Mutual Evaluations

Second round follow-up reports

Under the APG's mutual evaluation follow-up procedures, all members are required to report on progress following the adoption of their mutual evaluation report. In line with the APG's mutual evaluation follow-up publication policy, follow-up reports are only published (i.e. made available to the public on the APG website) upon a member’s removal from the regular follow-up process, or upon request from the member.

Available mutual evaluation follow-up reports can be found in the Documents section under the category Mutual Evaluation Follow-up Reports - 2nd Round and Members and Observers. Currently there are six APG members subject to biennial (reduced) follow-up:

  • Brunei Darussalam;
  • India;
  • China;
  • Hong Kong, China;
  • New Zealand; and
  • Singapore.

Follow-up Report to the Mutual Evaluation Report of Brunei Darussalam, July 2012

The second mutual evaluation report (MER) of Brunei Darussalam was adopted by the APG in 2010.  Brunei Darussalam was placed on regular follow-up with expedited reporting and reported to the APG on progress made to address the deficiencies in its MER in April 2011 (1st ME progress report) and April 2012 (2nd ME progress report).

In 2012, an APG Review Team analysed Brunei Darussalam’s 2nd ME progress report as well as subsequent legislative changes enacted in June 2013, immediately prior to the 2012 APG Annual Meeting.

The Review Team found that Brunei Darussalam had made substantial progress including that Brunei Darussalam had brought the level of compliance with the six core FATF Recommendations to a level essentially equivalent to LC.

In line with the APG Mutual Evaluation Follow Up Procedures 2013, biennial updates (reduced follow-up) will apply inter alia if APG members decide that a member has taken ‘sufficient action’ to be considered for removal from regular follow-up. For ‘sufficient action’ to be shown, members have to be satisfied that the member has an effective AML/CFT system in force, with the member having implemented the six core FATF Recommendations (Recommendations 1, 5, 10, 13, SR.II and SR.IV) at a level essentially equivalent to a C or LC. Such a decision needs to be supported by a detailed Analysis Report prepared by a Review Team.

The detailed Analysis Report by the Review Team provides an overview of the measures that Brunei Darussalam has taken to address the major deficiencies relating to Recommendations rated NC or PC since its last mutual evaluation. The progress shown indicates that sufficient action has been taken by Brunei Darussalam to address those major deficiencies, and in particular related to Recommendations 1, 5, 10, 13, SR.II and SR.IV. It should be noted that this does not constitute a revision of the ratings contained in the MER, but is a reflection of the subsequent progress made by Brunei Darussalam.

On the basis of the findings in the 2012 Review Team Analysis Report, APG members agreed at the 2013 Annual Meeting that Brunei Darussalam has taken ‘sufficient action’ to be removed from regular ME follow-up and be placed on biennial update (reduced follow-up) reporting and that, in accordance with the APG publication policy for ME follow-up information, the 2012 Review Team Analysis Report, attaching Brunei Darussalam’s 2012 ME progress report, be published on the APG website.

Please see the Documents section under the category Mutual Evaluation Follow-up Reports - 2nd Round and Members and Observers for Brunei Darussalam's follow-up report.

Follow-up Report to the Mutual Evaluation Report of China, February 2012

The FATF has approved and published the follow-up report for China. The first mutual evaluation report of China was adopted in 2007.

China was placed on an enhanced follow-up process as a result of partially compliant and non-compliant ratings in certain of the Core and Key Recommendations in its mutual evaluation report. China reported back at each FATF Plenary on the progress it had made in addressing the deficiencies identified in the mutual evaluation report.

China made significant progress and in October 2008, the Plenary agreed to place China on the regular follow-up process, whereby it would provide the FATF Plenary with annual progress reports.

China took additional action to address the deficiencies in its AML/CFT regime and was therefore taken off the regular follow-up process in February 2012. Henceforth, China will report back to the Plenary on any further improvements to its AML/CFT regime on a biennial basis.

The decision by the FATF to remove a country from the regular follow-up process is based on updated procedures agreed in October 2008. These procedures require a country to have taken sufficient and effective action to address the compliance levels of Core Recommendations 1, 5, 10, 13, SR II and IV and overall sufficient and effective action to address the compliance levels of Key Recommendations 3, 4, 23, 26, 35, 36, 40, SR I, SR III, SR V, where those Recommendations were previously rated as partially compliant or non-compliant. “Sufficient and effective action” is defined as a level essentially equivalent to compliant (C) or largely compliant (LC).

Please see the Documents section under the category Mutual Evaluation Follow-up Reports - 2nd Round and Members and Observers - China for China's follow-up report.

Follow-up Report to the Mutual Evaluation Report of India, June 2013

The FATF has approved and published the follow-up report for India. India's first mutual evaluation report (MER) was adopted in 2010.

India was placed in the regular follow-up process for mutual evaluation purposes because of partially compliant (PC) ratings on certain core and key Recommendations. Since the publication of the MER, India has been reporting back to the FATF on a regular basis on the progress made in the implementation of its Action Plan to strengthen India’s AML/CFT System. India has made significant progress with regard to the implementation of this action plan.

In particular, since the adoption of its MER in 2010, India focused its attention on:

  • rectifying nearly all of the technical deficiencies identified with respect to the criminalisation of money laundering (ML) and terrorist financing (TF) and the implementation of effective confiscation and provisional measures;
  • substantially addressing the technical deficiencies identified in relation to customer due diligence and other preventive measures;
  • further enhancing its outreach programme to provide guidance to the financial sector on the suspicious transaction reporting obligations and engaging in extensive compliance monitoring; and
  • bringing several of the Designated Non-Financial Businesses and Professions (DNFBPs) within the scope of its preventive anti-money laundering (AML) / combating the financing of terrorism (CFT) measures.

