Monitoring of progress forms an essential component of MONEYVAL’s mutual evaluation framework, supporting the implementation of the FATF Recommendations and the achievement of effective AML/CFT outcomes. Following the adoption of a mutual evaluation report (MER), jurisdictions are subject to follow-up processes designed to monitor progress in addressing identified deficiencies and strengthening their AML/CFT frameworks. The modalities and procedures for monitoring progress have evolved across evaluation rounds, in line with developments in international standards and evaluation practices. An overview of the monitoring arrangements applicable to each round is set out below.

SIXTH EVALUATION ROUND (2024 - )

Monitoring of progress under the sixth round of mutual evaluations builds on the previous follow-up framework, with continued use of regular and enhanced follow-up processes. Following the adoption of a sixth round MER, jurisdictions are placed in either regular follow-up or enhanced follow-up depending on the degree of deficiencies identified (or referred to the FATF International Co-operation Review Group (ICRG), if the matter meets the nomination criteria set out under the ICRG procedures). Under both regular and enhanced follow-up, jurisdictions would typically be expected to report back to Plenary approximately three years following the adoption of the MER. Ideally, in the three-year period following adoption of an MER, jurisdictions should have fully addressed all Key Recommended Actions (KRAs), improved their technical compliance with FATF Recommendations rated Non-Compliant or Partially Compliant, and made necessary adjustments to align with any revised FATF Standards. 

Regular follow-up

  • Regular follow-up is applied for those members whose MER reflect substantial to high levels of effectiveness and technical compliance. In this process, the jurisdiction presents a self-assessment report three years following the adoption of the MER, outlining progress made against KRAs. The report focuses on demonstrating how the jurisdiction has addressed the KRAs, including any improvements to technical compliance, particularly on FATF Recommendations rated Non-Compliant or Partially Compliant. In addition, the jurisdiction is required to report on any changes made to comply with revised FATF Standards since the adoption of the MER. Where all KRAs have not been fully or largely addressed, the Plenary may direct that the jurisdiction submits an updated report for analysis or transition to enhanced follow-up if strategic shortcomings remain.

Enhanced follow-up

  • Jurisdictions are placed in enhanced follow-up where the AML/CFT system requires major improvements on either technical compliance or effectiveness, or where they have failed to make satisfactory progress against KRAs within the prescribed timeframes. Under enhanced follow-up, progress against all KRAs is assessed by rapporteurs based on information submitted by the jurisdiction, in accordance with the peer review principles of the mutual evaluation framework. If the progress is deemed insufficient or if significant deficiencies remain, the Plenary may require more frequent reporting, apply enhanced compliance measures (as set out within Compliance Enhancing Procedures) or refer the jurisdiction to the FATF’s ICRG process for further scrutiny (where the nomination criteria are met).

 

 

FIFTH EVALUATION ROUND (2015-2024)

Following the adoption of a fifth-round MER, jurisdictions were placed in either regular or enhanced follow-up, depending on the nature and extent of deficiencies identified. Under both regular and enhanced follow-up processes, jurisdictions were able to request re-ratings of one or more recommendations rated as Non-Compliant or Partially Compliant.

Regular follow-up

  • Regular follow-up was the default mechanism to ensure a continuous and on-going system of monitoring. This was the minimum standard that applied to all members after two-and-a-half years from the adoption of the country’s MER and subsequently at three-year intervals. If any of the FATF standards had been revised since the end of the on-site visit (or previous FUR, if applicable), the country was assessed for compliance with all revised standards at the time its re-rating request was considered (including cases where the revised Recommendation was rated Largely Compliant or Compliant).

Enhanced follow-up

  • The Plenary may decide that the country should be placed in enhanced follow-up, which would result in the country reporting back more frequently than for regular follow-up. Countries in enhanced follow-up would typically first reported back to the Plenary two years after the adoption of the country’s MER, and subsequently reported twice more at yearly intervals, unless the Plenary decided otherwise. The Plenary retained the discretion to vary the specific frequency of reporting. If a jurisdiction in enhanced follow-up met the threshold of the general expectation to have addressed most, if not all, technical deficiencies, it would remain under enhanced follow-up, though the frequency of reporting may have been reduced. In addition to more frequent reporting, the Plenary may also have applied Compliance Enhancing Procedures.

