ABA comments on FATF’s revision to Recommendation 16

The American Bankers Association (ABA) has expressed cautious support for the Financial Action Task Force’s (FATF) proposed revisions to Recommendation 16 (R.16), which aims to enhance transparency in payment systems to combat illicit financial activities. However, the ABA emphasises the need for a more measured approach to avoid unintended consequences.​

In a recent letter to FATF President T. Raja Kumar, the ABA acknowledged the importance of updating R.16 to address the evolving landscape of payment methods, including the rise of convertible virtual currencies. The association supports the initiative to reconsider R.16 but insists that revisions should be informed by comprehensive consultations with industry experts and stakeholders to ensure effective implementation.​

The ABA raised concerns about the broad expansion of R.16’s scope, particularly the inclusion of various domestic and cross-border payment methods such as Automated Clearing House (ACH) transfers, immediate payments, and payment cards. The association warns that without thorough discussions on the illicit finance risks associated with these payment forms, the revisions could lead to compliance challenges and operational complexities across different jurisdictions.​

Given the complexity of the proposed changes and the varying compliance frameworks globally, the ABA recommends extending the current comment deadline. This extension would allow stakeholders sufficient time to provide thoughtful input, ensuring that FATF’s decision-making is informed by the necessary technical and operational expertise.​

The ABA’s stance underlines the importance of balancing the need for enhanced payment transparency with the practical considerations of implementing such changes across diverse financial systems. The association advocates for a collaborative approach to revising R.16, one that effectively addresses illicit finance risks without imposing undue burdens on financial institutions.​

For more information and to view the ABA’s full letter, visit: ABA Letter to FATF re: R.16.