FATF ¦ Outcomes FATF Plenary, 19-21 February 2025

FATF February 2025 Plenary: Financial Inclusion, Online Child Exploitation, and Evolving AML/CFT Priorities

A recalibrated risk-based approach, renewed focus on financial inclusion, and concrete steps against online child sexual exploitation dominated the agenda at the FATF Plenary held in Paris from 19–21 February 2025. Under the Presidency of Elisa de Anda Madrazo of Mexico, delegates from over 200 jurisdictions endorsed targeted updates to the FATF Standards, closed out key workstreams, and opened three public consultations that will shape policy and supervision through 2025.

A Risk-Based Approach

Refocused on Inclusion Following extensive public consultation with more than 140 submissions across civil society, financial institutions, and professional bodies, the Plenary agreed revisions to Recommendation 1 to better operationalize the risk-based approach and support financial inclusion. The changes are designed to encourage the use of simplified measures where risks are demonstrably lower, helping reduce unnecessary friction for underserved populations while maintaining safeguards against illicit finance.

This policy shift responds to long-standing concerns that misapplied risk frameworks have driven de‑risking, excluded legitimate non-profit organizations, and chilled civic space. The FATF’s updates build on findings from its 2021 stocktake and are intended to anchor proportionate compliance that does not unintentionally curtail access to finance or human rights.

Combating Financial Flows Behind Online Child Sexual Exploitation

The Plenary approved a landmark report that leverages financial intelligence to detect and disrupt the monetization of live-streamed child sexual abuse and the “sextortion” of children. Drawing from case studies across the Global Network, the report provides practical indicators for linking payment trails to offenders and facilitating earlier intervention. The FATF will launch the report in London on 13 March 2025, with an implementation-focused event convening public and private stakeholders to operationalize its findings globally.

Jurisdictions Under Increased Monitoring: Additions and Exits

The FATF added Lao People’s Democratic Republic and Nepal to the list of jurisdictions under increased monitoring. Placement in this category signals a commitment to time-bound action plans addressing strategic AML/CFT/CPF deficiencies.

In a notable exit, the Philippines completed its action plan and was removed from increased monitoring following a successful on-site visit. While no longer under FATF monitoring, the Philippines is encouraged to sustain momentum with the Asia/Pacific Group on Money Laundering, particularly by ensuring targeted and effective counter-terrorist financing measures that do not impede legitimate activities of non-profit organizations.

Membership and Geopolitical Risk Posture

The suspension of the Russian Federation remains in effect. The FATF reiterated the need for all jurisdictions to remain vigilant to risks arising from the circumvention of measures taken against Russia, underscoring the continuing intersection between sanctions, evasion typologies, and the protection of the international financial system.

Bastian Schwind-Wagner_Follow "The FATF’s February 2025 Plenary in Paris approved revisions to Recommendation 1 to strengthen a proportionate risk-based approach that supports financial inclusion, advanced work to disrupt financial flows behind online child sexual exploitation, and launched consultations on R.16 payment transparency and complex proliferation financing. It added Lao PDR and Nepal to increased monitoring, removed the Philippines, maintained Russia’s suspension, welcomed Kenya as a guest jurisdiction, and named the UK’s Giles Thomson as Vice President from 1 July 2025."

Expanding Voices: Guest Jurisdictions and Global Network Cohesion

In pursuit of greater inclusivity and regional balance, the FATF’s guest initiative welcomed Kenya to the Plenary and Working Groups, joining the Cayman Islands and Senegal (both invited in October 2024). Invitations rotate annually and are intended to amplify perspectives from underrepresented regions and strengthen coherence across FATF and FATF-Style Regional Bodies.

Vice-Presidency: UK’s Giles Thomson Selected for 2025–2027

The Plenary selected Giles Thomson of the United Kingdom as the next Vice President, succeeding Jeremy Weil of Canada on 1 July 2025. Thomson currently serves as Director of the Office for Financial Sanctions Implementation and Economic Crime at HM Treasury and heads the UK’s FATF delegation. His appointment signals continuity on sanctions implementation and economic crime policy at the leadership level.

