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Protecting Mobile Money against Financial Crimes
3. The FATF identifies financial institutions to be covered by AML/CFT requirements on the basis of the activities or operations that are carried out in those institutions. 4. It should be noted, however, that some mobile operators are obtaining banking licenses that enable them to provide a wider range of financial services. The banking license application process is much more complex than for an emoney license. This justifies strict guidelines and strict procedures that ensure that MNO applicants are screened as rigorously as any other applicant for a banking license. 5. Other risks to consider include delivery channel risks and provider-related risks—for example, the nature of the business, its size, and the nature of the client relationship. 6. Some countries have even been challenging the risk-based approach because it does not really address the particularities of low-capacity countries. 7. There are two conditions that must be met to enable the partial or total exemption of certain financial activities from AML/CFT obligations. It can be done (1) in strictly limited and justified circumstances and (2) when there is a proven low risk of money laundering. The FATF is working on elaborating further guidance in that area. 8. Here, we refer to the type of remittance services that are registered and monitored, as prescribed by FATF Special Recommendation VI. 9. This approach, however, requires a detailed assessment of risks. 10. Note that the FATF does not allow simplified measures in cases where there is a suspicion of money laundering or financing of terrorism. 11. See FATF (2008) for an identification of key recommendations for implementation by low-capacity countries. 12. Some countries, however, are considering subjecting retail outlets to AML/CFT through direct legal obligations. 13. If retail outlets are not directly regulated or indirectly regulated, as proposed in this book, there may be no legal basis for the supervisor to perform on-site visits to the retailer network. Countries should carefully consider this aspect. 14. Depending on the way it is structured, such a solution might prove costly, thereby increasing the overall cost of compliance. 15. According to fieldwork and information from CGAP, the Russian State Duma included representatives of all relevant public bodies when it created its branchless banking working group: the Ministry for Information Technologies and Communication, the Ministry of Finance, the Ministry of Economic Development, and relevant units of the Russian central bank. 16. In some jurisdictions, the FIU is the only authority vested with the power to supervise financial institutions for AML/CFT compliance, while the primary supervisors deal with the oversight of other types of prudential risks.