The Financial Action Task Force (FATF)'s updated recommendations on anti-money laundering (AML) policies will encourage weaker jurisdictions to tighten their AML laws, especially where tax crime is concerned, according to a financial crime expert.

The Paris-based inter-governmental body published its revised recommendations on February 16, after consulting with governments, the private sector and civil society for more than two years.

The new recommendations make tax crime a predicate to money laundering, which ultimately means such activity will become punishable by the same laws that cover AML.

"In an environment where there is already significant political pressure in relation to a clamp-down on tax crimes (for example, the Foreign Account Tax Compliance Act (Fatca), recent European agreement in relation to co-operation associated with Fatca, and pressure from the Organisation for Economic Co-operation and Development) and against corruption (such as the UK Bribery Act and the US Foreign Corrupt Practices Act), any impacts will not be significant," says Tony Wicks (pictured), director of AML at financial crime solutions provider Nice Actimize in London. "But the recommendations will provide a large nudge for other jurisdictions to clean up corruption and increase tax transparency."

Other than these effects, the consensus is that the revised recommendations will not bring any significant changes.

"Changes targeted at implementation and practice at financial institutions will mostly be viewed with little surprise," says Wicks. "Financial institutions will not be leaping to make immediate changes for the new requirements, but will most definitely include them as part of their standard compliance policy review cycles."

Jonathan Fisher, a London barrister specialising in money laundering and corporate crime, agrees. "I don't think there's anything there that's taken me by surprise," he says. "I think we'll just see the machine moving on – the wheels will continue to turn in the AML industry."

This article was first published on Risk