FATF and MONEYVAL Plenary Ushers in Global AML Reforms and Enhanced Compliance Measures

The global framework for combating money laundering, terrorist financing, and proliferation threats took a major leap forward following the June 2025 joint plenary of the Financial Action Task Force (FATF) and MONEYVAL, held in Strasbourg.

The landmark gathering delivered comprehensive updates to the FATF Standards, signaled a shift toward results-based compliance, and laid out new expectations for jurisdictions worldwide to strengthen their defences against financial crime.

Hosted at the Council of Europe, the FATF MONEYVAL Plenary convened more than 200 jurisdictions, financial supervisors, policymakers, and civil society representatives. One of the primary outcomes was the adoption of sweeping changes to enhance transparency in cross-border payments—a reform seen as a critical move to improve the security and efficiency of the global financial system.

New Rules for Cross-Border Payments

At the heart of the reforms were revisions to Recommendation 16, aimed at bolstering payment transparency. Starting 18 June 2025, and with a target implementation date of 2030, all cross-border financial transactions exceeding USD/EUR 1,000 must include full and verified information about both the originator and the beneficiary.

These changes are part of a broader FATF initiative aligned with the G20’s objectives to create faster and more affordable international payments. The new rules require that “financial institutions must collect and transmit the required data, verify its accuracy, and put in place systems that can flag discrepancies and suspicious activity.”

The updated standard is technology-neutral, encompassing both traditional banking infrastructures such as SWIFT and emerging digital payment platforms, including virtual asset service providers (VASPs). The FATF emphasized that the reforms were developed through a multi-stakeholder consultation process involving “global banks, fintechs, payment companies, civil society, and international organizations,” to ensure the resulting framework remains both practical and proportionate.

Evolution of Risk-Based Evaluations

The plenary marked a major shift in how jurisdictions will be assessed for AML/CFT/CPF compliance. Moving away from a box-ticking model, the FATF and MONEYVAL are now focused on effectiveness and risk management in real-world contexts. This transition was reflected in the first MONEYVAL mutual evaluation report of Latvia under the new cycle, which emphasizes outcomes over formal compliance.

Countries like Czechia, Georgia, and Slovakia were reviewed under the Compliance Enhancing Procedures framework, with follow-up measures scheduled for the December 2025 plenary. This mechanism is activated when countries exhibit moderate or major technical failings, requiring structured remedial action.

In support of these changes, the plenary approved a new national risk assessment toolkit, offering practical guidance to help jurisdictions accurately identify and mitigate their unique money laundering and terrorist financing risks.

Strengthening Financial Inclusion with Proportional AML

The FATF and MONEYVAL remain committed to promoting financial inclusion, especially for unbanked and underbanked populations. Guidance expected by the end of June 2025 will elaborate on how financial institutions and governments can apply simplified AML/CFT measures where risks are low.

De-risking—a practice where institutions sever relationships with clients or regions deemed too risky—remains a growing concern. Rather than eliminating entire customer segments, FATF now urges firms to adopt tailored, proportionate controls. “Rather than simply exiting these relationships,” the FATF said, “a risk-based approach that evaluates individual client risk and applies appropriate safeguards” is essential.

This ethos aligns with recent amendments to Recommendation 1, which now mandates that AML/CFT frameworks must demonstrate “effectiveness, proportionality, and relevance to actual risk.”

Updates on Jurisdictions Under Monitoring

Several jurisdictions saw updates in their monitoring status during the plenary. Latvia’s evaluation will be published later in 2025, once it passes final quality reviews. In contrast, Croatia, Mali, and the United Republic of Tanzania were removed from the FATF’s “grey list” after successfully completing their Action Plans and undergoing on-site assessments.

However, new concerns were flagged as Bolivia and the UK Virgin Islands were added to the list of jurisdictions under increased monitoring. The FATF noted these countries have identified “strategic deficiencies in their AML/CFT/CPF regimes” and will now begin work with FATF and regional bodies on remediation.

Meanwhile, high-risk jurisdictions such as Myanmar, Iran, and the Democratic People’s Republic of Korea remain under a “call for action” requiring financial institutions globally to implement strict countermeasures. These include enhanced due diligence, greater transaction scrutiny, and in some cases, termination of correspondent banking relationships.

The FATF also reaffirmed the suspension of Russia’s membership, noting that “vigilance against evolving risks associated with the circumvention of sanctions and international financial restrictions” remains a key priority.

Protecting Civil Society from Unintended AML Consequences

A new focus was placed on safeguarding non-profit organizations (NPOs) and humanitarian groups from undue harm stemming from AML rules. The FATF adopted procedures to ensure that standards do not unintentionally hinder legitimate civil society functions.

“Assessment and follow-up processes will now better account for the crucial work done by civil society while targeting only those activities at genuine risk of abuse,” a FATF spokesperson stated. This update responds to concerns that excessive scrutiny has made it harder for NGOs to access financial services, despite posing low actual risk.

Tackling Terrorist Financing and Proliferation Threats

Emerging financial crime threats also featured prominently on the plenary’s agenda. A new global assessment of terrorist financing risks, drawing input from over 80 countries, will provide insights into how terror networks raise and move funds.

The FATF also approved the release of an updated report on proliferation financing, offering practical recommendations for detecting illicit efforts to fund weapons programs. These materials are designed to assist governments and financial institutions in identifying red flags and implementing effective controls.

In parallel, a sixth targeted update on virtual assets and VASPs will be published this month, reviewing the state of FATF compliance among crypto-related services and assessing the efficacy of existing frameworks in curbing abuse.

Promoting Global Cooperation and Capacity-Building

The plenary also highlighted the importance of cross-border collaboration. A dedicated session brought together technical assistance providers and donor nations to explore strategies for supporting jurisdictions struggling with implementation.

The FATF stressed that “countries of all sizes must have the tools and resources needed to tackle financial crime.” Additionally, the high-level meeting of FATF-Style Regional Body (FSRB) chairs helped coordinate regional perspectives and align strategies.

Observer countries, including Kenya, Senegal, and the Cayman Islands, continued active participation, reinforcing the FATF’s ongoing effort to ensure “expanded inclusivity and attention to regional dynamics.”

Looking Ahead

The June 2025 FATF MONEYVAL Plenary has set a new trajectory for the global AML/CFT/CPF framework. With the rollout of revised standards, enhanced mutual evaluation methodologies, and targeted support for financial inclusion and civil society, the message is clear: the fight against financial crime must be both robust and equitable.

As jurisdictions prepare to meet new benchmarks by 2030, the FATF emphasized that “ongoing evaluation, technical support, and international cooperation will be key.” The outcomes of this plenary reflect an evolving consensus that AML measures must not only deter crime, but also support transparency, inclusion, and economic resilience in a fast-changing world. 

By fLEXI tEAM