The consultation marks the second such call by the intergovernmental organization, which in July announced planned revisions to its Recommendation 1 and a related Interpretative Note to mandate that would ask countries to identify and assess the proliferation financing risks of other jurisdictions on an ongoing basis, assist competent authorities with addressing such risks and inform financial institutions and other designated businesses of their findings.
The guidance would also require banks and other institutions to amend their risk assessments and compliance controls to better identify and report transactions that are potentially linked to arms trafficking.
FATF’s latest consultation seeks input from financial institutions and designated non-financial businesses and professions (DNFBPs) on draft guidance published Tuesday. The intergovernmental organization is calling on stakeholders to review the draft and respond to the following questions by 9 April:
* Does the Guidance provide sufficient clarity in distinguishing the mandatory requirements of the updated FATF Standards on proliferation financing risk assessment and mitigation, and additional measures that may support the implementation of these new requirements?
* Do you consider the four categories of risk indicators (including a sectoral focus on the maritime sector and trade finance) relevant, useful, and sufficient for your understanding of the risk of potential breach, non-implementation of evasion of proliferation financing targeted financial sanctions in the context of FATF Recommendation 7? What other indicators could be included in this section?
* Does the risk mitigation section of the Guidance provide sufficient clarity on how financial institutions and DNFBPs can address the risk of potential breach, non-implementation and evasion of targeted financial sanctions? What specific risk mitigation measures do you take to address such risks?
* Does the Guidance set clear expectations for financial institutions and DNFBPs in case of high-risk and low-risk customers and business relationships, including likely impact on de-risking and financial inclusion?
Read the Public Consultation on FATF Guidance on Proliferation Financing Risk Assessment and Mitigation here