At the June 2013 Plenary meeting, the FATF decided that India had reached a satisfactory level of compliance with all of the core and key Recommendations and could be removed from the regular follow-up process.

The decision by the FATF to remove a country from the regular follow-up process is based on its updated mutual evaluation procedures agreed in October 2009. These procedures require a country to have taken sufficient and effective action to address the compliance levels of Core Recommendations 1, 5, 10, 13, SRII and SRIV and overall sufficient and effective action to address the compliance levels of Key Recommendations 3, 4, 23, 26, 35, 36, 40, SRI, SR III and SR V, where those Recommendations were previously rated as partially compliant or non-compliant. “Sufficient and effective action” is defined as a level essentially equivalent to compliant (C) or largely compliant (LC).

Please see the Documents section under the category Mutual Evaluation Follow-up Reports - 2nd Round and Members and Observers - India for India's follow-up report.

Follow-up Report to the Mutual Evaluation Report of Hong Kong, China, October 2012

The FATF has approved and published the follow-up report for Hong Kong, China. Hong Kong, China's third mutual evaluation report (MER) was adopted in 2008.

In the 2008 MER, Hong Kong, China was rated partially compliant (PC) on a number of core (R.5, R.10 and SR.II) and key (R.3, SR.I and SR.III) recommendations.

In October 2012, the FATF recognised that Hong Kong, China had made significant progress in addressing the deficiencies identified in the MER. The FATF agreed that Hong Kong, China should now report on any further improvements to its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) system on a biennial update basis.

The decision by the FATF to remove a country from the regular follow-up process is based on its updated mutual evaluation procedures agreed in October 2008. These procedures require a country to have taken sufficient and effective action to address the compliance levels of Core Recommendations 1, 5, 10, 13, SRII and SRIV and overall sufficient and effective action to address the compliance levels of Key Recommendations 3, 4, 23, 26, 35, 36, 40, SRI, SR III and SR V, where those Recommendations were previously rated as partially compliant or non-compliant. “Sufficient and effective action” is defined as a level essentially equivalent to compliant (C) or largely compliant (LC).

Please see the Documents section under the category Mutual Evaluation Follow-up Reports - 2nd Round and Members and Observers for Hong Kong, China’s follow-up report.

Follow-up Report to the Mutual Evaluation Report of New Zealand, October 2013

The FATF has approved and published the follow-up report for New Zealand.  New Zealand's third mutual evaluation report (MER) was adopted in 2010.

In the 2010 MER, New Zealand was rated partially compliant (PC) or non-compliant (NC) on 24 recommendations.  One of the core (R5) and one of the key (R23) recommendations was rated NC and one of the key recommendations (SRIII) was rated PC.

In October 2013, the FATF found that New Zealand had now reached a satisfactory level of compliance with all six core Recommendations and all but one key Recommendation. Although New Zealand had not yet reached a satisfactory level of compliance with SR.III it had taken concrete actions aimed at addressing the deficiencies identified in its 2009 MER.

The FATF retains some flexibility with regard to the key Recommendations if substantial progress has also been made on the overall set of Recommendations that have been rated PC or NC.  Given the significant progress made overall, the FATF found that this would be an appropriate circumstance to exercise its flexibility and remove New Zealand from the regular follow-up process. The FATF agreed that New Zealand should now report on any further improvements to its Anti-Money Laundering / Combating the Financing of Terrorism (AML/CFT) system on a biennial update basis.

The decision by the FATF to remove a country from the regular follow-up process is based on its updated mutual evaluation procedures agreed in October 2008. These procedures indicate that, for a country to have taken sufficient action to be considered for removal from the process, it must have an effective AML/CFT system in force, under which it has implemented all core and key Recommendations at a level essentially equivalent to C or LC, taking into account that there would be no re-rating. The FATF does, however, retain some limited flexibility with regard to the key Recommendations if substantial progress has also been made on the overall set of Recommendations that have been rated PC or NC.

Please see the Documents section under the category Mutual Evaluation Follow-up Reports - 2nd Round and Members and Observers for New Zealand’s follow-up report.

Follow-up Report to the Mutual Evaluation Report of Singapore, February 2011

The FATF has approved and published the follow-up report for Singapore. The second mutual evaluation report (MER) of Singapore was adopted in 2008. At the same time, Singapore was placed in the regular follow-up process.

Singapore reported back to the FATF in February 2010 (first follow-up report). Singapore indicated that it would report to the Plenary again in February 2011 concerning the additional steps taken to address the deficiencies identified in the report, and would apply to move from regular follow-up to biennial updates.

In February 2011, the FATF Plenary noted that sufficient action had been taken to address the deficiencies identified and agreed that Singapore be moved to the biennial follow-up reporting process.

The decision by the FATF to remove a country from the regular follow-up process is based on its updated mutual evaluation procedures agreed in October 2008. These procedures require a country to have taken sufficient and effective action to address the compliance levels of Core Recommendations 1, 5, 10, 13, SRII and SRIV and overall sufficient and effective action to address the compliance levels of Key Recommendations 3, 4, 23, 26, 35, 36, 40, SRI, SR III and SR V, where those Recommendations were previously rated as partially compliant or non-compliant. “Sufficient and effective action” is defined as a level essentially equivalent to compliant (C) or largely compliant (LC).

Please see the Documents section under the category Mutual Evaluation Follow-up Reports - 2nd Round and Members and Observers - Singapore for Singapore's follow-up report.