FATF ¦ R.14 Mon­ey or Val­ue Trans­fer Ser­vices (MVTS)

Recommendation 14: Strengthening Oversight of Money or Value Transfer Services

Money or value transfer services (MVTS) are a backbone of modern payments — covering remittance companies, hawala-style networks, and other non-bank providers that move funds domestically and across borders. Their speed and reach make them essential for financial inclusion and cross-border commerce. At the same time, those very features can be exploited for money laundering, terrorist financing, and sanctions evasion. FATF Recommendation 14 sets out clear expectations for countries to license, monitor, and sanction MVTS providers to mitigate these risks without undermining legitimate use.

Licensing and Registration: The First Line of Defense

Recommendation 14 requires that all natural or legal persons providing MVTS be licensed or registered. This is not a box-ticking exercise — it is a gatekeeping function. Licensing ensures competent authorities can:

• Vet ownership and management for suitability.
• Assess business models and risk exposures.
• Establish accountability for compliance breaches.

A rigorous licensing or registration regime enhances transparency and creates traceability of operators. Crucially, it forms the foundation for ongoing supervisory engagement and the application of proportionate AML/CFT obligations.

Active Monitoring and Compliance Oversight

Licensing alone is not enough. Countries must implement effective systems to monitor MVTS providers and ensure they comply with the full set of relevant FATF obligations. This includes, at minimum:

• Customer due diligence and ongoing monitoring aligned to risk.
• Beneficial ownership transparency for customers and agents.
• Suspicious transaction reporting and sanctions screening.
• Record-keeping with timely access for competent authorities.
• Internal controls, independent audit, and staff training.

Supervision should be risk-based. Providers with higher cross-border flows, complex agent networks, or exposure to high-risk jurisdictions warrant deeper scrutiny. Authorities should use a mix of off-site reviews, targeted thematic inspections, and on-site examinations to test real-world compliance and control effectiveness.

Bastian Schwind-Wagner _Follow

"Recommendation 14 ensures MVTS operate under clear rules that protect the financial system. Licensing, monitoring, and agent oversight reduce exploitation by illicit actors while preserving legitimate services.

Authorities should target unauthorized operators and demand strong AML/CFT programs from providers and agents. With proportionate sanctions and coordinated supervision, countries can curb risks without stifling inclusion."

Tackling Unlicensed Activity and Shadow Networks

Recommendation 14 obliges countries to proactively identify MVTS operators that are conducting business without proper authorization. Unlicensed activity is a red flag — often linked to informal networks, nested accounts, or front operations. Competent authorities should deploy:

• Market scans and intelligence from banks, telecoms, and payment processors.
• Data analytics on suspicious transaction flows and corridor anomalies.
• Cooperation with law enforcement and tax authorities.
• Public awareness campaigns to deter consumers from using unlicensed services.

When unauthorized activity is detected, appropriate sanctions must follow. These should be credible, dissuasive, and proportionate — ranging from cease-and-desist orders and administrative penalties to criminal enforcement for egregious cases.

Agent Networks: Inclusion, Oversight, and Accountability

MVTS providers often rely on agents to reach customers, especially in remote or underserved areas. Recommendation 14 addresses agent risk head-on:

• Agents must be licensed or registered by a competent authority, or the MVTS provider must maintain a current, accessible list of agents for authorities in all relevant countries of operation.
• Agents must be included in the provider’s AML/CFT programme. This means proper onboarding, training, transaction monitoring, and controls that reflect the provider’s risk assessment.
• Providers must monitor agents for compliance — testing KYC processes, reviewing suspicious activity handling, and conducting periodic audits.

The message is clear: agents are not an outsourcing loophole. They are part of the regulated perimeter and must meet the same standards of integrity and compliance.

Avoiding Duplication for Already-Regulated Financial Institutions

Recommendation 14 avoids unnecessary duplication. If a natural or legal person is already licensed or registered as a financial institution under national law and is permitted to provide MVTS, and is subject to the full set of FATF obligations, a separate MVTS license is not required. This streamlines regulation while maintaining robust AML/CFT safeguards.

Practical Implications for Policymakers and Supervisors

• Define MVTS clearly in law to capture all relevant business models, including informal value transfer systems.
• Establish fit-and-proper criteria for owners and managers and require disclosure of complex ownership structures.
• Build a risk-based supervisory framework with clear inspection cycles and thematic priorities, focusing on agent oversight, cross-border flows, and high-risk corridors.
• Integrate sanctions screening expectations and ensure providers can promptly implement new listings.
• Coordinate domestically across financial regulators, FIUs, law enforcement, and customs to detect unauthorized activity.
• Promote international cooperation to oversee providers and agents operating across jurisdictions and to address nested or correspondent relationships.

What MVTS Providers Should Do

• Obtain the required license or registration before starting operations and keep all approvals current.
• Implement a risk-based AML/CFT programme that covers all channels, products, and agents.
• Maintain a complete, up-to-date agent registry and make it accessible to competent authorities.
• Monitor agent performance, remediate deficiencies quickly, and terminate relationships where necessary.
• Report suspicious transactions promptly and maintain robust records to support investigations.
• Engage constructively with supervisors and invest in training, technology, and independent testing.

The Bottom Line

Recommendation 14 is about bringing MVTS into a well-regulated, transparent environment where innovation and inclusion are balanced with strong safeguards. Licensing, effective monitoring, agent oversight, and firm action against unauthorized operators are the pillars. When implemented properly, these measures protect customers, uphold financial integrity, and reduce the misuse of fast, cross-border value transfer channels for illicit finance.

Dive deeper

• FATF ¦ The FATF Recommendations ¦ Link
• FATF ¦ Luxembourg’s measures to combat money laundering and terrorist financing ¦ Link