The Financial Action Task Force (“FATF”) recently released a white paper entitled “Guidance for a Risk Based-Approach: Prepaid Cards, Mobile Payments and Internet-based Payment Services” (“Guidance”). The Guidance contains nonbinding suggestions for policy makers on ways to improve their respective country’s money laundering controls by applying existing FATF Recommendations to new and emerging financial services providers. Because the FATF is an inter-governmental body and the United States is an active member, the Guidance has important implications for nonbanks and service providers that are expanding into the mobile payments space, especially those who are offering products that do not neatly fit within the existing Bank Secrecy Act (“BSA”) and anti-money laundering (“AML”) requirements set forth by the Financial Crimes Enforcement Network (“FinCEN”) and other federal offices such as the Office of Foreign Assets Control (“OFAC”).
OVERVIEW OF THE GUIDANCE -
The Guidance is meant to explain how the risk-based AML principles in the existing FATF Recommendations can be applied to each of these three payment types. The document consists of seven sections, which can be summarized as follows...
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