Countries are required to understand their money laundering and terrorist financing risks as part of the FATF Immediate Outcome 1. They are also expected to coordinate domestic actions and establish mechanisms or bodies to ensure effective cooperation and coordination within their national frameworks. Additionally, they need to implement AML/CFT policies at both policy-making and operational levels.

The EU Global Facility has developed an innovative supporting tool, the Technical Assistance Coordination Committees (TACC), to help partner countries achieve those goals. The TACC assists them in establishing a body and associated mechanisms to coordinate and structure all technical assistance activities. The TACC also seeks to strengthen compliance with the FATF’s International Cooperation Review Group (ICRG) requirements, based on the experience acquired by other countries during the ICRG process. The outcome of the strategic approach programme has an impact across all components of the EU Global Facility.

On the topic of Correspondent Banking, the EU Global Facility helps jurisdictions to better understand FATF Recommendation 13 and EU best practices, notably with regards to customer due diligence measures in cross-border correspondent relationships compared to domestic ones.

Through regional conferences centered on the reinforcement of public private partnership coordination and knowledge sharing, the project provides comprehensive support on the issue of de-risking (causes and consequences), and the main drivers behind the termination of correspondent banking relationships.

The EU Global Facility creates platform bringing together industry representatives -such as SWIFT and the Wolfsberg Group-, correspondent and respondent banks, supervisory authorities from partner countries and EU member states, along with FIUs. On these unified platforms, relevant stakeholders address the challenges faced by correspondent banks, highlighting the practical roles, tools, and solutions available for supervisors to design and implement risk-based supervision strategies. Additionally, the EU Global Facility facilitates exchanges of good practices on the practical expectations from FIUs in receiving, analysing, and disseminating suspicious transaction reports related to correspondent banking.

These exchanges also serve to discuss the issues that law enforcement agencies face in conducting investigations on financial crimes involving correspondent banking relationships, including relevant typologies and their consequences.

Interested to learn more? Read our blog article about this.

Our strategy for remedying the actions expected by the FATF on Targeted Financial Sanctions (Recommendations 6 & 7 and Immediate Outcomes 10 & 11) focuses on two main areas: strengthening technical compliance and enhancing efficiency.

The first phase involves conducting a gap analysis of the existing laws to ensure compliance with Recommendation 6 (targeted financial sanctions related to the fight against terrorism financing) and Recommendation 7 (proliferation-related targeted financial sanctions). This includes identifying competent authorities, defining obligations for reporting frozen assets, communicating designations, protecting bona fide third parties, and establishing access to frozen funds. Additionally, training sessions are provided by the EU Global Facility to enhance understanding of the obligations under United Nations Security Council Resolutions and the role of TFS in combating terrorism financing and nuclear proliferation.

Once technical compliance work is completed, the second phase focuses on efficiency enhancement. This includes implementing operational processes to make the adopted legal framework operational, such as identifying targets, communicating lists, withdrawing lists, and unfreezing funds. It also involves setting up processes for monitoring and reporting frozen assets to comply with the FATF’s request for statistics.

Efforts are also made to raise awareness among supervisors and the private sector to ensure effective application of targeted financial penalties.

Overall, the strategy aims to strengthen the country’s capacity to implement targeted financial sanctions by establishing dedicated institutional frameworks, enhancing monitoring processes for frozen assets, and promoting compliance awareness among relevant authorities and the private sector.

Cryptocurrencies have drastically evolved in the past years, with their different types and models. In particular, the virtual assets ecosystem has seen the rise of anonymity-enhanced cryptocurrencies, mixers and tumblers, decentralised platforms and exchanges, privacy wallets, and other types of products and services that enable or allow for reduced transparency and increased obfuscation of financial flows. They also lead to the emergence of other virtual asset business models or activities such as initial coin offerings (ICOs) that present ML/TF, fraud and market manipulation risks.

Given the development of additional products and services and the introduction of new types of providers in this space, the FATF recognised the need for further clarification on the application of the FATF Standards to new technologies and providers. The effective global implementation of these standards by all countries will ensure virtual asset technologies and businesses can continue to grow and innovate in a responsible way, creating a level playing field. It will also prevent criminals or terrorists from seeking out and exploiting jurisdictions with weak or no supervision.

In light of this rapid evolution, the EU Global Facility assists countries in navigating the complex landscape of Virtual Assets by facilitating the assessment of whether to ban or regulate them. This evaluation is conducted through a comprehensive national risk assessment. Following this decision, the project supports its implementation process by tailoring national supervisory programmes through effective public-private partnerships. Additionally, the EU Global Facility aids in strengthening the investigative capabilities of countries, enabling them to effectively analyse suspicious transaction reports (STRs) and conduct financial investigations related to VAs.

There are four outcome areas that the EU Global Facility seeks in the development of cryptocurrencies framework. They are designed to identify and address specific issues in a particular context while also supporting processes of collective learning and problem solving in the face of common challenges.

1. Assessing the risks related to cryptocurrencies and their service providers;
2. Supervision regarding Virtual assets service providers;
3. Investigating and tracing virtual assets; and
4. Seizure and confiscation of virtual assets, and their management.

On middle-long term, the EU Global Facility will develop a methodology aimed at:

• Partnering with countries to better understand the VA environment and, ultimately, decide to either approve or ban VAs.
• Helping partner countries in identifying and equipping themselves with the tools to conduct their own Risk Assessment (RA) on VA.
• Supporting countries in their VAs investigations and eventually seizure and confiscation.

As of September 2024, the project has supported Algeria, Argentina, Botswana, Jordan, Morocco, Panama, Trinidad and Tobago and the United Arab Emirates in developing their virtual assets framework.