The Financial Action Task Force
The Financial Action Task Force (FATF) is an intergovernmental body established in 1989 by the G7 countries, with the aim of combatting money laundering, terrorist financing, and other threats to the international financial system. The FATF advocates for global standards to reduce these risks, and evaluates whether countries are effectively addressing these issues.
FATF Updates to the Standards on Recommendation 16
Following the June 2025 Plenary, changes were made to Recommendation 16 (R.16) of the FATF Standards, also referred to as the ‘Travel Rule’ in the context of virtual assets. The revision of R.16 aims to align the FATF Standards with the significant developments in the payment domain over recent decades. The changes aim to strengthen the global payment system by enhancing the transparency of information that accompanies cross-border transactions and mandating the implementation of safeguards to prevent fraud and mistakes.
By updating its Standards, the FATF is making sure that anti-money laundering measures adapt to the evolving financial landscape, where a broader range of entities, including fintech firms and digital payment platforms, now handle roles once reserved for traditional banks.
The changes to R.16 include:
- Clarifying who within the payment chain is responsible for including information in payment messages and ensuring it remains unchanged
- Applying standardised requirements on what information must accompany payment messages for peer-to-peer cross-border payments above USD/EUR 1,000 (name, address, date of birth).
- Requiring financial institutions to make use of new technologies that protect against fraud and errors, so that customers have peace of mind that their money is directed appropriately.
- Further clarification to clearly define what qualifies as “purchase of goods and services.”
These changes will come into effect by the end of 2030.
FATF Report on Proliferation Financing and Sanctions Evasion
A new report published by the FATF, Complex Proliferation Financing and Sanctions Evasion Schemes, revealed that alarming deficiencies remain across the global financial system in countering the financing of weapons of mass destruction.
The report examines the evolving methods and tactics used to evade sanctions related to Proliferation Financing, including those mandated under Recommendation 7 of the FATF Standards as well as broader national and supranational sanctions. It highlights four key typologies commonly used in sanctions evasion: the use of intermediaries to evade sanctions, obscuring beneficial ownership information to access the financial system, using virtual assets and other technologies, exploiting the maritime and shipping sectors.
To help countries address the growing threat of proliferation financing and sanctions evasion, the report highlights common enforcement challenges and showcases effective approaches, such as public-private partnerships that enhance information sharing, and the issuance of detailed alerts to aid financial institutions in filing Suspicious Activity Reports and Suspicious Transaction Reports
FATF Guidance on Financial Inclusion and Anti-Money Laundering and Terrorist Financing Measures
After the strengthening of Recommendation 1 of the FATF Standards, the FATF has updated its ‘Guidance on Financial Inclusion and Anti-Money Laundering and Terrorist Financing Measures.’ This guidance aims to improve access to financial services for individuals in low-income, rural, or fragile settings, particularly those who are unable to very their identities or are underserved by current financial systems. The FATF advocates for a risk-based approach, emphasizing the need to balance financial integrity with inclusion to create more accessible and resilient financial systems.
Conclusion
Staying ahead of evolving FATF standards is not just a regulatory necessity but a strategic imperative, due to rapid technological innovation and increasingly sophisticated financial crimes. The recent updates to Recommendation 16 and ongoing efforts to combat proliferation financing and promote financial inclusion underscore the dynamic nature of global financial compliance.
By assisting our clients in complying with the latest FATF standards, we enable businesses to confidently safeguard their reputation and contribute to a more transparent and secure global financial network. Should further clarification or support be required regarding the interpretation or implementation of these updates, please do not hesitate to contact our team.
