New FATF Recommendations
Read about the new FATF recommendations on customer due diligence/beneficial owners
The February 16, 2012 release by the Financial Action Task Force (“FATF”) of newly revised recommendations for anti-money laundering and counter terrorist financing (“AML/CFT”) articulates a more transparently risk-based and integrated process, in which countries, law enforcement officials, regulators and entities are encouraged to cooperate to detect and respond to the movement of illegal proceeds and the funding of terrorist activities. While the new recommendations include a substantial restatement of the original 1990 40 Recommendations as well as the 2001 9 Special Recommendations on Terrorist Financing that they replace, both the new text and, particularly, the new interpretive notes suggest that FATF’s view is that a more systematic approach is the most effective way to fight terrorist and criminal elements that abuse the financial system. This article focuses on the customer due diligence (“CDD”) and risk-based approach contained in the new recommendations document. The article also addresses application of some of the new recommendations in the context of a particular kind of financial institution, securities Broker Dealers.