The Global Federation of Insurance Associations (GFIA) has responded to a consultation by the Financial Action Task Force (FATF) on its revisions to RATF recommendations for anti-laundering (AML) and counter-terrorism financing (CTF) measures so they are better aligned to promote financial inclusion.
In its responses, GFIA stresses:
- FATF’s proposed replacement of the term “commensurate” with “proportionate” is a shift to clarify the alignment between measures taken and identified risks. GFIA supports this amendment, noting that the use of “proportionate” aligns with the language of the EU Money Laundering Directives, simplifies communication through clearer English, and emphasises measurable actions. However, GFIA cautions against retaining “commensurate” in the definition, as this could create confusion.
- FATF is considering amendments to require supervisors to “review and take into account the risk mitigation measures undertaken by financial institutions/DNFBPs”, an amendment GFIA also supports as it clarifies the requirement for Supervisors to evaluate a firm’s complete residual risk profile after risk mitigation steps have been implemented.
- The proposed shift from “countries may decide to allow simplified measures” to “countries should allow and encourage simplified measures” signals a commitment to creating an enabling environment for lower-risk scenarios. GFIA supports this change but suggests further strengthening this by replacing “should” with “must” to ensure broader adoption of simplified measures, which are critical for balancing compliance efforts with financial inclusion goals.
- The FATF’s proposed recognition of advancements in digital identity systems, particularly for non-face-to-face customer interactions, marks a significant step in modernising AML/CTF frameworks. GFIA agrees that non-face-to-face transactions, often the norm today, should no longer be automatically deemed higher risk. The association calls for further adjustments to lower the risk profile of such interactions given their prevalence.