Three Public Consultations to Shape Implementation

The FATF opened a trio of consultations that will influence supervisory practice and private-sector compliance:

1. Guidance to Implement Revised Recommendation 1

   The FATF will consult on practical guidance to embed the updated risk-based approach, with concrete examples aimed at policymakers and regulators. The objective is to make proportionate controls the norm, unlocking access to services where risks are lower without compromising integrity.

2. Potential Revisions to Recommendation 16 (Payment Transparency)

   A consultation on standardizing originator and beneficiary data in payment messages seeks to improve transparency, data quality, and compliance efficiency. The initiative aims to support faster and cheaper payments while preserving robust defenses against illicit finance.

3. Complex Proliferation Financing and Sanctions Evasion Schemes

   The FATF will gather input on best practices and challenges in identifying, assessing, and mitigating proliferation financing risk, and on how it can better support the private sector in meeting CPF obligations. This reflects mounting complexity in evasion networks and supply-chain manipulation.

Strengthening Gatekeeper Compliance Against Corruption

The Plenary reinforced the importance of its Horizontal Review of Designated Non-Financial Businesses and Professions — covering lawyers, accountants, trust and company service providers, and real estate agents. Members were urged to address gaps in applying FATF Recommendations to these gatekeepers, recognizing their pivotal role in preventing misuse of professional services for corruption and laundering schemes.

Women in FATF and the Global Network

The FATF highlighted progress within its Women in FATF and the Global Network initiative and announced the second edition of its Mentoring Programme for March 2025. The emphasis on professional development aims to deepen diversity and leadership across the Global Network.

Private Sector Collaboration: Mumbai Forum in March

Recognizing the central role of industry and civil society in threat response, the FATF’s annual Private Sector Collaborative Forum will be held in Mumbai on 25–27 March 2025. The forum will convene financial and non-financial businesses, civil society, academia, and authorities to address current and emerging risks, exchange practical insights, and inform ongoing policy development.

What This Means for Compliance Teams

• Expect proportionality to feature prominently in supervisory dialogue.

  Institutions should review customer risk assessment models, recalibrate simplified due diligence thresholds, and document justification frameworks for lower-risk scenarios, especially for underserved segments and NPOs.

• Prepare for enhanced payment message data standards.

  Firms should assess messaging formats, data lineage, screening integration, and cross-border routing to pre-empt friction from potential Recommendation 16 updates and align with faster payment environments.

• Refresh typologies and controls for proliferation financing and sanctions evasion.

  Strengthen end-to-end trade, supply-chain, and maritime risk controls, including dual-use goods red flags, transshipment risks, front and shell company detection, and vessel behavior analytics.

• Reassess gatekeeper exposure.

  Financial institutions and DNFBPs should revisit their third-party and professional services risk management, ensuring consistent application of beneficial ownership verification, source-of-funds/source-of-wealth checks, and PEP/corruption indicators for professional intermediaries.

• Monitor jurisdictional changes.

  Update risk assessments, correspondent banking decisions, and EDD triggers to reflect the Philippines’ exit from increased monitoring and the addition of Lao PDR and Nepal to the list.

Looking Ahead With financial inclusion now hardwired into a more agile risk-based approach, the FATF is signaling a pragmatic turn: proportionate controls that expand access while tightening defenses against sophisticated crime, including online child exploitation and proliferation financing. The coming months — shaped by the three public consultations and the March launches and forums — will be pivotal for turning policy into operational reality across the Global Network.

Dive deeper

• FATF ¦ Outcomes FATF Plenary, 19-21 February 2025 ¦ Link
• FATF Video ¦ FATF Plenary - Press Conference February 2025 ¦ Link (YouTube)