FinCrime3 FATF

What is the history behind the FATF Nine Special Recommendations and what at a high level are they?

In October 2001 the FATF issued the Eight Special Recommendations to deal with the issue of terrorist financing. The continued evolution of money laundering techniques led the FATF to revise the FATF standards comprehensively in June 2003. In October 2004 the FATF published a Ninth Special Recommendation, further strengthening the agreed international standards for combating money laundering and terrorist financing—the 40+9 Recommendations. The 9 Special Recommendations against terrorist financing cover a range of measures, which jurisdictions need to implement to effectively fight terrorist financing.

Give a rough history of FATF

Responding to concerns over increased money laundering activity, a Financial Action Task Force on Money Laundering (FATF) was established by the G-7 Summit, held in Paris in 1989. Identifying the increased threat posed to the banking system and to financial institutions, the seconded G-7 Heads of State, Government and President of the European Commission convened its newly formed Task Force from the G-7 member States, the European Commission and eight neighbouring countries. During 1991 and 1992, the FATF expanded its membership from the original 16 to 28 members. In 2000 the FATF expanded to 31 members, and has since expanded to its current 36 members.

What has FATF done since its creation?

Since its creation the FATF has spearheaded the effort to adopt and implement measures designed to counter the use of the financial system by criminals. It established a series of Recommendations in 1990, revised in 1996 and 2003 to ensure that they remain up to date and relevant to the evolving threat of money laundering that set out the basic framework for anti-money laundering efforts and are intended to be of universal application. The FATF monitors members' progress in implementing necessary measures, reviews money laundering and terrorist financing technique sand counter-measures, and promotes the adoption and implementation of appropriate measures globally. In performing these activities, the FATF collaborates with other international bodies involved in combating money laundering and the financing of terrorism. In 2001, the development of standards in the fight against terrorist financing was added to the mission of the FATF.

What specifically are the FATF 9 Special Recommendations

The 9 FATF Recommendations require jurisdictions to: 1) Take immediate steps to ratify and implement the relevant United Nations instruments. 2) Criminalise the financing of terrorism, terrorist acts and terrorist organisations 3) Freeze and confiscate terrorist assets. 4) Report suspicious transactions linked to terrorism. 5) Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations. 6) Impose anti-money laundering requirements on alternative remittance systems. 7) Strengthen customer identification measures in international and domestic wire transfers. 8) Ensure that entities, in particular non-profit organisations, cannot be misused to finance terrorism. 9) Have systems in place to detect and prevent illicit cross-border transportations of cash and bearer negotiable instruments.

What is FATF and what is its purpose? What type of body is it?

The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering and terrorist financing. The Task Force is therefore a "policy-making body" which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

What responsibilities were FATF given at the start and what did they do?

The Task Force was given the responsibility of examining money laundering techniques and trends, reviewing the action which had already been taken at a national or international level, and setting out the measures that still needed to be taken to combat money laundering. In April 1990, less than one year after its creation, the FATF issued a report containing a set of forty recommendations, which provide a comprehensive plan of action needed to fight against money laundering.

What is the priority of the FATF and how does it action this?

The priority of the FATF is to ensure global action to combat money laundering and terrorist financing, and concrete implementation of its 40+9 Recommendations throughout the world. Starting with its own members, the FATF 1. monitors countries' progress in implementing AML/CFT measures; 2. reviews money laundering and terrorist financing techniques and counter-measures and 3. promotes the adoption and implementation of the 40+9 Recommendations globally.