Financial Action Task Force

The Financial Action Task Force (FATF) is an intergovernmental body established in 1989 to protect the global financial system from illicit finance. It sets international standards for combating money laundering, terrorist financing and the financing of proliferation, collectively addressed through AML/CFT/CPF measures.

Core mandate

FATF develops and promotes the 40 Recommendations, which provide a common framework for national laws, institutions and enforcement systems. Its mandate combines standard-setting, assessment and international policy coordination.

• Countries are expected to identify risks and apply a risk-based approach, directing stronger safeguards towards higher-risk activities.
• The standards require criminalisation of money laundering and terrorist financing, confiscation of criminal proceeds, preventive duties for financial institutions and designated non-financial businesses, and effective financial intelligence units.
• They also cover beneficial ownership transparency, targeted financial sanctions and international cooperation through mechanisms such as mutual legal assistance and extradition.

Assessment and implementation

FATF and FATF-style regional bodies conduct mutual evaluations to examine both technical compliance with the Recommendations and the effectiveness of national AML/CFT systems.

• Evaluated jurisdictions undergo follow-up processes and must address identified weaknesses.
• FATF issues guidance and studies emerging methods and vulnerabilities to support consistent implementation of its standards.
• The Recommendations are not a treaty, but members make a political commitment to implement them and undergo peer review.

Jurisdictions with strategic deficiencies

FATF publicly identifies jurisdictions with serious strategic deficiencies to encourage corrective action and protect the international financial system.

• Jurisdictions under increased monitoring work with FATF on time-bound action plans and are commonly described as being on the grey list.
• For high-risk jurisdictions subject to a call for action, FATF calls for enhanced due diligence and, in the most serious cases, countermeasures.
• Listing concerns weaknesses in the national AML/CFT framework; it is not itself an adjudication of individual criminal liability.