Outcomes of the IIIrd Forum of Parliamentarians of the EAG Member States

On 29 May, 2024 in the margins of the EAG 40th Plenary, the parliamentarians of the EAG Member States held the III Forum dedicated to the sharing of experience and best practices in the legislative regulation of ML/TF risks related to the implementation of innovation and new financial technologies including the regulation of virtual assets.

Parliamentarians and members of delegations from EAG Member States, Iran, Mongolia, UAE, USA, FATF, MENAFATF, UNOCT and other international organisations participated in the Forum.

Participants emphasised in their speeches that the format of the Forum is of particular importance and uniqueness, as it enables representatives of legislative and executive authorities, including financial intelligence units, to meet on a single platform to discuss topical issues and law enforcement practice in the AML/CFT area, which is closely related to financial stability and security issues.

Parliamentarians noted that new technologies have the potential to develop and expand the financial inclusion for people. At the same time, the rapid pace of innovation makes the future of national financial systems unpredictable. There is a risk of money laundering and the collection and movement of funds for the terrorist financing purpose while the legal uncertainty remains around new financial technologies, the use of artificial intelligence, quantum computing and the circulation of cryptocurrencies.

The speakers highlighted the increase in cases of Internet fraud, sale of personal data, opening of DROP accounts, misuse of financial technologies, etc. According to the parliamentarians, the work on countering the new challenges and threats associated with the use of innovation should become a matter for the whole of society.

During the Forum, it was stated that the exchange of experience and best practices in legislative regulation would allow legislators and law enforcement agencies to look at ML/TF risks from a different angle and to take effective measures to minimise them. Parliamentarians and law enforcement agencies of the EAG Member States will only be able to strengthen financial security in the Eurasian region by joining forces.

In addition to the effective implementation of FATF Recommendation 15 on new technologies and the regulation of virtual assets, parliamentarians noted the importance of improving legislation to implement other requirements of the FATF standards, including those related to customer due diligence, entry into financial markets, transparency of beneficial ownership, etc.

It was important for the III Forum of parliamentarians to receive feedback from some delegations on the use of the reports presented at the previous Forums and implementation of the experience of other EAG Member States in the legislative regulation of AML/CFT issues.

The Forum participants discussed the forthcoming round of mutual evaluations of EAG member states and the related need to implement the updated FATF standards in national legislation.

At the end of the Forum, the participants adopted a Declaration of outcome (enclosed) reflecting their conviction of the positive impact of technology and digitalisation on the accessibility and efficiency of financial services, the need for a prior assessment of the risks of abuse of financial technologies prior to their introduction, and their commitment to the principle of strict implementation of international standards and joint efforts to combat predicate offences, including cyber fraud and cyber terrorism.

The Forum once again confirmed the effectiveness of the interparliamentary communication platform and the close cooperation between parliamentarians and the financial intelligence units of the EAG Member States.

EAG Secretariat

DECLARATION OF OUTCOME
of the III Forum of Parliamentarians of the EAG Member States

As the results of the III Parliamentary Forum, the representatives of parliaments and financial intelligence units of the EAG Member States, having discussed the issues of legislative regulation of money laundering and terrorist financing risks related to the implementation of innovation and new financial technologies, declare the following.

The Forum participants believe that technological development and digitalisation have a positive impact on the level of financial inclusion for people and increase the efficiency of money remittances and payments in the economy.

Innovation in business processes in line with international standards makes financial services attractive and contributes to the well-being of society. The turnover of virtual assets based on decentralised data storage technologies is growing as well as circulation of digital currencies and tokenised securities.

In parallel, the availability of financial technology is leading to an increase in cybercrime and the amount of damage caused by cybercriminals. The abuse of innovative financial messaging methods and social engineering techniques is a global concern for law enforcement and regulatory agencies around the world.

In this context, the participants of the III Forum of Parliamentarians of the EAG Member States agreed on the need for a preliminary assessment of the risks of using new financial technologies for illicit purposes prior to their implementation. The parliamentarians reiterate their strong commitment to the principle of legislative countermeasures against the abuse of innovation and financial technologies and virtual assets, including through the strict implementation of international standards.

The participants call on the EAG Member States, as well as other jurisdictions in the FATF Global Network, to join efforts to combat transnational criminals who use innovations to the detriment of the public interest, including for the purposes of cyber fraud and cyber terrorism.