HEADER COMPLIANCE GOES HERE
Companies want to maximize profits and tend to opt for de-risking; however, they must take international regulations into account. International legal instruments force them to withdraw from certain sectors, while other instruments tend to encourage them to promote financial inclusion.
Sometimes corporations cannot help but de-risk
International sanction regimes directly lead to the disengagement of companies and promote financial exclusion. Countries in general, and particularly member countries of the EU, must comply with international sanctions. These sanctions oblige them to restrict or even prohibit activities in certain countries or with certain clients / companies. Iran is a blatant example of this financial exclusion. 5 Member states of the EU must comply with the international sanctions of the EU and often with those of the U. S. or other countries, such as a list of products prohibited from import and export( including certain financial products) or list of persons whose financial assets must be seized.
Complying with financial inclusion legislation
Legislation promoting financial inclusion also exists and leaves no choice to businesses. Thus, in the EU, the directive on payment accounts gives people the right to a basic payment account regardless of a person’ s place of residence or financial situation. 6 It is a legal mechanism that guarantees everyone the right to benefit from a bank account with basic services, even if a bank refuses to open an account. This mechanism aims to ensure financial and social inclusion by allowing everyone to have access to essential banking services. In France, this request for access to the account is made to the Banque de France, which is required to indicate an FI that is able to respond favorably to the request. This mechanism does not exist everywhere in the world. But almost all countries reviewed by MONEYVAL indicated they have policies and programs in place to ensure that socially disadvantaged persons( i. e., migrant workers, persons with low incomes, etc.) are able to obtain basic access to the financial system. 7 These basic services include payment accounts through which consumers are able to carry out the following transactions: place funds, withdraw cash and execute and receive payment transactions to and from third parties, including the execution of credit transfer.
But even though the right to a basic account is legally enshrined within the EU, experience and research have begun to raise awareness that households living in poverty need access to a comprehensive range of financial services. 8
For its part, it seems that the Financial Action Task Force( FATF) has taken the measure of the problem. FATF is at the top of the decision-making pyramid in the fight against money laundering and counter-terrorist financing and FATF recommendations end up in the legislations of most countries around the world. FATF is considering modifying somewhat its recommendations in order to reduce de-risking. 9 De-risking, carried out too often, leads to many problems( if customers or certain products / geographic areas are left with no banking services, alternative solutions will be used, such as informal finance).
According to a FATF report,“ In February 2021, the FATF Plenary agreed to establish a project team to analyze and understand better the unintended consequences resulting from the FATF Standards and their implementation. This project examines the unintended consequences related to four broad themes,” among which were( 1) de-risking and( 2) financial exclusion. 10
In 2023, FATF amended its Recommendation 8, concerning nonprofit organizations; those subject to anti-money laundering( AML) regulations tend to reduce their activities with these organizations in order to exclude any risk of involvement in corruption or terrorist financing. The amended Recommendation 8 advocates for promoting the financial inclusion of nonprofit organizations.
In February 2025, FATF Recommendation 1 was amended. This recommendation is essential and concerns the obligation to implement a risk assessment using the risk-based approach methodology. The amendment reviewed the FATF standards and guidance on financial inclusion to allow for simplified due diligence measures in low-risk situations. The objective here is likely to reduce the burden of compliance controls and promote financial inclusion.
This is a good reason to take the time to prepare for ACAMS’ free social certificate on financial inclusion, which covers financial inclusion and risk assessment. 11
Recently, new technologies have also made it possible to provide solutions to promote financial inclusion for populations lacking access to banking services
72 acamstoday. org