Page 3 - 20200513 Newsletter - 07042020 Final

Volume 3, Edition 1 Chatterbox 07/04/2020

Part Two: Regulatory Response In Focus: FATF

Plenary Round Up
(February 2020)
United Kingdom

High-risk jurisdictions subject to
a call for action
High-risk jurisdictions have
significant strategic deficiencies
in their regimes to counter money
laundering, terrorist financing, and
financing of proliferation.
The FATF calls on all members
Proposal for a levy to tackle financial markets, property sector and financial and urges all jurisdictions to
crime services. It is hoped that the ECL will apply enhanced due diligence,
generate much needed resources and in the most serious cases,
Plans are afoot for a new Economic for law enforcement to invest in countries are called upon to apply
Crime Levy (ECL) to be introduced new technologies and more financial counter-measures to protect the
to raise money to support the fight investigators to help turn the tide. international financial system from
the ongoing money laundering,
against crime and dirty money. A consultation on this levy is expected terrorist financing, and proliferation
It is well-known that the UK, London during 2020 with the levy coming into financing (ML/TF/PF) risks
in particular, is susceptible to washing force 2022/3. emanating from the country.
the proceeds of international crime This list is often externally referred
and acts as a magnet and haven to https://www.reuters.com/article/ to as the “black list” and includes
corrupt foreign money. us-britain-budget-levy/uk-plans-levy- Democratic People’s Republic of
There are no reliable estimates, on-banks-and-others-to-help-tackle- Korea (DPRK) and Iran.
but it is suspected that significantly money-laundering-idUSKBN20U0ZE
more than £100 billion a year is Jurisdictions under Increased
being laundered through the capital Monitoring
(previously called Improving Global
AML/CFT Compliance: On-going
FCA Supervision Reports and Updates process)
The list includes countries that are
actively working with the FATF to
address strategic deficiencies in
their regimes to counter money
laundering, terrorist financing, and
proliferation financing.
This list is often externally referred
to as the ‘grey list’ and now has
eighteen jurisdictions listed including
Sector Views: AI & Big Data consumers in some insurance and Iceland!
affordable credit products. The
The FCA currently has its eye on Big groups likely most affected would be https://www.fatf-gafi.org/publications/
Data and AI and how firms use data. the more vulnerable or lower income high-risk-and-other-monitored-jur
A key area of concern is unfair pricing groups. isdictions/?hf=10&b=0&s=desc(fa
for insurance and credit products. tf_releasedate)
Unethical use of data can also create
Firms’ have the ability to personalise new forms of unfair pricing or
pricing and there is concern that algorithmic bias, and could exclude
reduced risk pooling could lead vulnerable consumers...
to financial exclusion for some

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