Financial Action Task Force
The FATF (Financial Action Task Force) is the intergovernmental body that sets global standards for combating money laundering and terrorist financing. Its 40 Recommendations form the reference framework adopted by over 200 jurisdictions worldwide.
Established in 1989 at the G7 summit in Paris, the FATF comprises 39 members (37 countries and 2 regional organisations) and works in coordination with a global network of FATF-Style Regional Bodies (FSRBs). Its primary mandate is to develop international standards, promote their effective implementation, and assess member countries' compliance through mutual evaluations.
The FATF's 40 Recommendations cover the entire anti-money laundering framework: preventive measures applicable to the financial sector and designated non-financial businesses, transparency of legal persons and arrangements, powers and responsibilities of competent authorities, and international cooperation. The FATF also publishes lists of jurisdictions with strategic deficiencies in their AML/CFT frameworks (grey and black lists).
FATF mutual evaluations serve as a powerful lever for the global harmonisation of compliance standards. A country placed on the FATF grey list faces enhanced scrutiny from global financial institutions, which can significantly impact its economy. Document verification solutions like CheckFile.ai operate within this ecosystem by facilitating compliance with FATF standards for identity verification.
Regulations
Real-world examples
- 1.The FATF places a country on its grey list after identifying significant deficiencies in its anti-money laundering framework, triggering enhanced due diligence by international banks.
- 2.A bank refuses to open a correspondent account with an institution located in a jurisdiction on the FATF black list.
- 3.A national regulator updates its KYC guidelines to comply with the latest FATF recommendations ahead of its country's mutual evaluation.