MONEYVAL's evaluation rounds
MONEYVAL’s system of peer review is based on the FATF model, however the process of self-assessment and mutual evaluation is undertaken against a more extensive set of anti-laundering standards. In addition to the Forty Recommendations and the nine Special Recommendations on the Financing of Terrorism, participating countries are assessed in relation to their compliance with the 1988 UN and 1990 Council of Europe conventions and the 3rd EU Directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.
process of the participating States is based on several
evaluation round (2005-2009)
Follow-up evaluation round or “MONEYVAL Fourth Round” (2009-2014)
Fifth evaluation round (2015...)
What is the MONEYVAL evaluation procedure?
Third mutual evaluation round
Objectives and format
The third round of mutual evaluations was based on the 2003 revised FATF Recommendations and took place between 2005 and 2009, with the exception of the Holy See, which was evaluated under the 2003 Recommendations in 2012 after the Committee of Ministers accepted its 2011 application to join the MONEYVAL evaluation process. The evaluations also reviewed, in all MONEYVAL States and territories, aspects of compliance with the European Union’s Third Anti-Money Laundering Directive. 28 Council of Europe member States together with the Holy See (including Vatican City State) and Israel were evaluated in the third round.
The evaluation team normally comprised one member of the MONEYVAL Secretariat and four evaluators: one legal evaluator, one law enforcement evaluator and two financial evaluators. Ahead of the on-site visit, a mutual evaluation questionnaire was sent to the evaluated State or territory. The State or territory was required to provide comprehensive replies to a detailed evaluation questionnaire, relevant legal and regulatory provisions and relevant statistics. The on-site visit provided the evaluation team with the opportunity to meet with relevant governmental agencies, regulators, law enforcement and prosecution agencies, as well as with relevant private sector organisations and non-governmental organisations. The on-site visit normally did not exceed 8 days. The evaluation team then drafted the evaluation report, which was discussed with the State before being submitted to the Plenary for adoption.
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 taken since the adoption of the report.
The MONEYVAL Secretariat prepared a written analysis of progress against
the FATF Core Recommendations. This desk 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. The rapporteur jurisdiction’s
role was to raise questions on the replies given to the progress report
questionnaire on non-Core Recommendations. The rapporteur jurisdiction
advised the Plenary as to whether the information provided adequately
answered the questions raised. 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 CEPs. An adopted progress report was subject to a
second progress report two years later.
In 2013, the 3rd round report system was applied to the States and
territories that joined MONEYVAL after the conclusion of the 3rd round
and also to Montenegro, which still was required to satisfy the Plenary
that progress was sufficient to adopt its second progress report.
[ N.B.: In 2013, the Plenary decided that 3rd round progress reports
would only continue to apply to the States and territories which joined
MONEYVAL after the conclusion of the 3rd round of evaluations and
Montenegro (until the 2nd progress report was adopted) and any State or
territory not participating in MONEYVAL’s follow-up round. ]
Fourth mutual evaluation round
Objectives and format
MONEYVAL commenced a follow-up round of on-site visits in 2009. For each State or territory evaluated, these evaluations focus on the effectiveness of implementation of Core and Key and some other important Recommendations in the FATF 2003 Recommendations together with any Recommendations for which the country received either a non-compliant or partially compliant rating. In addition the evaluation also reviews aspects of compliance with the European Union’s Third Anti-Money Laundering Directive.
The evaluation procedure is similar to that of the third round, as set out above, but differs in its follow-up processes.
MONEYVAL’s 4th round follow-up process broadly follows the practices and procedures used by the FATF in its 3rd round of assessments. There are 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.
Countries 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.
When assessed countries have received partially compliant or non-compliant ratings in any of the six Core Recommendations, they are placed in regular follow-up. The country is then expected to report back to the Plenary, initially within two years – though the Plenary can decide on a more expedited timetable –, 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 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.
Where the Plenary is concerned about the lack of progress against the findings in the 3rd round report as demonstrated in a 4th round evaluation report, the assessed country can be placed in an enhanced follow-up process. The procedures include requesting the country to provide regular reports on progress in remedying deficiencies earlier than two years from the adoption of the report, possibly coupled with placing the country into CEPs. These procedures provide further peer pressure to rectify deficiencies.
Unlike the 3rd round progress reports, 4th round follow-up reports are not routinely published. Biennial reports are published on the MONEYVAL website but regular or enhanced follow-up reports, together with the Secretariat’s analysis, are only published once the assessed country has successfully been removed from either regular or enhanced follow-up.