The organisation said that the growth of digital financial transactions requires a better understanding of how individuals are identified and verified in the world of digital financial services. The guidance is intended to assist governments, regulated entities and other relevant stakeholders in determining how digital ID systems be used to conduct certain elements of customer due diligence under FATF Recommendation 10.

The global anti-money laundering body said that following the amendments to its Recommendations in October 2018 to clarify the application of anti-money laundering and combating the financing of terrorism (AML/CFT) obligations to virtual asset activities, it has had a fruitful dialogue with market players (such as issuers, exchangers, wallet and other service providers). 

These discussions focused on the mapping of virtual asset services and business models, the measures applicable to virtual asset transfers and the implementation of specific FATF Recommendations in a virtual asset context, in particular measures on customer due diligence, on recordkeeping and on reporting of suspicious transactions. 

FATF said that this input will help finalise the interpretative note to Recommendation 15 on new technologies and the guidance paper in June 2019. 

Other issues that were discussed included digital ID, with the FATF stating that it is developing guidance on the use of digital identity for the purposes of conducting customer due diligence. 

The application of technologies in the context of AML/CFT, such as machine learning, data mining and artificial intelligence, was also up for discussion, as well as the opportunities and challenges in conducting due diligence, including data protection and privacy. 

The Forum is an opportunity for the FATF and its members to engage directly with the private sector on AML/CFT issues. 

This year, 300 private sector representatives participated in the forum, including from the financial sector, civil society, and FATF members and observers. 

In February, FATF issued a consultation on a new interpretive note to Recommendation 15, as part of its efforts to mitigate the money laundering and terrorism financing risks linked to virtual assets. 

The interpretative note will be adopted as part of the FATF Standards next month.

In October last year, the AML body called for countries to "urgently" take steps to prevent the misuse of virtual assets, among concerns that bad actors will gravitate to unregulated jurisdictions, jeopardising AML/CFT controls worldwide and allowing havens for money laundering, terror finance, and other forms of illicit finance.