The FATF Supervisor’s Forum took place on 11-12 November 2019 in Sanya, China aiming at improving the effectiveness of supervision. The Forum is an initiative of the Chinese Presidency of FATF to promote more effective supervision by national authorities.
The Forum was chaired by FATF President, Mr. Xiangmin Liu and attended by approximately 100 senior financial and professional supervisors from over 40 countries
The FATF President has put strengthen on the essential role that supervisors play in the anti-money laundering/combatting financing of terrorism regime. As a matter of fact, supervisors’ role is to identify, address and mitigate the ML/TF risks in the financial and non-financial businesses and professions.
Implementing effective risk-based supervisory regimes is one of the major challenges faced by countries. Participants during the forum have shared their knowledge and experience on common challenges as well as good practices and initiatives addressed to them. The Forum has identified three main areas for action as follows:
* Risk-based supervision: A risk-based approach means that supervisors understand the ML/TF risks, and take the appropriate action to mitigate them. This flexibility allows for a more efficient use of resources, and a dynamic approach to changing threats. The Forum identified the most significant challenges countries face in applying a risk-based approach to supervision and discussed how to overcome these.
* New technology: The increasing use of new technologies to enhance AML/CFT compliance in the private sector, such as advanced analytic tools, brings new challenges for supervisors. They need to exercise effective oversight over how these new technologies are used. There are also new technologies available for supervision, in particular transforming supervisory data to sharpen risk assessment, as well as improving the supervision process. The Forum discussed how supervisors can best leverage the opportunities brought by new technologies.
* International cooperation among supervisors: Cooperation between national supervisors plays a key role in mitigating cross-border ML/TF risks. The Forum considered how to enhance and improve the effectiveness of cross-border supervision.
This initial meeting of the Supervisors’ Forum identified a number of areas that require further actions which will be taken forward at the FATF Plenary and at further meetings of the Supervisors’ Forum, to be held in May 2020.