In February 2021, the Financial Action Task Force (FATF) launched a new project to study and mitigate the unintended consequences resulting from the incorrect implementation of the FATF Standards.

The project will focus on four main areas:

• De-risking, or the loss or limitation of access to financial services. This practice has affected non-profit organisations (NPOs), money value transfer service providers, and correspondent banking relationships, in particular;

• Financial exclusion, a phenomenon whereby individuals are excluded from the formal financial system and denied access to basic financial services;

• Suppression of NPOs or the NPO sector as a whole through non-implementation of the FATF’s risk-based approach;

• Threats to fundamental human rights stemming from the misuse of the FATF Standards or AML/CFT assessment processes to enact, justify, or implement laws, which may violate rights such as due process or the right to a fair trial.

The FATF will conduct the project in two phases:

• Phase One: research and engagement. The project team will analyse these unintended consequences resulting from the misuse of the FATF’s Standards on preventing and combating money laundering and the financing of terrorism. This work will draw on the knowledge and experiences of members of the FATF’s Global Network of 205 jurisdictions, its observers, and outside stakeholders.

• Phase Two: solutions. The second phase will develop options the FATF could consider to prevent and mitigate these unintended consequences.