CoE ¦ MONEYVAL Annual Report 2024

MONEYVAL’s 2024 Year in Review: From the close of the 5th round to the launch of a more demanding 6th round

The Council of Europe’s Committee on the Evaluation of Anti‑Money Laundering Measures and the Financing of Terrorism concluded its 5th round of mutual evaluations, published final reports for the last group of assessed jurisdictions and became the first body in the FATF Global Network to launch on‑the‑ground work under the FATF’s revised 6th‑round methodology. Those twin developments — finishing a long evaluation cycle while initiating a new one structured to place greater emphasis on measurable outcomes and contextual risks — make 2024 a watershed moment for European AML/CFT peer review.

What changed: the 6th round’s higher bar

The 6th round of mutual evaluations (starting with Latvia’s on‑site in November 2024) operates under the FATF’s updated methodology and universal procedures. That new approach intensifies scrutiny of effectiveness, requires evaluators to weigh national context and major risks more explicitly, and makes recommendations more results‑oriented. Practically, this demands sharper evidence of operational outcomes (e.g., quality and results of investigations, prosecutions, asset recovery), stronger risk‑based supervision of both financial institutions and DNFBPs, and improved use of financial intelligence. MONEYVAL’s decision to relaunch and intensify assessor training in 2024 reflects recognition that this methodological shift requires more highly skilled, better‑prepared evaluation teams.

Key summary findings from the closing of the 5th round

MONEYVAL’s final 5th‑round reports (adopted through December 2024) show a mixed picture across Europe and neighbouring jurisdictions. Strengths and persistent weaknesses that emerge from the consolidated 5th‑round findings are important for practitioners, compliance leaders and policy makers:

• Relative strengths. On several Immediate Outcomes jurisdictions performed well. International co‑operation (IO2) was frequently a strong area, reflecting robust legal frameworks and active engagement in Mutual Legal Assistance (MLA) and information exchanges. Transparency of beneficial ownership and publication of registers advanced in many jurisdictions. Several assessed jurisdictions strengthened their risk understanding and made measurable improvements in technical compliance, often through follow‑up and re‑rating processes.
• Recurring gaps in effectiveness. The 5th‑round results made clear that good or improving technical compliance does not automatically translate into effective outcomes. Supervision of DNFBPs and application of risk‑based supervision generally lagged behind. The use and quality of suspicious transaction reports (STRs) were often inadequate, particularly outside the banking sector. Financial intelligence units produced useful outputs in some states, but analytical capacity was uneven. The most serious shortfalls were seen in the investigation and prosecution of money‑laundering (IO7), asset recovery and confiscation results (IO8), and the implementation and enforcement of targeted financial sanctions for terrorism and proliferation (IO10 and IO11).
• Terrorist financing and sanctions remain problem areas. Across the 5th‑round reports, implementation of targeted financial sanctions (TFS) related to both terrorism and proliferation was frequently weak: many jurisdictions lacked robust mechanisms to ensure timely and uninterrupted application of UN Security Council measures or had practical gaps in freezing/asset tracking and enforcement. Because these functions can be critical to counter‑terrorism and counter‑proliferation efforts, the shortfalls are consequential.
• Asset recovery shortfalls are systemic. While many countries can seize assets, fewer demonstrate consistent, proportionate and dissuasive confiscation outcomes that match estimated scales of criminal proceeds. In practice, limited parallel financial investigations, evidential gaps, and inconsistent use of forfeiture tools reduce the impact of AML/CFT regimes.

Bastian Schwind-Wagner_Follow "MONEYVAL’s 2024 work closed the 5th evaluation round and launched the more demanding 6th round, shifting focus from legal compliance to demonstrable operational results in AML/CFT. The year exposed persistent gaps in DNFBP supervision, financial investigations, asset recovery and targeted financial sanctions, underscoring the need for stronger enforcement, better STR quality, and sustained resourcing."

Notable country examples from the final 5th‑round work

Jersey (UK Crown Dependency) achieved a high level of effectiveness in many Immediate Outcomes. The report praised risk understanding, co‑operation, transparency of beneficial ownership and asset‑recovery processes, while noting remaining needs to strengthen private‑sector compliance and to ensure prosecutions more consistently target money‑laundering as a stand‑alone offence.

Guernsey recorded substantial effectiveness across many outcomes, with sound FIU and supervisory functions for banks, but the report flagged weaker supervision of non‑financial sectors (TCSPs and DNFBPs), limited prosecutions relative to risk and the need to increase confiscation activity.

Bosnia and Herzegovina was assessed as moderately effective across most Immediate Outcomes. The evaluation underlined gaps in TF risk understanding and sanctions implementation, shortcomings in DNFBP supervision, and the need for stronger asset‑recovery arrangements and prosecutorial prioritisation in line with national risk.

Follow‑up, re‑ratings and compliance enhancement activity

The 5th round’s lifecycle showed the practical importance of follow‑up procedures. By the end of 2024 several jurisdictions — including Monaco, Gibraltar, Croatia, Poland, Estonia and others — had improved technical compliance through follow‑up reporting and re‑ratings. Gibraltar, notably, brought all FATF Recommendations to largely compliant or compliant status and exited the FATF “increased monitoring” list in 2024.

At the same time MONEYVAL applied its Compliance‑Enhancing Procedures (CEPs) to jurisdictions that had not resolved critical technical gaps within expected timeframes; in 2024 Georgia and the Slovak Republic were placed under Step 1 of CEPs. The CEP mechanism makes the Committee’s political leadership and the Council of Europe apparatus available to press for necessary legal and regulatory change where specific high‑impact deficiencies endure.

