Financial Action Task Force (FATF)

The Financial Action Task Force is an organization that prevents the global crime of money laundering and terrorist financing. This institution, agreed by the governments, sets rules to prevent illegal activities and the damage they cause. Also, they make legal regulations in these areas.

What Does FATF Do?

It is an intergovernmental organization that was established in 1989 by the G7 countries. Its primary objective is to combat money laundering and terrorist financing by developing and promoting global policies and standards. The FATF sets international standards and best practices for anti-money laundering (AML) and counter-terrorist financing (CTF) policies and regulations.

Since its inception, the FATF has expanded its mandate to include new and emerging threats to the global financial system. In 2001, the organization added the financing of terrorism to its agenda, recognizing that terrorist organizations also require funding to carry out their activities. In 2012, the FATF began working to prevent the proliferation of weapons of mass destruction, recognizing that the financing of such weapons can have devastating consequences.

One of the key roles of the FATF is to assess whether countries are implementing the necessary measures to combat money laundering and terrorist financing. The FATF conducts mutual evaluations of countries’ AML/CFT regimes, which involve assessing whether the country’s laws, regulations, and procedures meet international standards. The organization also provides guidance to countries on how to strengthen their AML/CFT regimes, and it works with countries to address deficiencies identified in mutual evaluations.

The FATF has 39 member countries, including the United States, Canada, the United Kingdom, France, Germany, and Japan. In addition to its member countries, the FATF also works with a number of international organizations, including the United Nations, the World Bank, and the International Monetary Fund. The FATF’s recommendations and guidelines are widely recognized and are used by countries and financial institutions around the world to develop and implement AML/CFT policies and procedures.