FATF guidance – Financial Inclusion and Anti-Money Laundering & Terrorist Financing Measures

IPA Insolvency Practitioner newsletter AML Digest, August 2025

FATF has published its revised guidance on financial inclusion and AML/CTF measures.

The guidance is issued to assist jurisdictions and institutions on designing AML/CTF controls and policies that aid financial inclusion. The guidance can be found here.

The main areas that will impact insolvency are:

• Simplified Due Diligence (SDD) – FATF supports SDD where a case has a proven low money laundering risk. This could be seen in cases such as bankruptcy appointments where there is reliance that can be placed on the Bankruptcy Order, but risks are assessed.
• No face-to-face meetings – FATF recognises that initial meetings and onboarding of new clients can be done digitally and not ‘face-to-face’. FATF does note that whilst this is a legitimate method to take on new clients/cases, this is on the provision that adequate safeguards are in place and that risks are effectively managed
• Proportionate application of AML/CTF measures – FATF previously used the term ‘commensurate’ in its guidance. They have now introduced the term ‘proportionate’ which is being used to avoid the need to uniformly apply measures across cases. Measures to manage and effectively control risks in cases can be adjusted to the level and nature of the risk.

What does this mean on cases? The good thing is that the use of Zoom, Teams and other digital ways to ‘meet’ is accepted as a legitimate way to proceed with cases. This aligns with the high-risk indicators the IPA issues – see here. It is also useful that SDD is noted and supported by FATF and again, would align with the CCAB guidance issued that deals with cases where SDD may be appropriate – the guidance can be found here.

The main point remains that you need to identify, verify and assess the risks of any new client, and the use of file notes to highlight the work done and the conclusion on risk are key to evidence effective compliance with MLR17 (as amended).