Financial Action Task Force (FATF)
Financial Action Task Force (FATF) is the international monitor on terrorism financing and money laundering. It establishes global norms with the goal of stopping these illegal activities and the harm they do to society.
The FATF Recommendations offer a thorough framework of policies to assist nations in addressing illicit financial flows. In order to enable national authorities to take effective action in identifying and disrupting financial flows that support crime and terrorism and penalizing individuals accountable for illicit behavior, they have put in place a strong framework of laws, regulations, and operational guidelines.
The 40 recommendations are broken down into 7 main categories:
- AML/CFT Policies and coordination
- Money laundering and confiscation
- Terrorist financing and financing of proliferation
- Preventive measures
- Transparency and beneficial ownership of legal persons and arrangements
- Powers and responsibilities of competent authorities and other institutional measures
- International cooperation
In two FATF public documents released three times a year, the FATF lists countries with weak efforts to prevent money laundering and terrorism financing (AML/CFT).The method used by the FATF to list nations with weak AML/CFT laws has shown to be successful. The FATF has examined 131 nations and regions as of February 2024, and 106 of them have been made public. Of these, 82 have since been eliminated from the process after implementing the required changes to resolve their AML/CFT flaws.
High-Risk Jurisdictions that are on the "black list" or under call for action
This declaration (formerly known as the “Public Statement”) lists the nations or regions that have significant strategic shortcomings in their efforts to combat money laundering, financing of terrorism, and funding of proliferation. The FATF requests that all members and jurisdictions apply enhanced due diligence to all countries that have been designated as high-risk. In the most extreme circumstances, countries are also asked to implement countermeasures to safeguard the international financial system against the ongoing risks of money laundering, terrorist financing, and proliferation financing that come from their borders.
This list is often externally referred to as the black list.
- Democratic People’s Republic of Korea
- Iran
- Myanmar
Increased Monitoring Jurisdictions (also known as the "grey list")
The nations listed in this statement are those that actively collaborate with the Financial Action Task Force (FATF) to solve strategic inadequacies in their counter-money laundering, counterterrorism, and counterproliferation finance regimes. When a nation is placed under enhanced monitoring by the FATF, it signifies that it has promised to promptly address any strategic flaws found within the designated timeframes and is under closer scrutiny.
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