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The Financial Action Task Force (FATF), the international standards setter for anti-money laundering and counter-financing of terrorism (AML/CFT), has published a Guidance on Private Sector Information Sharing (“the Guidance”). FATF has also made revisions to its Interpretative Note to Recommendation 18 (INR.18) which relates to financial groups’ internal controls, and their foreign branches and subsidiaries. These developments underpin the importance of effective information sharing, as one of the cornerstones of a well-functioning AML/CFT framework.
The Guidance clarifies the FATF’s Standards on information sharing: a) on a group-wide basis; and b) between financial institutions not belonging to the same financial group. It highlights some legal constraints (e.g. requirements arising from differing data protection and privacy regimes) and operational challenges (e.g. restriction on outsourcing arrangements) that could hinder such information sharing and recommends ways to address them. It also provides an update on international developments on information sharing and country examples to facilitate information sharing within the group and between financial institutions not part of the same group, beyond that envisioned under the FATF Standards.
The revisions to INR.18 clarify the requirements on the sharing of information relating to unusual or suspicious transactions within the financial group. Amendments have also been made to Recommendation 21, to clarify that tipping off provisions are not intended to inhibit information sharing as required under Recommendation 18.
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