FATF Recommendations: Key Updates In February 2025

Regulation Name: FATF Recommendations
Date Of Release: 25 February 2025
Region: International
Agency: FATF

AML/CFT Standards: Key Changes to FATF Recommendations 1, 10, and 15

The Financial Action Task Force (FATF) has updated its global AML/CFT standards following the February 2025 Plenary. These amendments enhance risk management, customer due diligence (CDD), and virtual asset oversight to combat money laundering, terrorist financing, and proliferation financing. Below is a breakdown of the key changes.

1. Strengthening the Risk-Based Approach (RBA) – FATF Recommendation 1

FATF has reinforced the importance of a risk-based approach (RBA) to ensure that AML/CFT measures are proportionate to the level of risk identified.

Key Updates:

• Countries must identify, assess, and mitigate risks associated with money laundering, terrorist financing, and proliferation financing.

• Authorities should allocate resources efficiently to high-risk areas while allowing simplified measures for lower-risk activities.

• The definition of proliferation financing risk is now aligned strictly with targeted financial sanctions under Recommendation 7.

2. Reinforcing Customer Due Diligence (CDD) – FATF Recommendation 10

Customer Due Diligence (CDD) remains a cornerstone of AML measures. FATF has refined its guidance to enhance transparency and prevent misuse of financial systems.

Key Amendments:

• A USD/EUR 15,000 threshold has been set for occasional transactions, triggering mandatory CDD.

• Financial institutions must monitor linked transactions that could exceed the threshold collectively.

• Ongoing due diligence is required to keep customer data updated, especially for high-risk clients.

• Simplified CDD measures are not allowed if there is suspicion of money laundering or terrorist financing.

3. Expanding Oversight on Virtual Assets – FATF Recommendation 15

With the rise of digital assets, FATF has expanded its framework to regulate Virtual Asset Service Providers (VASPs) and address risks related to new financial technologies.

Key Changes:

• VASPs are now subject to proliferation financing risk assessments, ensuring compliance with targeted financial sanctions.

• AML/CFT measures must be applied to virtual asset activities to prevent illicit use.

• Countries must ensure that VASPs adhere to risk-mitigation frameworks in line with financial sector standards.

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