As noted on the website for the Financial Action Task Force (FATF) at https://www.fatf-gafi.org, the Financial Action Task Force (FATF) is the global money laundering and terrorist financing watchdog. The inter-governmental body sets international standards that aim to prevent these illegal activities and the harm they cause to society. As a policy-making body, the FATF works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

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Established in 1989 and based in Paris, the 40-member body sets international standards to ensure national authorities can effectively go after illicit funds linked to drugs trafficking, the illicit arms trade, cyber fraud and other serious crimes. In total, more than 200 countries and jurisdictions have committed to implement the FATF’s Standards as part of a co-ordinated global response to preventing organised crime, corruption and terrorism.

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The FATF leads global action to tackle money laundering, terrorist and proliferation financing, and they research how money is laundered and terrorism is funded, promote global standards to mitigate the risks and assess whether countries are taking effective action - as noted in the following four areas:

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Methods and Trends

FATF continuously monitors how criminals and terrorists raise, use and move funds.  As countries put in place effective measures to disrupt illicit financial flows, criminals must find alternative ways to launder their dirty money. FATF regularly publishes reports that raise awareness about the latest money laundering, terrorist financing and proliferation financing techniques so that countries and private sector can take the necessary steps to mitigate these risks.  

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Setting the Standards

The FATF Recommendations ensure a co-ordinated global response to prevent organised crime, corruption and terrorism. They help authorities go after the money of criminals dealing in illegal drugs, human trafficking and other crimes. The FATF also works to stop funding for weapons of mass destruction. The FATF continuously strengthens its global standards to address new risks, such as the regulation of virtual assets, which have spread as cryptocurrencies gain popularity.

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Assessing implementation

The FATF monitors countries to ensure they implement the FATF Standards fully and effectively.  In total, more than 200 countries and jurisdictions have committed to implement the FATF’s Standards and they are assessed with the help of nine FATF Associate Member organisations and other global partners, the IMF and World Bank.‍

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‍Identifying high-risk jurisdictions

The FATF holds countries to account that do not comply with the FATF Standards. If a country repeatedly fails to implement FATF Standards then it can be named a Jurisdiction under Increased Monitoring or a High Risk Jurisdiction. These are often externally referred to as “the grey and black lists”.

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