There is a serious need to improve the effectiveness of states’ action against money laundering and terrorist financing, concludes the Council of Europe’s anti-money laundering and counter terrorist financing body MONEYVAL in its annual report for 2020, released on 4 June 2021. The report finds that the states and jurisdictions evaluated by MONEYVAL on average show a moderate level of effectiveness in their efforts to combat money laundering and terrorist financing. As a consequence, on average, their level of compliance with anti-money laundering and counter terrorist financing (AML/CTF) standards is below satisfactory. These are the key preliminary conclusions of a horizontal review of the implementation of Financial Action Task Force (FATF) recommendations by 19 MONEYVAL members/jurisdictions currently underway.
Elżbieta Frankow-Jaśkiewicz, Chair of MONEVYAL, said: “During 2020 MONEYVAL members continued the development of their legal and institutional frameworks to combat money laundering and terrorist financing, despite Covid-19. However, further efforts are indispensable to ensure the effectiveness of these frameworks to counter criminals aiming to launder the proceeds of their crimes or to fund terrorist attacks”.
“Criminals all over the world have found new ways to abuse the financial system by committing cybercrimes, engaging in fraudulent investment schemes, selling counterfeit medicines and exploiting the public health procurement sector. We must address the new and emerging risks and challenges stemming from the pandemic, notably the increase in online operations and in the use of virtual currencies”, she added.
The annual report points out that risk assessments, international cooperation and the use of financial intelligence are the areas where MONEYVAL members obtain higher compliance ratings. A positive development is that 90% of jurisdictions regularly pursue international cooperation via mutual legal assistance and information exchanges.
Effectiveness is particularly weak in the supervision of the financial sector, private sector compliance, transparency of legal persons, as well as in convictions for money laundering offences and confiscations of assets, which remain very low. The report also identifies serious shortcomings in respect of financial sanctions for terrorism and proliferation of weapons of mass destruction.
By the end of 2020, 16 of the 19 jurisdictions evaluated by MONEYVAL in the 5th round of mutual evaluations were subject to its enhanced follow-up procedure for their insufficient level of compliance with AML/TF standards: Albania, Andorra, Cyprus, the Czech Republic, Georgia, Gibraltar, Hungary, Latvia, Lithuania, Malta, Republic of Moldova, Serbia, Slovakia, Slovenia, the UK Crown Dependency of the Isle of Man and Ukraine. Armenia, Israel and the Russian Federation (the latter two countries were jointly evaluated by the FATF and MONEYVAL) are subject to MONEYVAL’s regular follow-up procedure.
