Friday, July 11, 2014
EXPECTATIONS OF APG FORTHCOMING AML/CFT MUTUAL EVALUATIONS
The Asia Pacific Group on Money Laundering (APG), an associate of the Financial Action Task Force will be conducting a fourth round of mutual evaluations for its members based on the New FATF Recommendations (2012). In line with these new Recommendations, FATF has recently published a new guideline entitled "PROCEDURES FOR THE FATF FOURTH ROUND OF AML/CFT MUTUAL EVALUATIONS". Essentially, the guidebook details out (i) the Methodology to be used for Assessing Compliance with the FATF New Recommendations and (ii) the Analysis Effectiveness of AML/CFT Systems (2013). Malaysia as a country is expected to undergo the APG Mutual Evaluation in August 2014. As set out in the Methodology segment of the Guidebook, the scope of the evaluations will involve two inter-related components for technical compliance and effectiveness. The technical compliance component will assess whether the necessary laws, regulations or other required measures are in force and effect, and whether the supporting AML/CFT institutional framework is in place. The effectiveness component will assess whether the AML/CFT systems are working, and the extent to which the country is achieving the defined set of outcomes. A country's level of compliance is generally categorized into four (4) levels namely "C = Full Compliant", "LC= Largely Compliant", "PC = Partial Compliant" and "NC = Non-Compliant". Simplistically, a country's score is considered "good" if its number of "Full Compliant" and "Largely Compliant" is at least 70% of the total 40 Recommendations.