The interagency delegation comprising representatives of Rosfinmonitoring and the Bank of Russia took part in the first meeting of the FATF Supervisory Forum, held on 11-12 November 2019 in Sanya (China) organized under the initiative of Liu Xiangmin, a representative of the People's Bank of China who assumed the office of FATF President on 1 July 2019. Predictably, Liu Xiangmin identified the forum as one of his priorities.
The low effectiveness ratings (Immediate Outcomes 3 and 4 of the FATF Assessment Methodology) granted to FATF member states in the 25 assessments of their AML/CFT systems conducted in the context of organizing supervisory activities added relevance to the Forum. More than 100 delegates from almost 50 countries gathered in Sanya.
Discussions focused on three main areas of AML/CFT efforts: risk-based approach, new technologies and international cooperation. In order to trigger discussions, participants used FATF country reports, as well as insights and best practices of the most advanced supervisors and international institutions specializing in this subject matter.
Among the prevention challenges faced by countries are the lack of proper supervision over reporting entities representing the non-financial sector (as opposed to financial institutions), a disproportionate sanctions regime, gaps in the understanding of the risk-based approach, the imbalance between on- and off-site inspections that fails to address contemporary risks, the lack of human and material resources, and unpreparedness to use modern IT-tools.
Participants displayed keen interest in Russia's experience of using new technologies – personal accounts – for supervisory purposes, the information about which was presented in the form of a separate presentation followed by a video. For this purpose, representative of Rosfinmonitoring V. Zhdanovich was invited to act as a moderator. Given the considerable interest shown by the audience, the Russian delegation proposed to develop and submit to the Secretariat for consideration an e-course for supervisors, an initiative that received the support of the participants.
As a medium-term objective, in the framework of the Forum it is planned to conduct an overview of supervisory and monitoring measures, draft an information note on supervisory tools, collect case studies on the effective use of information technologies, discuss best practices in the application of a risk-based approach, organize video conferences, and study the positive experiences of other supervisors.
The next meeting of the Forum, this time with the participation of supervisory authorities, is scheduled to be held in Vienna in May 2020 either before or after the traditional FATF consultations with the private sector.