The Financial Action Task Force (FATF) has initiated revisions to Recommendation 16 (R.16), its Interpretive Note (INR.16) and the related Glossary of specific terms, to adapt them to the changes in payment business models and messaging standards. 

The FATF recognizes that due to the technical nature of this subject, this consultation requires an ongoing dialogue with the relevant bodies and experts in both public and private sectors.

This project is also a part of the G20 Priority Action Plan to progress work on making cross-border payments faster, cheaper, more transparent and more inclusive, while maintaining their safety and security. Revisions include clarifying the roles and responsibilities of different players involved in the payment chain and improving the content and quality of basic originator and beneficiary information contained in the payment messages. This should help achieve greater transparency and more efficient and effective compliance processes by financial institutions.

The main questions presented by the FATF are targeting the following issues:

  • Additional transparency requirements on exemption for purchase of goods and services using cards;
  • Removal of the withdrawal or purchase of cash or a cash equivalent from R.16 exemption, subject to certain conditions; 
  • Improving the content and quality of basic originator and beneficiary information in payment messages;
  • Obligations on beneficiary financial institutions to check alignment of beneficiary information in payment messages; and 
  • Definition of payment chain and conditions for net settlement.

Responses to this consultation exercise are to be submitted by 3 May 2024.

Disclaimer This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.
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