Dr. Ikramul Haq & Abdul Rauf Shakoori
The second FATF Plenary under the Presidency of Elisa de Anda Madrazo of Mexico concluded on February 21, 2025, marking a significant milestone in the global fight against money laundering, terrorist financing, and proliferation financing. Delegates from the FATF’s Global Network, comprising over 200 jurisdictions, alongside observers from international organizations, engaged in three days of intensive technical discussions aimed at addressing pressing issues to counter financial crimes. The outcomes of this plenary are poised to reshape the way the international community approaches anti-money laundering (AML), countering the financing of terrorism (CFT), and proliferation financing (CPF), with far-reaching implications for both public and private sectors.
One of the most significant achievements of the plenary was the agreement on revisions to the FATF Standards to better support a risk-based approach and financial inclusion, a key priority under the Mexican Presidency. These changes, informed by an extensive public consultation that garnered over 140 responses, aim to ensure that countries apply a risk-based approach to their AML/CFT/CPF measures. By encouraging financial institutions to implement simplified measures in low-risk scenarios, the revised standards will facilitate greater access to financial services for the estimated 1.4 billion people worldwide who remain unbanked.
This development builds on the findings of a 2021 stocktake, which highlighted the unintended consequences of de-risking, financial exclusion, and the undue targeting of non-profit organizations (NPOs) when jurisdictions fail to properly apply a risk-based approach. The revisions to Recommendation 1 are expected to strike a balance between mitigating financial crime risks and promoting financial inclusion, thereby fostering a more equitable and accessible global financial system.
In addition to the focus on financial inclusion, the plenary also addressed the alarming rise in online child sexual exploitation, a heinous crime that has increasingly been monetized through financial flows. The FATF approved a landmark report that examines how financial intelligence can be leveraged to detect, disrupt, and investigate the monetization of live-streamed child sexual abuse and the “sextortion” of children.
Drawing on case studies and expertise from the FATF’s Global Network, the report provides actionable insights to link financial transactions to offenders, enabling earlier detection and intervention. Scheduled for launch at an event in London on March 13, 2025, the report aims to operationalize its findings globally, bringing together representatives from across the public and private sectors to combat this grave issue. Therefore, by integrating financial crime prevention efforts with child protection initiatives, the FATF is taking a holistic approach to addressing one of the most pressing humanitarian and financial crime challenges of our time.
The plenary also made significant strides in enhancing jurisdictional compliance with the FATF Standards. The Philippines was removed from the list of jurisdictions under increased monitoring following the successful completion of its Action Plan to address strategic AML/CFT/CPF deficiencies. This achievement highlights the importance of sustained commitment and collaboration between jurisdictions and regional bodies, such as the Asia/Pacific Group on Money Laundering, in strengthening AML/CFT systems.
However, the FATF emphasized the need for the Philippines to continue its efforts, particularly in ensuring that counter-terrorism financing measures are appropriately applied without disrupting legitimate NPO activity. On the contrary, the Lao People’s Democratic Republic and Nepal were added to the list of jurisdictions subject to increased monitoring, reflecting the ongoing challenges faced by some countries in addressing strategic deficiencies in their AML/CFT regimes. These developments highlight the dual nature of the FATF’s monitoring process: rewarding progress while maintaining pressure on jurisdictions to uphold global standards.
The suspension of the Russian Federation’s membership, first announced in February 2024, remains in effect, with the FATF reiterating the need for all jurisdictions to remain vigilant against emerging risks arising from the circumvention of measures taken against Russia. This decision highlights the FATF’s commitment to safeguarding the integrity of the international financial system, even in the face of geopolitical complexities. The continued suspension serves as a stark reminder of the importance of international cooperation in addressing financial crime risks that transcend borders.
