K2-FIN Alert: US Gets Upgraded FATF Rating Due to Customer Due Diligence Rule Implementation

Jeff Brody
Juan Zarate

An alert from K2 IntelligenceFinancial Integrity Network says the Financial Action Task Force has upgraded the U.S. from “partially compliant” to “largely compliant” with Recommendation 10 after it implemented the U.S. Treasury’s requirements for customer due diligence.

K2-FIN said in the alert published Thursday the upgrade reflects the country’s efforts to address CDD issues identified in FATF’s 2016 Mutual Evaluation Report.

U.S. authorities issued in 2016 and implemented two years after the new CDD Rule for financial institutions to address the lack of access by law enforcement officials and regulators to current and accurate beneficial ownership data, which was identified as one of the basic gaps in the U.S. anti-money laundering/combatting the financing of terrorism regime based on MER.

The FATF report notes that the U.S. is now “largely compliant” or “compliant” with 31 out of the 40 recommendations but needs to ramp up efforts to address the transparency of legal arrangements and legal persons and AML regulation of some high risk professions and businesses.

The country should also address issues with regard to directly extending CDD requirements to trusts and other weaknesses under Recommendation 10.

Juan Zarate, a previous Wash100 award winner, is chairman and co-founder of FIN, which K2 acquired in 2019.

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