INTERNATIONAL STANDARDS ON COMBATING …

1 INTERNATIONAL STANDARDS ON COMBATING money laundering AND THE financing OF terrorism & PROLIFERATIONThe fatf RecommendationsUpdated February 2018 FINANCIAL ACTION TASK FORCE The Financial Action Task Force ( fatf ) is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering , terrorist financing and the financing of proliferation of weapons of mass destruction. The fatf recommendations are recognised as the global anti- money laundering (AML) and counter-terrorist financing (CFT) standard.

2 For more information about the fatf , please visit the website: This document and/or any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of INTERNATIONAL frontiers and boundaries and to the name of any territory, city or area. Citing reference: fatf (2012-2018), INTERNATIONAL STANDARDS on COMBATING money laundering and the financing of terrorism & Proliferation, fatf , Paris, France, 2012-2018 fatf /OECD. All rights reserved. No reproduction or translation of this publication may be made without prior written permission.

3 Applications for such permission, for all or part of this publication, should be made to the fatf Secretariat, 2 rue Andr Pascal 75775 Paris Cedex 16, France (fax: +33 1 44 30 61 37 or e-mail: INTERNATIONAL STANDARDS ON COMBATING money laundering AND THE financing OF terrorism & PROLIFERATION THE fatf recommendations ADOPTED BY THE fatf PLENARY IN FEBRUARY 2012 Updated February 2018 THE fatf recommendations INTERNATIONAL STANDARDS ON COMBATING money laundering AND THE financing OF terrorism & PROLIFERATION 2012-2018 3 CONTENTS List of the fatf recommendations 4 Introduction 6 fatf recommendations 9 Interpretive Notes 29 Note on the legal basis of requirements on financial institutions and)

4 DNFBPs 108 Glossary 110 Table of Acronyms 125 Annex I: fatf Guidance Documents 126 Annex II: Information on updates made to the fatf recommendations 127 THE fatf recommendations INTERNATIONAL STANDARDS ON COMBATING money laundering AND THE financing OF terrorism & PROLIFERATION 4 2012-2018 THE fatf recommendations Number Old Number1 A AML/CFT POLICIES AND COORDINATION 1 - Assessing risks & applying a risk-based approach * 2 National cooperation and coordination B money laundering AND CONFISCATION 3 & money laundering offence * 4 Confiscation and provisional measures * C TERRORIST financing AND

5 financing OF PROLIFERATION 5 SRII Terrorist financing offence * 6 SRIII Targeted financial sanctions related to terrorism & terrorist financing * 7 Targeted financial sanctions related to proliferation * 8 SRVIII Non-profit organisations * D PREVENTIVE MEASURES 9 Financial institution secrecy laws Customer due diligence and record keeping 10 Customer due diligence * 11 Record keeping Additional measures for specific customers and activities 12 Politically exposed persons * 13 Correspondent banking * 14 SRVI money or value transfer services * 15 New technologies 16 SRVII Wire transfers * Reliance, Controls and Financial Groups 17 Reliance on third parties * 18 & Internal controls and foreign branches and subsidiaries * 19 Higher-risk countries * Reporting of suspicious transactions 20 & SRIV Reporting of suspicious transactions * 21 Tipping-off and confidentiality Designated non-financial Businesses and Professions (DNFBPs) 22 DNFBPs: Customer due diligence * 23 DNFBPs.

6 Other measures * THE fatf recommendations INTERNATIONAL STANDARDS ON COMBATING money laundering AND THE financing OF terrorism & PROLIFERATION 2012-2018 5 E TRANSPARENCY AND BENEFICIAL OWNERSHIP OF LEGAL PERSONS AND ARRANGEMENTS 24 Transparency and beneficial ownership of legal persons * 25 Transparency and beneficial ownership of legal arrangements * F POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES AND OTHER INSTITUTIONAL MEASURES Regulation and Supervision 26 Regulation and supervision of financial institutions * 27 Powers of supervisors 28 Regulation and supervision of DNFBPs Operational and Law Enforcement 29 Financial intelligence units * 30 Responsibilities of law enforcement and investigative authorities * 31 Powers of law enforcement and investigative authorities 32 SRIX Cash couriers * General Requirements 33 Statistics 34 Guidance and feedback Sanctions 35 Sanctions G INTERNATIONAL COOPERATION 36 & SRI INTERNATIONAL instruments 37 & SRV Mutual legal assistance 38 Mutual

7 Legal assistance: freezing and confiscation * 39 Extradition 40 Other forms of INTERNATIONAL cooperation * 1. The old number column refers to the corresponding 2003 fatf Recommendation. * recommendations marked with an asterisk have interpretive notes, which should be read in conjunction with the Recommendation. Version as adopted on 15 February 2012. THE fatf recommendations INTERNATIONAL STANDARDS ON COMBATING money laundering AND THE financing OF terrorism & PROLIFERATION 6 2012-2018 INTRODUCTION The Financial Action Task Force ( fatf ) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions.

8 The mandate of the fatf is to set STANDARDS and to promote effective implementation of legal, regulatory and operational measures for COMBATING money laundering , terrorist financing and the financing of proliferation, and other related threats to the integrity of the INTERNATIONAL financial system. In collaboration with other INTERNATIONAL stakeholders, the fatf also works to identify national-level vulnerabilities with the aim of protecting the INTERNATIONAL financial system from misuse.

9 The fatf recommendations set out a comprehensive and consistent framework of measures which countries should implement in order to combat money laundering and terrorist financing , as well as the financing of proliferation of weapons of mass destruction. Countries have diverse legal, administrative and operational frameworks and different financial systems, and so cannot all take identical measures to counter these threats. The fatf recommendations , therefore, set an INTERNATIONAL standard, which countries should implement through measures adapted to their particular circumstances.

10 The fatf recommendations set out the essential measures that countries should have in place to: identify the risks, and develop policies and domestic coordination; pursue money laundering , terrorist financing and the financing of proliferation; apply preventive measures for the financial sector and other designated sectors; establish powers and responsibilities for the competent authorities ( , investigative, law enforcement and supervisory authorities) and other institutional measures; enhance the transparency and availability of beneficial ownership information of legal persons and arrangements; and facilitate INTERNATIONAL cooperation.