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Key Issues for Consideration during Mutual Assessments
How does the supervisor ascertain whether the necessary AML/CFT training is provided and whether suspicious transactions are identified and reported correctly? • When conducting oversight, do supervisors also have access to personally identifiable information that includes the CDD particulars and documents of customers, m-money account balances, correspondence, and other materials? • Is every party to the m-money business model subject to sanction or other enforcement measures if they are in breach of an AML/CFT obligation?
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Notes 1. FATF methodology (2009) is a tool to assist assessors in determining whether countries are compliant with the FATF recommendations. 2. Other electronic means that favor access to finance (such as prepaid cards and automated teller machines) are not addressed in this section. 3. For an example of this complementarity, see FATF/ESAAMLG (2009) and its discussion of Mzansi accounts: “The advent of this product has brought millions of new customers into the formal banking system and has, in effect, expanded the reach of South Africa’s AML/CFT regime” (p. 100). 4. Studies such as the International Monetary Fund’s Financial Access Survey (http://fas.imf.org/) and the Consultative Group to Assist the Poor’s Financial Access 2010 (CGAP 2010) may be helpful in this regard. 5. Few countries assessed by the FATF have already made provisions with regard to Recommendation 5 to accommodate a flexible approach by not requiring proof of address. In the case of South Africa, for example, Exemption 17 permits the application of reduced CDD to special accounts (such as the Mzansi accounts). To make these accounts available to more customers and to develop further financial inclusion, accountable institutions are required only to establish and verify the customer’s identity. They are not required to verify addresses. Furthermore, authorities have established that the ML/TF risks associated with this product are low because of the limits placed on account activity and because customers using these accounts are unlikely to commit these acts. Assessors considered this approach acceptable. For further details, particularly on the risk assessment of Mzansi accounts by the authorities, see FATF/ESAAMLG (2009) and de Koker (2009). 6. In addition to questions on whether simplification or exemption is applicable, consideration of the following would be desirable: (1) whether all (new) customer groups in a country are captured under an appropriate AML/CFT regime and (2) whether the application of KYC/CDD requirements to the new categories of customers is effective.