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
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
"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.
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Contact: Jennifer Bernhardt
Organization: World Council of Credit Unions
E-mail: [email protected]