Financial Action Task Force (FATF)

What Is the Financial Action Task Force (FATF)?

The Financial Action Task Force (FATF), also known as the Group d’action financi√®re (GAFI), is a global organization established in 1989 by the G7 to combat money laundering and terrorist financing (AML/CFT).

In response to the 9/11 terrorist attacks, the FATF’s mandate was expanded in 2001 to include addressing terrorist financing.

Safeguarding Global Finances

The FATF plays a crucial role in combating illicit financial activities by monitoring money laundering trends, analyzing legislative and law enforcement activities at national and international levels.

It also issues recommendations and standards to counter money laundering and terrorist financing.

It focuses on promoting compliance and sharing best practices across jurisdictions.

Global Framework Against Illicit Finance

The Forty Recommendations on Money Laundering and Nine Special Recommendations on Terrorist Financing established by the FATF serve as global standards for AML/CFT.

These recommendations provide a framework that allows member states to implement measures tailored to their specific circumstances and constitutional frameworks.

Enforcing Global Accountability

In addition to these recommendations, the FATF began publishing its FATF Black List, officially known as the list of Non-Cooperative Countries or Territories (NCCT), in 2010.

This list includes jurisdictions that have shown non-cooperation in international efforts to combat money laundering and terrorist financing.

Such non-cooperation may manifest as a refusal to provide bank or brokerage account records, customer identification, or beneficial ownership information associated with these accounts, as well as a lack of cooperation in addressing shell companies and other financial entities commonly used for money laundering.