Letter to FATF on the Proposed Revisions to R.16/INR.16

Re: Comments of American Bankers Association on the proposed revisions to R.16/INR.16

Dear President Madrazo:

The American Bankers Association appreciates the opportunity to respond to the request for consultation by the Financial Action Task Force (FATF) regarding updated proposed revisions to Recommendation 16 (R.16), its Interpretive Note (INR.16), and the related Glossary of specific terms. R.16 revisions are intended to address developments in payments and messaging standards that have occurred since the standard was adopted in 2012. In light of the rapidly evolving changes in payments over the past thirteen years, as well as the new methods by which criminals and terrorists attempt to move currency and transfer value (e.g., using convertible virtual currency), ABA supports FATF's reconsideration of R.16, provided that FATF addresses the remaining concerns we and others identify.

Summary of Comment

ABA thanks FATF for adopting many of the changes we proposed in our response of May 3, 2024 and that reflect the feedback we provided during the FATF Outreach Session to discuss R.16 and INR.16 in Washington D.C. on May 28-29, 2024. We appreciate FATF working collaboratively with technical experts to re-examine many aspects of the R.16 standard.

These include:

Acknowledging that the risks posed by illicit actors vary by payment form and are best addressed through bespoke approaches;
Removing ambiguity and preserving the existing R.16 exemption for card payments for the purchase of goods or services;
Dropping the mandatory requirement to verify information alignment after the payment has been initiated;
Removing the proposed new requirement to include a full address with all payments and value transfers; and
Adopting the instruction route to define the payment chain.

However, more work remains to be done to achieve FATF's stated objectives of ensuring the Standards remain technology-neutral while helping to make cross-border payments faster, cheaper, more transparent and inclusive, as well as remaining safe and secure. We believe FATF's proposals related to information alignment, cross-border cash withdrawal, and privacy and information security require additional modification, in consultation with experts and relevant stakeholders, and should be generally consistent with a risk-based approach. Requiring banks to "align" beneficiary information, either before or after a cross-border payment is not the most effective way to stop fraudulent transfers. Bad actors are often meticulous about ensuring beneficiary information matches —more so than legitimate customers.

Download the comment letter to read the full text.

Letter to FATF on the Proposed Revisions to R.16/INR.16

Summary of Comment

In Depth

Related Products

Our Experts

Letter to FATF on the Proposed Revisions to R.16/INR.16

Summary of Comment

In Depth

Related Products

Our Experts

Related to This