What is the FATF and why you need to know how it controls money

The Financial Action Task Force (FATF) – in Italian FATF International Financial Action Group – is the organization that makes global recommendations on the fight against money laundering and the use of money by organized crime and terrorists.
A Brief History of the FATF Money laundering has always been a problem to combat, but with the increase in international trade after World War II the issue has gotten worse.
In response, countries like the United States have developed national laws like the Bank Secrets Act to try to curb it.
It then became necessary to start international cooperation.
To this end, the G7 met in Paris in 1989 to establish the Financial Action Task Force, or FATF.
The founders envisioned the FATF as a body that would keep tabs on how money was laundered, as well as government measures to counter it, reporting on compliance and drafting anti-money laundering standards.
Over time, the FATF has grown from 16 to 40 members.
Standards were issued, then revised when the organisation's mandate was expanded to also cover the topic of terrorist financing following the attacks of 11 September 2001 in the United States.
FATF Blacklist and Gray List The FATF has a list of 40 recommendations for countries, ranging from providing information to law enforcement, identifying AML (Anti Money Laundering) and KYC (Know Your Customer) to, above all, to the details on the beneficial owners.
There are nine others that concern terrorism.
While these recommendations don't usually make news, there are two lists, one black and one grey, that may be relevant.
The blacklist is “High Risk” jurisdictions that are essentially non-cooperative with the FATF, such as North Korea.
The gray list of “Jurisdictions under increased monitoring” includes countries that have inadequate controls.
All transactions with counterparties are subject to additional scrutiny.
The countries on the Black List are largely outside the global financial system.
Gray List nations, however, are within it and are often assumed to work together (over the years) to be removed from it.
Complaints about the FATF The FATF operates on the basis of consensus and, as such, any country that votes against the measure in question can scupper a proposal.
This weakness has been exploited in the past, as former FATF head Dvid Lewis has publicly stated.
Other complaints include the slow pace due to bureaucracy and therefore the inability to keep up with the pace of technology.
FATF on Russia's war on Ukraine One area in which the FATF has moved with some speed is that of the Russian invasion of Ukraine.
The situation is unusual as the organization insists that the Russian Federation is still responsible for its obligation to implement the FATF standards.
However, his membership was suspended.
Article published on Money.it international edition on 2024-03-12 03:59:33.
Original title: FATF – you need to know this about money