Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL)

 
 Monitoring progress
Follow-up procedure of the 3rd round

One year after the adoption of the 3rd round evaluation report, each country was required to submit a progress report describing the new measures it had put in place since the adoption of the report. MONEYVAL Secretariat prepared a written analysis of progress against the FATF Core Recommendations. This desk-based review was circulated to the plenary participants before the discussion of the progress report. One jurisdiction acted as rapporteur to assist the Plenary in its peer review, raising questions with regard to the information provided by the state. If the Plenary was satisfied with the information provided and the progress being undertaken, the progress report and the analysis of the Core Recommendations would be adopted and published on the MONEYVAL website. If the Plenary was not satisfied with the information provided, the reporting jurisdiction would be invited to submit a fuller report to the next meeting. If the progress was considered to be insufficient, further steps could be taken including the imposition of Compliance Enhancing Procedures. An adopted progress report was subject to a second progress report two years later.

Pursuant to decisions taken by the Committee at its 41st (April 2013), 45th (September 2014) and 46th (December 2014) Plenary meetings, progress reports under the 3rd round of assessments will be required in the future only from Ukraine, Isle of Man and the Holy See, until one year before the 5th round assessment visits. The decision of the Plenary not to request Russia to report back under the 3rd round procedures is subject to a discretion to revisit this decision should the 5th round evaluation be postponed beyond 2017.

 

Fourth mutual evaluation round


MONEYVALís 4th round follow-up process broadly follows the practices and procedures used by the FATF in its 3rd round of assessments. Until September 2016, there were three types of processes that can occur following the discussion and adoption of a 4th round evaluation report: biennial update, regular follow-up and enhanced follow-up.
 

Biennial update

States or territories which have received compliant or largely compliant ratings in the six Core Recommendations in their evaluation report are only required to provide a biennial update of their progress in meeting the deficiencies identified in their Mutual Evaluation Report or in taking other action to enhance their AML/CFT regime, starting two years after their MER is discussed.

They submit a biennial report providing the Plenary with information on the new developments in their AML/CFT framework. It is not subject to a Secretariat analysis, except in exceptional cases. The biennial update is, however, subject to consideration by a designated Rapporteur State or territory, as well as to a peer review by MONEYVAL delegations.

When the Plenary is satisfied with the progress reported, it shall adopt the biennial report. In case concerns are formulated, the Plenary shall adopt the report and place the State or territory in regular follow-up, applying, if appropriate, any of the steps of the Compliance Enhancing Procedures.

Regular follow-up

When an assessed State or territory received partially compliant or non-compliant ratings in any of the six Core Recommendations or when the Plenary considers appropriate, they are placed in regular follow-up. The state or territory is then expected to report back to the Plenary, initially within two years from the adoption of the report, and provide information on the actions it has taken or is taking to address the factors and deficiencies underlying any of the Recommendations that are rated partially compliant or non-compliant. Countries may be also requested to report to the Plenary in a more expedited manner, upon the discretion of the Plenary.

States or territories are encouraged to seek removal from the follow-up process within three years of the adoption of the 4th round MER, or soon thereafter. Before a State or territory can be removed from regular follow-up, it is required to demonstrate that it has an effective AML/CFT system in force, under which the State or territory has implemented the Key (the Key Recommendations are Recommendations 3, 4, 23, 26, 35, 36 and 40 and Special Recommendations I, III and V) and Core Recommendations at a level of or at a level essentially equivalent to compliant or largely compliant, in that case the State or territory would be moved to the biennial up-date procedure as described above. Should the Plenary identify a lack of satisfactory steps taken to remedy the deficiencies identified in the MER, it may decide to increase the frequency of reporting under the regular follow-up process or move the jurisdiction to enhanced follow-up.

Enhanced follow-up

States or territories may be submitted to enhanced follow-up in case serious incompliance with the Standards is identified or where the State or territory has not taken satisfactory action to exit regular follow-up within five years from the adoption of the report. Several steps may be applied under enhanced follow-up, such as the application of one of the steps of the Compliance Enhancing Procedures, an action plan may be developed pointing out the outstanding deficiencies, the evaluation under the 5th round may be brought forward or other compliance measures may be applied as deemed appropriate by the Plenary. 

Streamlined 4th round follow-up procedure as of September 2016

At its 50th Plenary (12-15 April 2016), MONEYVAL decided to streamline the remainder of its follow-up procedure for the 4th round in order to create further capacities for its 5th round. At the same time it decided to maintain (and, where appropriate, increase) the peer pressure to ensure that MONEYVAL jurisdictions have in place effective systems to counter money laundering and terrorist financing and comply with the relevant international standards. It was considered that such increased pressure may also help countries to prepare better for their forthcoming 5th round evaluation. The previous follow-up procedure for the 4th round, which expired on 31 August 2016, is reproduced as ANNEX E to the rules of procedure to MONEYVALís fourth round of mutual evaluations.

States or territories which were previously subject to the biennial update process are expected to regularly report any relevant developments to the Plenary through MONEYVALís tour de table procedure.

States or territories which were previously subject to regular or enhanced follow-up will remain in a streamlined follow-up process. They are expected to report back to the Plenary, if they have not yet done so under the previous follow-up procedure, within two years after the 4th round MER was adopted. Those States or territories which remain in the streamlined follow-up process are expected to seek removal from that follow-up process within four years after the adoption of the 4th round MER at the latest. The Plenary encourages an earlier application for removal.