Modernising Wire Transfer Regulations: The Future of FATF's Revised R.16

The FATF’s second consultation on Recommendation 16 closes with a call for smarter, fairer compliance standards.

A Pivotal Moment for Wire Transfer Regulations

On 18 April 2025, the Financial Action Task Force (FATF) concluded its second public consultation on the proposed revisions to Recommendation 16 (R.16), a key component of global wire transfer regulations. These revisions aim to modernise outdated frameworks, improve payment transparency, and strengthen the global fight against money laundering and terrorist financing. At OpusDatum, we welcomed the opportunity to contribute, drawing from our extensive advisory experience in AML compliance, payment transparency, and cross-border payment regulation.

Progress Worth Praising

As the global financial landscape becomes increasingly interconnected, it’s essential that wire transfer regulations keep pace. The FATF’s revised R.16 proposals reflect this need for evolution. We welcomed many of the changes put forward, particularly the shift towards structured and harmonised data requirements. These changes are critical to enabling straight-through processing and ensuring interoperability between systems across different jurisdictions. We also support the adoption of the ‘instruction route’ model to define the beginning of the payment chain, a practical and realistic approach that reflects how financial transactions operate in real life.

Equally important is the proposal's flexible approach to Confirmation of Payee (CoP) mechanisms. The option for institutions to implement either pre-validation or post-validation models offers a pragmatic solution to the increasing threat of fraud, without introducing unnecessary friction into cross-border payment flows. These provisions demonstrate FATF’s commitment to striking a balance between financial security and operational efficiency.

Gaps That Still Need Closing

However, in our response to the consultation, we identified two significant areas that we believe warrant further attention. The first concerns the lack of a clear framework for non-punitive self-reporting of compliance breaches. In our work with clients, we often see payment service providers (PSPs) and institutions detect technical issues through internal audits or monitoring. These entities are typically willing to disclose and address such issues proactively. Yet, the absence of an explicit mechanism for voluntary self-reporting creates hesitation. Although there have been no reported enforcement cases under Regulation (EU) 2015/847 in the UK, the uncertainty around potential regulatory consequences can discourage transparency. We believe the FATF is well positioned to encourage jurisdictions to introduce safe-harbour models that promote early intervention and remedial action without defaulting to punitive responses.

The second issue we raised relates to the role of internal risk assessments in R.16 compliance. While the risk-based approach is appropriate in principle, there is limited guidance on how such assessments should be governed, validated, or externally reviewed. Given that these internal evaluations determine how much information is transmitted in a transaction, clearer expectations are needed to ensure consistency and accountability. FATF guidance could play a key role in reinforcing minimum governance standards for risk assessments without compromising their flexibility.

Practical & Technical Considerations

Beyond these structural concerns, we also commented on several technical and operational issues that continue to complicate compliance with wire transfer regulations. These include clarifying how to handle names in payment messages, especially in cases involving joint account holders, non-Roman scripts, or indirect beneficiaries, and ensuring that critical data isn’t lost due to legacy system limitations or character count restrictions. We also support the FATF’s intent to enhance transparency around cross-border ATM withdrawals, but we caution against imposing overly burdensome requirements on PSPs or ATM operators, especially when no illicit activity is detected.

The Need for RFI Standardisation

Another challenge we highlighted is the inefficiency of Request for Information (RFI) processes in cross-border investigations. Currently, inconsistent templates, timelines, and expectations across jurisdictions create delays and increase operational costs. A globally standardised FATF-backed RFI model, including clear guidance on required data fields and response times, would significantly improve international cooperation and reduce friction for institutions responding to regulatory and law enforcement requests.

Addressing Emerging Gaps in the Digital Ecosystem

We also urged the FATF to address a growing regulatory blind spot: the role of digital wallets and online marketplaces in value transfers. These platforms often provide services similar to those offered by regulated PSPs, yet they frequently fall outside the scope of national anti-money laundering regimes. As fiat and crypto ecosystems increasingly overlap, this regulatory gap creates opportunities for misuse. We believe the principle of “same activity, same risk, same rules” must be fully applied so ensuring all digital value transfer providers, regardless of the underlying asset type, fall under the scope of wire transfer regulations.

A Path to Smarter Implementation

Looking ahead, we support a phased implementation timeline of three to five years, in alignment with the ongoing ISO 20022 transition and the G20 Roadmap for Enhancing Cross-border Payments. This transition period will allow institutions and infrastructures to adapt effectively, especially with the support of dedicated FATF guidance and a proposed public-private implementation group.

Our Commitment to Shaping the Future

In summary, we support the revised direction of Recommendation 16 and commends the FATF for engaging constructively with industry stakeholders. The updated wire transfer regulations represent a strong step forward in enhancing transparency, harmonising global standards, and reinforcing trust in cross-border payments. However, implementation will be key and we believe that fostering a culture of openness, accountability, and shared responsibility will be critical to achieving the full potential of these reforms.

At OpusDatum, we remain committed to contributing to the practical evolution of financial crime compliance. We look forward to supporting institutions and regulators alike as the global community works to bring these vital changes to life.

Wire Transfer Compliance Starts Now, Not When the New Rules Arrive

If you're navigating the evolving landscape of wire transfer regulations and want to better understand what the revised FATF R.16 means for your organisation, we’re here to help.

To learn more about building a robust wire transfer regulations compliance framework download our in-depth white paper or explore WireCheck our compliance solution built to help financial institutions streamline wire transfer screening, meet regulatory expectations, and reduce friction in cross-border payments. Together, we can build a smarter, more secure future for global payments.