represented by the Honourable Dale Marshall, QC, MP, Attorney General and Minister of Legal Affairs, which ensures the tripartite governance of the CFATF.