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WOCCU - World Council of Credit Unions : Anti-Money Laundering Standards to Expand Definition of Politically Exposed Persons, New Payment Methods in 2013

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09/18/2012 | 12:25am CEST
World Council presents credit union perspective concerning forthcoming Financial Action Task Force guidance on domestic politically exposed persons, mobile payments, prepaid debit cards and remittances

The Banco de España in Madrid, Spain, (pictured above)  hosted a FATF conference on new AML standards last week. World Council presented on behalf of the international credit union movement at the event. 

MADRID - World Council of Credit Unions last week made recommendations to the Financial Action Task Force (FATF) on how to limit regulatory burdens on credit unions in the FATF's forthcoming guidance papers on anti-money laundering (AML) standards. The new standards will expand the international AML definition of politically exposed persons (PEPs) to include domestic and international organization PEPs, as well as update existing FATF guidance on new payment methods (NPMs). 

National anti-money laundering authorities are expected to issue regulations to implement the new FATF PEPs and NPMs guidance next year. At that time, credit unions will be required to assess whether new and existing credit union members include high-ranking national, provincial or local politicians and civil servants, or high-ranking officials at international organizations such as the United Nations, World Bank and International Monetary Fund. Credit union AML compliance procedures regarding NPMs, such as prepaid debit cards, mobile payments and remittances will also need to adjust to the new standards.


World Council's Michael Edwards (pictured above) made recommendations on how the new AML guidance could ease regulatory burdens on credit unions.

In February 2012, FATF issued a revised set of its International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, better known as the "40 Recommendations," which expanded the definition of PEPs to include domestic and international organizations. Prior to the update, the definition had only applied to foreign PEPs, meaning high-ranking officials in foreign governments, and credit union common bond requirements generally limited credit unions' PEP-related compliance burdens. Under the new standards, even high-ranking officials in local governments, such as mayors or members of local government councils, are likely to be considered PEPs. The anticipated FATF guidance papers will clarify in detail the high-level principles on PEPs and NPMs.

"Although many larger banks and credit unions currently use expensive software and vendor lists to determine who is a PEP, we related to FATF that many credit unions would be well aware of the high-ranking political officials in their local communities without needing to invest in possibly unaffordable vendor products," said Michael Edwards, World Council's chief counsel and vice president for advocacy and government affairs, who represented credit unions at the conference.

While at the conference, Edwards also shared the credit union perspective on using new payment methods to promote financial inclusion as part of an effective risk-based approach to AML compliance, which focuses on payments with the highest risk of being related to criminal activity, terrorism or nuclear proliferation.

"World Council participates in forums such as these to advocate for streamlined anti-money laundering procedures for credit unions," said Brian Branch, World Council president and CEO. "Our goal is to help credit unions provide wider access to financial services and to reduce their regulatory burden for serving the underserved."

FATF is the international standard-setting body for rules to combat money laundering and the financing of terrorism and nuclear proliferation. World Council contributed its remarks during a FATF conference, Sept. 13-14, at the Banco de España in Madrid, Spain. The event was part of FATF's private sector outreach in preparation for issuing new guidance on PEPs and NPMs in early 2013. 



World Council of Credit Unions (WOCCU) is the global trade association and development agency for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.

World Council has implemented more than 290 technical assistance programs in 71 countries. Worldwide, 51,000 credit unions in 100 countries serve 196 million people. Learn more about World Council's impact around the world at www.woccu.org.


NOTE: Click on photos to view/download in high resolution.

Contact: Jennifer Bernhardt
Organization: World Council of Credit Unions
E-mail: [email protected]
Phone: +1-608-395-2077


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