Operational priorities for supervisors and the private sector

Several clear priorities arise for stakeholders who want to translate regulatory standards into measurable outcomes:

• Strengthen DNFBP supervision and licensing. The weakest effectiveness findings often trace back to low‑capacity, underresourced or non risk‑based supervision of DNFBPs (trust and company service providers, law firms, notaries, estate agents). Supervisors need better sectoral risk assessments, more frequent inspections and better calibrated sanctions.
• Raise the quality and operational relevance of STRs. Improving the quantity of STRs is not enough; jurisdictions need to focus on producing higher‑value reports, guided by clear feedback loops between FIUs, reporting entities and law enforcement. Quality analytical capacity within FIUs is essential.
• Invest in financial investigations and parallel financial probing. Many jurisdictions investigate predicate crimes without fully exploiting financial‑investigation techniques that trace proceeds, enable asset freezes and build stronger, convictions‑leading cases.
• Close implementation gaps on TFS and proliferation sanctions. States must ensure legal mechanisms and operational protocols to implement UNSC and regional measures seamlessly, including for VAs and digital‑asset mixing/obfuscation risks.
• Prioritise asset recovery infrastructure and case prioritisation. Effective asset recovery requires not only legal tools but specialised prosecutors, asset management and disposal systems, cross‑border co‑operation and an administrative will to pursue recovery as a core policy objective.

MONEYVAL’s regional leadership, typologies and EU supranational measures work

MONEYVAL did more than evaluate: it also advanced regionally relevant research and guidance. A December 2024 horizontal study on EU supranational measures examined how directly applicable EU rules were treated under MONEYVAL’s 5th round and feeds into a joint FATF‑MONEYVAL initiative to create practical guidance for assessors on supranational elements. Given that many MONEYVAL members are EU states (or align with the EU AML/CFT acquis), this work is critical to ensure consistent application of standards when supranational rules intersect with FATF obligations.

MONEYVAL also advanced typology work on money‑laundering and terrorism‑finance risks arising from armed conflicts — an area of heightened concern as con ict‑related financial channels (use of crowdfunding, virtual assets, trade‑based money‑laundering and dual‑use trans‑shipment) become more prominent. This project, led by Ukraine, aims to deliver operationally useful typologies to help law enforcement, FIUs and supervisors detect and disrupt illicit channels linked to armed conflicts.

Partnerships: FATF, FSRBs, Council of Europe bodies and the Egmont Group

MONEYVAL remained an active and visible participant in the broader Global Network. Its Secretariat and Chair engaged frequently with the FATF Plenary and working groups, the FATF President, other FATF‑Style Regional Bodies (FSRBs), and the Egmont Group. The Committee deepened ties across the Council of Europe’s committees — working with the Conference of the Parties to the Warsaw Convention (CETS No. 198), the PC‑RAC on asset recovery and other bodies concerned with sports integrity, anti‑corruption and human‑rights‑aligned enforcement. That cross‑institutional engagement is a practical strength: MONEYVAL can bring its evaluation experience to inform legal instruments (e.g., an additional protocol to the Warsaw Convention) and draft guidance, and conversely bring Council of Europe standards (including human rights safeguards) into AML/CFT practice.

Resourcing and the implementation challenge

MONEYVAL’s 2023–2027 Strategy sets an ambitious programme: more robust evaluations, typologies, training and increased regional leadership. Implementation clearly depends on sustained technical and financial support. In 2024 high‑quality participation by member jurisdictions, secondments of experts to the Secretariat and a single voluntary contribution from Romania were helpful, but the Secretariat has warned that additional voluntary funding and secondments will be needed to execute the Strategy and deliver consistent, high‑quality mutual evaluations during the 6th round.

Implications for compliance practitioners, counsel and investigators

The transition to a more outcome‑driven evaluation framework has practical consequences across the private and public sectors:

• Compliance teams should expect deeper questions about the substantive outcomes of AML/CFT programmes. Assessors will increasingly examine whether systems actually lead to disruptors, prosecutions and asset recovery, not only whether policies and procedures exist on paper.
• Firms that rely on DNFBP relationships (lawyers, corporate service providers, estate agents) must be prepared for enhanced supervision, more demanding CDD standards (including on legal arrangements), and stronger public‑authority scrutiny.
• FIUs and law enforcement should continue to professionalise financial investigations. Jurisdictions that invest in FIU analytical capability, structured feedback mechanisms, and sustained parallel financial investigations will both perform better in evaluations and strengthen domestic crime‑fighting outcomes.
• Legal and compliance counsel should track evolving regulatory expectations on VAs, prejudice to TFS effectiveness, and the growing intersection of AML/CFT with sanctions and export‑control enforcement (particularly in PF cases).

Bottom line: a shift from “has the law” to “does it work”

MONEYVAL’s 2024 work — closing a decade‑long 5th round and launching the 6th under the new FATF methodology — marks a clear shift in emphasis: modern AML/CFT peer review will increasingly ask not merely whether jurisdictions have the right laws and frameworks, but whether those frameworks achieve impact. For governments, supervisors and the private sector, the message is unambiguous: legal compliance remains necessary, but it is not sufficient. Demonstrable, proportionate and sustained operational results — higher‑quality STRs and use of financial intelligence, effective supervision of DNFBPs, prosecutions that secure criminal convictions for laundering and robust asset recovery — will increasingly define a jurisdiction’s standing in the global AML/CFT architecture.

For practitioners, the immediate priorities are practical: improve STR quality, strengthen controls and evidence gathering that support financial investigations, invest in training for supervisors and DNFBP gatekeepers, and proactively address sanctions implementation gaps. For policy makers and international partners, the challenge is to provide the resources and political will that allow money‑laundering and sanctions enforcement to deliver measurable results. MONEYVAL’s 2024 record shows the direction — and establishes a high bar for how effectiveness will be judged across Europe in the years ahead.

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