Financial Action Task Force

Financial Action Task Force (FATF), also known as Groupe d'action financière (GAFI) in French, is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering and maintain the integrity of the international financial system.
== History ==
The FATF was established in 1989 at the G7 Summit in Paris in response to growing concerns about money laundering. Initially comprising 16 members, the organization has since expanded to include 39 members as of 2023.
In its first year, the FATF issued a report containing forty recommendations to more effectively combat money laundering. These standards were revised in 2003 to reflect evolving patterns and techniques in money laundering. Following the September 11, 2001 terror attacks, the FATF's mandate was expanded to include terrorist financing.
== Functions and Responsibilities ==
The FATF's primary functions include:
# Setting international standards for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system.
# Monitoring progress in implementing the FATF Recommendations through "peer reviews" or "mutual evaluations" of member countries.
# Identifying national-level vulnerabilities to protect the international financial system from misuse.
# Promoting effective implementation of legal, regulatory, and operational measures for combating financial crimes.
== FATF Recommendations ==
The FATF Recommendations, first issued in 1990 and subsequently revised, provide a comprehensive framework for countries to combat money laundering and terrorist financing. The recommendations cover areas such as:
* Assessing risks and applying a risk-based approach
* National cooperation and coordination
* Money laundering and confiscation
* Terrorist financing and financing of proliferation
* Preventive measures for the financial sector
* Transparency and beneficial ownership of legal persons and arrangements
* Powers and responsibilities of competent authorities
* International cooperation
== Membership and Structure ==
As of 2024, the FATF comprises 40 members, including major financial centers and international organizations such as the United Nations and the World Bank. To become a member, a country must be considered strategically important, adhere to globally accepted financial standards, and participate in other important international organizations.
The FATF Secretariat is administratively hosted at the Organisation for Economic Co-operation and Development (OECD) in Paris, although the two organizations remain separate entities. Violaine Clerc serves as the FATF executive secretary.
== Impact and Challenges ==
The FATF plays a crucial role in shaping global anti-money laundering (AML) and counter-terrorist financing (CFT) policies. However, the organization faces several challenges, including:
# Varying definitions and implementations of FATF standards across jurisdictions
# Balancing risk management with customer privacy concerns
# Keeping pace with evolving financial crime techniques and technologies
# Ensuring effective implementation of recommendations in diverse economic and political contexts
== References ==
Category:Regulation
Category:Anti-Money Laundering
Category:Compliance
Category:Financial Crime
Category:International Organizations