Another key outcome of the plenary was the launch of a new guest initiative aimed at increasing inclusivity and incorporating regional perspectives into the FATF’s work. Kenya joined the Cayman Islands and Senegal as guest jurisdictions, marking a significant step toward broadening the diversity of voices within the FATF. This initiative reflects the organization’s recognition of the need to account for regional specificities in its efforts to combat financial crime. By inviting jurisdictions from regions with limited representation in FATF-style regional bodies (FSRBs), the FATF is fostering greater cohesion and collaboration within its Global Network.
The plenary also saw the selection of Giles Thomson from the United Kingdom as the next FATF Vice President, effective July 1, 2025. With a distinguished career in financial sanctions implementation and economic crime, Mr. Thomson is well-positioned to lead the FATF’s efforts in addressing emerging financial crime threats. His appointment comes at a critical juncture, as the FATF continues to navigate the evolving landscape of financial crime, including the challenges posed by new technologies and proliferation financing schemes.
In line with its commitment to transparency and inclusivity, the FATF announced plans for three public consultations to gather feedback on key initiatives. These include revisions to Recommendation 16 on payment transparency, which aims to improve the standardization and quality of originator and beneficiary information in payment messages. By enhancing payment transparency, the FATF seeks to support faster, cheaper payments while maintaining robust defenses against illicit finance.
The FATF will consult on its work to understand complex proliferation financing and sanctions evasion schemes, seeking input on best practices and challenges in identifying, assessing, and mitigating proliferation financing risks. These consultations emphasize the FATF’s commitment to engaging with a broad range of stakeholders to ensure that its standards and guidance remain relevant and effective in addressing contemporary financial crime threats.
The plenary also reaffirmed the importance of the FATF’s Horizontal Review of Designated Non-Financial Businesses and Professions (DNFBPs), which examined the application of FATF Recommendations to gatekeepers such as lawyers, accountants, and real estate agents. By addressing deficiencies in the regulation of these professions, the FATF aims to close critical loopholes that have been exploited for money laundering and other financial crimes. This initiative highlights the organization’s recognition of the critical role played by DNFBPs in safeguarding the integrity of the global financial system.
Finally, the FATF’s commitment to fostering collaboration with the private sector was evident in its announcement of the annual Private Sector Collaborative Forum, scheduled to take place in Mumbai on March 25–27, 2025. This event will bring together representatives from the financial sector, non-financial businesses, civil society, academia, and FATF members to discuss current and emerging threats to the global financial system. The strategy of facilitating dialogue and knowledge-sharing between stakeholders will strengthen the collective response to financial crime.
The February 2025 FATF Plenary represents a significant step forward in the global fight against money laundering, terrorist financing, and proliferation financing. The decision to revise its standards to support financial inclusion, address the financial flows linked to online child sexual exploitation, and enhance jurisdictional compliance, the FATF is demonstrating its adaptability and commitment to addressing both longstanding and emerging financial crime challenges. However, the success of these initiatives will depend on the collective efforts of governments, financial institutions, and other stakeholders to implement the FATF’s recommendations and uphold the integrity of the global financial system. As financial crimes continue to evolve, the FATF’s role remains as critical as ever in safeguarding the world’s financial systems from abuse.
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Dr. Ikramul Haq, Advocate Supreme Court, specializes in constitutional, corporate, media, and cyber laws, ML/CFT, IT, intellectual property, arbitration, and international taxation. He studied journalism, English literature, and law. He holds an LLD in tax law with a specialization in transfer pricing.
He was a full-time journalist from 1979 to 1984 with Viewpoint and Dawn. He served Civil Services of Pakistan from 1984 to 1996. He established Huzaima & Ikram in 1996 and is presently its chief partner.
He is the Chief Editor of Taxation. He is the country editor and correspondent of the International Bureau of Fiscal Documentation (IBFD) and a member of the International Fiscal Association (IFA). He is a Visiting Faculty at the Lahore University of Management Sciences (LUMS) and member Advisory Board and a Visiting Senior Fellow of the Pakistan Institute of Development Economics (PIDE).
