World Council Comments on New Global PEPs and Payments AML Standards
World Council engages the Financial Action Task Force regarding upcoming international anti-money laundering guidance on prepaid cards, remittances, mobile payments, Internet payments and domestic politically exposed persons
April 29, 2013
The FATF private sector consultative forum was held at HSBC's London headquarters (above) on Canary Wharf last week. World Council made recommendations to limit credit union regulatory burden related to anti-money laundering compliance.
LONDON — 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 for politically exposed persons (PEPs) and new payment products and services (NPPS). Michael Edwards, World Council vice-president and chief counsel, and Sabrina Kellenberger, Credit Union Central of Canada senior manager of regulatory policy, represented credit unions at the FATF private sector consultative forum, which was held at HSBC's London headquarters on Canary Wharf.
In February 2012, the FATF issued a revised set of International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, better known as "40 Recommendations," which expanded the definition of PEPs to include domestic and international organizations and provided new risk-based NPPS standards. In February 2013, FATF issued a detailed guidance paper on Anti-Money Laundering and Terrorist Financing Measures and Financial Inclusion, which is similar in scope to its upcoming NPPS and PEPs guidance papers.
On Monday, World Council followed up the comments made at the London consultative forum with a written comment letter to the FATF regarding its draft NPPS guidance paper. The comment letter supported the FATF's approach in general but urged several technical changes to the NPPS guidance in order to help credit unions continue to promote financial inclusion of the unbanked using NPPS such as prepaid debit cards, mobile payments, workers' remittances and Internet-based payments. The FATF may release the NPPS guidance as early as this summer. Credit union AML compliance procedures regarding NPPS will need to adjust to the new standards once national regulators issue rules to implement the international guidance.
The forthcoming FATF guidance paper on PEPs will provide a framework for expanding the international AML definition of PEPs to include domestic and international organization PEPs. The PEPs guidance paper may be released by the end of 2013. When national authorities issue rules to implement the expanded PEPs definition, credit unions will likely need 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.
"World Council's advocacy efforts help credit unions and their members all over the world," said Brian Branch, World Council president and CEO, "since through our work, international financial regulatory standards have already been subject to consultation with the credit union movement by the time they trickle down to the national level."
Download World Council's FATF comment letter at www.woccu.org/positionpapers.
World Council of Credit Unions 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 300+ technical assistance programs in 89 countries. Worldwide, 68,882 credit unions in 109 countries serve 235 million people. Learn more about World Council's impact around the world at www.woccu.org.