Countering money laundering (ML), terrorist financing (TF), and the financing of proliferation of weapons of mass destruction (PF) and data protection and privacy (DPP) are significant public interests. Both serve important objectives, including upholding human rights and fundamental freedoms1 (such as the right to privacy) and protecting the public from criminal activities, including terrorism. These interests are not in opposition nor inherently mutually exclusive. An effective regime for anti-money laundering, counter-terrorist financing and counter-proliferation financing (AML/CFT/CPF) requires the public and private sector to pursue both AML/CFT/CPF and DPP objectives.

This report aims to help jurisdictions that are considering enhancing information exchange among private sector entities to design and implement such initiatives responsibly, in accordance with data protection and privacy rules, so that the risks associated with increased sharing of personal data are appropriately taken into account. To strike an adequate balance, the FATF has consulted data protection authorities, academics, technology providers and the private sector in this work.2 AML/CFT/CPF systems seek to deprive organised criminal groups, corrupt officials, terrorist organisations, weapons proliferators, or drug or human traffickers from accessing the financial system. Despite these efforts, criminal organisations are becoming more sophisticated and taking advantage of gaps in the system. A single financial institution has only a partial view of transactions and sees one small piece of what is often a large, complex puzzle. Criminals exploit this information gap by using multiple financial institutions within or across jurisdictions to layer their illicit financial flows. Without more accurate and consistent information, it becomes increasingly difficult for individual financial institutions to detect these activities. By using collaborative analytics, bringing data together, or developing other sharing initiatives in responsible ways, financial institutions seek to build a clearer picture of the puzzle, to better understand, assess, and mitigate money laundering and terrorist financing risks.