FATF’s 2025 implementation of revisions to the FATF Standards

At the FATF Private Sector Collaborative Forum in Mumbai, participants are discussing FATF’s efforts to promote financial inclusion, including the implementation of recent revisions to the FATF Standards.

 The February 2025 Plenary introduced key amendments that enhance proportionality and encourage the use of simplified measures within the risk-based approach.

See the amendments below, which are designed to ensure that AML/CFT regulations do not unintentionally exclude vulnerable populations from accessing financial services.👇

The ABOVE changes are repeated here:

1. Replacement of the term “commensurate” with “proportionate”,  defined as a measure or action that appropriately corresponds to the level of identified risk and effectively mitigates the risks, throughout the Recommendations to provide clarity on how the concept should be applied in the context of a risk-based approach and align the FATF’s language more closely with that of financial inclusion stakeholders and frameworks. [R.1 and consequential amendments throughout the Standards]
2. Explicit requirement for countries to allow and encourage simplified measures in lower-risk scenarios. 
• This fosters clarity in the countries’ obligations, enabling simplified measures in their AML/CFT regimes and further incentivizing countries to be more active in advocating for their implementation. [R.1 and consequential amendments throughout the Standards] Correspondingly, financial institutions and Designated Non-Financial Businesses and Professions (DNFBPs) are also required to consider differentiating their measures depending on the type and level of risks. [INR.1 paragraph 16]
3. Require supervisors also to review and take into account the risk mitigation measures undertaken by financial institutions and DNFBPs to avoid overcompliance resulting from a partial understanding of associated risks, and to consider proportionality in their engagements with them. [INR.1 paragraph 9]
4. Addition of qualifier to clarify that non-face-to-face business relationships and transactions would be considered as an example of potentially higher-risk situations only where appropriate risk mitigation measures have not been implemented.
• This amendment recognises that non-face-to-face interactions have become a standard business practice in many countries, and technological advancements in digital identity systems may reduce the associated risks. [INR.10 paragraph 15]
5. Further clarity in the requirements related to the application of simplified measures and exemptions in lower and low-risk scenarios, respectively. [Throughout R.1 and INR.1]

Learn more and contribute to the consultation on updated guidance to embed these changes by 4 April 2025: https://www.fatf-gafi.org/en/publications/Fatfrecommendations/update-standards-promote-financial-conclusion-feb-2025.html