Edited by Sergio Silvestri

Technology can play an important role in balancing policy objectives and mitigating privacy risks, just as adequate governance and regulatory frameworks are crucial in AML/CFT/CP. A FATF report reiterates that combating money laundering, countering the financing of terrorism and proliferation of weapons of mass destruction, and protecting data and privacy are significant public interests that are neither mutually exclusive nor mutually exclusive. The report aims to help jurisdictions considering improving information exchange between private sector entities design these initiatives responsibly, in compliance with data protection and privacy regulations, so that the risks associated with increased sharing of personal data are taken into account. To this end, the FATF consulted data protection authorities, academics, technology providers, and the private sector.

The report highlights that AML/CFT/CPF systems seek to deny organized crime groups, corrupt officials, terrorist organizations, arms dealers, drug traffickers, and human traffickers access to the financial system. Despite these efforts, it states, criminal organizations are becoming more sophisticated and exploiting gaps in the system. A single financial institution has only a partial view of transactions and sees a small piece of what is often a large puzzle. Criminals exploit this information gap by using multiple financial institutions within or across jurisdictions to layer their illicit financial flows. Without more accurate and consistent information, it becomes increasingly difficult for individual financial institutions to detect such activities.

On the other hand, data misuse, unnecessary sharing, or lack of protection can negatively impact individuals who are not involved in malicious activities. Relevant data and systems must be managed and designed in accordance with DPP rules. Initiatives must be necessary and proportionate to the purposes of the processing, and the risks associated with increased data sharing must always be balanced against the public benefits of fighting financial crime.

Source: www.fatf-gafi.org

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