 

 

FOURTH EVALUATION ROUND (2009-2015)

The fourth round of mutual evaluations built directly on the outcomes of the third round and focused on assessing progress made in addressing deficiencies identified in earlier evaluations. For each jurisdiction, there were three types of monitoring processes applied following the adoption of a fourth-round MER: biennial update, regular follow-up and enhanced follow-up. 

Biennal update

  • Jurisdictions assessed as having ratings of Compliant or Largely Compliant against the six Core Recommendations were only required to provide a biennial update on their progress in meeting the deficiencies identified in their MER or in taking other action to enhance their AML/CFT regime. These updates commenced two years following the adoption of their MER, and were not typically subject to Secretariat analysis (except in exceptional cases). Where sufficient concerns were identified at Plenary, the jurisdiction was then placed in regular follow-up, applying, if appropriate, any of the steps of the Compliance Enhancing Procedures.

Regular follow-up

  • Jurisdictions in receipt of Partially Compliant or Non-Compliant ratings in any of the six Core Recommendations were placed in regular follow-up (as well as in any cases where the Plenary considered it appropriate to do so). The jurisdiction was then expected to report back to Plenary on the actions it had taken to address the identified deficiencies, initially within two years from the adoption of the report. Upon the discretion of the Plenary, jurisdictions may also have been requested to report to the Plenary in a more expedited manner.
  • Jurisdictions were encouraged to seek removal from the follow-up process within three years of adoption of the MER, or soon thereafter. In order to be removed from regular follow-up, a jurisdiction was required to demonstrate that it had implemented the Key and Core Recommendations at a level equivalent to assigned scores of Compliant or Largely Compliant. Should the Plenary identify a lack of satisfactory progress, it could determine to increase the frequency of reporting or move the jurisdiction to enhanced follow-up reporting.

Enhanced follow-up

  • Jurisdictions were subject to enhanced follow-up processes in cases where significant deficiencies were identified or where the jurisdiction had not taken satisfactory action to exit regular follow-up within five years from the adoption of the report. Under enhanced follow-up, the Plenary could require the application of one of the steps of the Compliance Enhancing Procedures, such as the development of an action plan to address outstanding deficiencies, expediting of the fifth round mutual evaluation or other measures as deemed appropriate.

Streamlined follow-up procedure as of September 2016

  • At the 50th Plenary meeting, it was decided that the remaining follow-up procedures for the fourth round of evaluations would be streamlined in order to focus resource and capacity effectively. Jurisdictions that were previously subject to biennial updates were instead expected to report any relevant updates to Plenary through MONEYVAL’s tour de table procedure. Jurisdictions that were previously subject to regular or enhanced follow-up remained in a streamlined follow-up process, whereby they were expected to report back to Plenary within two years of the adoption of the fourth round MER if they had not already done so, and to seek removal from follow-up within four years of the MER adoption.

 

 

THIRD EVALUATION ROUND (2005-2009)

One year following the adoption of a third round MER, each jurisdiction was required to submit a progress report describing the measures it had put in place since the adoption of the report. Progress reporting was subject to a desk-based analysis, and focused on addressing deficiencies identified in the FATF Core Recommendations.

Follow-up

  • The MONEYVAL Secretariat, supported by a designated rapporteur jurisdiction, prepared a written analysis of the progress reported which was then subject to peer review by the Plenary. Where the Plenary was satisfied with the information provided and progress achieved, the progress report was adopted and published. Where the Plenary was not satisfied with the information provided or progress was considered insufficient, the reporting jurisdiction would be invited to submit additional or more detailed reports, and Compliance Enhancing Procedures could be applied where appropriate.
  • Adopted progress reports were generally followed by a second progress report two years later. Pursuant to decisions taken at the 41st (April 2013), 45th (September 2014) and 46th (December 2014) Plenary meetings, ongoing third round follow-up reporting was limited to a small number of jurisdictions, until the commencement of their evaluation cycle.