He has co-authored with Huzaima Bukhari many books that include Tax Reforms in Pakistan: Historic & Critical Review, Towards Flat, Low-rate, Broad and Predictable Taxes (Revised & Expanded Edition, Pakistan: Enigma of Taxation, Towards Flat, Low-rate, Broad and Predictable Taxes (revised/enlarged edition of December 2020), Law & Practice of Income Tax, Law, Practice of Sales Tax, Law and Practice of Corporate Law, Law & Practice of Federal Excise, Law & Practice of Sales Tax on Services, Federal Tax Laws of Pakistan, Provincial Tax Laws, Practical Handbook of Income Tax, Tax Laws of Pakistan, Principles of Income Tax with Glossary and Master Tax Guide, Income Tax Digest 1886-2011 (with judicial analysis).
He is the author of Commentary on Avoidance of Double Taxation Agreements, Pakistan: From Hash to Heroin, and its sequel Pakistan: Drug-trap to Debt-trap and Practical Handbook of Income Tax. Two books of poetry are Phull Kikkaran De (Punjabi 2023) and Nai Ufaq (Urdu 1979 with Siraj Munir and Shahid Jamal). He regularly writes columns for many Pakistani newspapers and international journals and has contributed over 2500 articles on a variety of issues of public interest, printed in various journals, magazines, and newspapers at home and abroad.
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Abdul Rauf Shakoori, Advocate High Court, is a subject-matter expert on AML-CFT, Compliance, Cyber Crime, and Risk Management. He has been providing AML-CFT advisory and training services to financial institutions (banks, DNFBPs, Investment companies, Money Service Businesses, insurance companies, and securities), government institutions including law enforcement agencies located in North America (USA & CANADA), Middle East and Pakistan. His areas of expertise include legal, strategic planning, and cross-border transactions including but not limited to joint ventures (JVs), mergers & acquisitions (M&A), takeovers, privatizations, overseas expansions, USA Patriot Act, Banking Secrecy Act, Office of Foreign Assets Control (OFAC).
Over his career, he has demonstrated excellent leadership, communication, analytical, and problem-solving skills and has also developed and delivered training courses in the areas of AML/CFT, Compliance, Fraud & Financial Crime Risk Management, Bank Secrecy, Cyber Crimes & Internet Threats against Banks, E–Channels Fraud Prevention, Security and Investigation of Financial Crimes. The courses have been delivered as practical workshops with case study-driven scenarios and exams to ensure knowledge transfer.
His notable publications are Rauf’s Compilation of Corporate Laws of Pakistan, Rauf’s Company Law and Practice of Pakistan Rauf’s Research on Labour Laws and Income Tax, and others.
His articles include Revenue Collection: Contemporary Targets vs. Orthodox Approach, It is Time to say goodbye to Our Past, US Double Standards, Was Due Process Flouted While Convicting Nawaz Sharif?, FATF and unjustly listed Pakistan, Corruption is No Excuse for Incompetence, Next step for Pakistan, Pakistan’s compliance with FATF mandates, a work in progress, Pakistan’s strategy to address FATF Mandates was Inadequate, Pakistan’s Evolving FATF Compliance, Transparency Curtails Corruption, Pakistan’s Long Road towards FATF Compliance, Pakistan’s Archaic Approach to Addressing FATF Mandates, FATF: Challenges for June deadline, Pakistan: Combating the illicit flow of money, Regulating Crypto: An uphill task for Pakistan. Pakistan’s economy – Chicanery of numbers. Pakistan: Reclaiming its space on FATF whitelist. Sacred Games: Kulbhushan Jadhav Case. National FATF Secretariat and Financial Monitoring Unit. The FATF challenge. Pakistan: Crucial FATF hearing. Pakistan: Dissecting FATF Failure, Environmental crimes: An emerging challenge,.
The recent publication, coauthored with Huzaima Bukhari, is
Pakistan Tackling FATF: Challenges & Solutions
available at:
https://aacp.com.pk/book-detail/pakistan-tackling-fatf-challenges-and-solutions-35
https://www.amazon.com/dp/B08RXH8W46