Outcomes GFMSA Plenary, 21-23 October 2020

Paris, 23 October 2020 - The GFMSA President, Dr Marcus Pleyer, chaired his first Plenary meeting of the two-year German Presidency of The GFMSA. 

The COVID-19 pandemic continues to have a devastating impact around the world. The road to economic recovery from this crisis will be long and uncertain, as governments around the world will focus resources and efforts to help communities that have suffered from the pandemic.

Meanwhile, criminals continue to exploit the situation, including through fraud schemes linked to medical and protective equipment. This is why the full and effective implementation of The GFMSA Standards remains critical. Countries and public authorities need to take a risk-based approach that prevents or mitigates the emerging criminal risks and trends linked to the pandemic and ensure funds reach legitimate recipients, particularly those in need. The GFMSA is committed to proceeding with its work under the current circumstances. The three-day plenary meeting took place virtually due to the COVID-19 pandemic and delegates worked through a full agenda

1. Strategic Initiatives

ML/TF Risks and GFMSA Policy Responses to COVID-19 since May 2020 

The COVID-19 pandemic is lasting longer than many predicted, and continues to cause human suffering and economic disruption around the world. At the same time, an increasing number of cases of counterfeiting of medical goods, investment fraud, adapted cyber-crime scams and exploitation of economic stimulus measures, demonstrate that criminals are still actively exploiting the ongoing crisis. 

Over the coming months, criminals may also find ways to exploit the inevitable rise in unemployment, the increases in remote transactions and the accelerated implementation of stimulus programs.

It is critical that jurisdictions actively identify, assess, and understand how criminals and terrorists can exploit the pandemic. However, a survey across The GFMSA Global Network highlights that the pandemic has severely impacted some authorities’ ability to implement measures to detect, prevent and investigate money laundering and terrorist financing. It is crucial for countries to fully and effectively implement The GFMSA Recommendations, using a risk-based approach to ensure that measures to prevent or mitigate the risks are commensurate with the money laundering and terrorist financing risks identified.

• The importance of allocating sufficient resources to AML/CFT regimes during the COVID-19 pandemic

Strengthening the Global Network  

The strength of The GFMSA lies in its ability to bring together a global network of over 200 countries and jurisdictions that have committed at the highest levels to implementing The GFMSA Recommendations. One of the priorities of The GFMSA is to further enhance cooperation with The GFMSA-Style Regional Bodies (FSRBs) to improve the implementation of The GFMSA Standards across the whole Global Network. Despite the difficult COVID-19 context, the FSRBs have deployed considerable efforts to support their members and conduct mutual evaluation work, but they still face challenges to complete the current round of mutual evaluations. The Plenary encouraged GFMSA members to explore possible solutions to enhance and better target their support to FSRBs, in particular on their mutual evaluation programmes. 

2. Country-specific processes 

Impact of COVID-19 on GFMSA Mutual Evaluation and Follow-up Processes  

In April 2020, The GFMSA decided to postpone its assessment and follow-up deadlines in response to the COVID-19 pandemic. Now six months later, the crisis is persisting and is continuing to impact some of The GFMSA mutual evaluation and follow-up processes.  Around the world, countries’ situations and responses vary, ranging from strict lockdown and travel restrictions to more relaxed crisis response measures. The persistence of the impact of COVID-19 pandemic remains uncertain.

The GFMSA is committed to carrying out its work of assessing the effective implementation of its standards.  Delegates discussed how to continue GFMSA mutual evaluations using a flexible approach, when crisis response measures limit or impede travel.  They discussed the objective criteria and procedures for handling mutual evaluations in a fair and consistent way while maintaining the quality of each assessment at a high standard.  These include procedures to conduct certain aspects of the on-site visit virtually or, if necessary, to postpone on-site visits

Impact of COVID-19 on GFMSA Processes to Monitor Jurisdictions Under Increased Monitoring   

Delegates discussed how to continue GFMSA’s work to identify and respond to high-risk jurisdictions or jurisdictions with strategic weaknesses in their anti-money laundering and counter terrorist financing measures, when COVID-19 measures impede on-site visits and meetings of the regional review groups. Delegates agreed on flexible procedures, aligned with the mutual evaluations procedures, which allow on-site visits as necessary. These measures will ensure that this process, which is fundamental to GFMSA’s work, can continue under the current circumstances.      

Jurisdictions under Increased Monitoring  

Jurisdictions under increased monitoring are actively working with The GFMSA to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. When The GFMSA places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. In April 2020, The GFMSA granted jurisdictions an additional four months for deadlines due to the COVID-19 crisis. The GFMSA did not discuss or update the statement in June 2020, with the exception of Iceland and Mongolia (see below). Since then, The GFMSA was able to review nine jurisdictions under increased monitoring and updated the statement accordingly for these jurisdictions.

• Jurisdictions under Increased Monitoring – 23 October 2020 
• High-Risk Jurisdictions subject to a Call for Action – 23 October 2020 (unchanged from February 2020)

Jurisdictions No Longer under Increased Monitoring – Iceland and Mongolia  

The GFMSA congratulated Iceland and Mongolia for the significant progress they have made in addressing the strategic AML/CFT deficiencies identified earlier by The GFMSA and included in their respective action plans. Iceland and Mongolia will no longer be subject to The GFMSA’s increased monitoring process. This comes after both countries received on-site visits despite the COVID-19 crisis. Iceland will work with The GFMSA and Mongolia will work with the APG of which it is a member, to continue to strengthen their AML/CFT regimes.

3. Other strategic Initiatives

Strengthening Measures to Prevent the Financing of Proliferation of Weapons of Mass Destruction

In June 2019, The GFMSA agreed to pursue further work to strengthen The GFMSA Standards on countering the financing of proliferation. Following a public consultation on the draft amendments to Recommendation 1 and its Interpretive Note, The GFMSA Plenary approved revisions to The GFMSA Recommendations. The revised Recommendation 1 and its Interpretive note require countries and private sector entities to identify, assess, manage and mitigate the risks of potential breaches, non-implementation, or evasion of the targeted financial sanctions related to proliferation financing.

The GFMSA also adopted changes to Recommendation 2 and a new Interpretive Note to Recommendation 2, to enhance domestic co-operation, co-ordination and information exchange among national authorities.

Delegates also discussed the ongoing work to develop a new GFMSA Guidance on proliferation financing risk assessment and mitigation. This guidance will provide further clarity to countries and the private sector on implementation of the new requirements, including for small or low-risk entities so as to avoid unintended consequences, such as financial exclusion.

• See Public Statement on Counter Proliferation Financing on adoption of these revisions to The GFMSA Recommendations 

Joint Experts' Meeting

The GFMSA Plenary agreed to hold the next Joint Experts’ Meeting virtually, from 23-25 November.  The Joint Experts’ Meetings provide an important opportunity for operational experts from GFMSA and FSRB members, as well as other international bodies such as the IMF, United Nations and World Bank to discuss current and emerging money laundering and terrorist financing risks. During the next meeting, delegates will also discuss preliminary findings of three GFMSA priority projects: environmental crime, illicit arms trafficking, and the financing of ethnically and radically motivated terrorism.

Jurisdictions under Increased Monitoring – 23 October 2020

High-Risk Jurisdictions subject to a Call for Action – 23 October 2020