Financial Action Task Force (FATF) Definition
The Financial Action Task Force (FATF) is an intergovernmental organization established in 1989 by the G7 to develop and promote policies to combat money laundering. In 2001, its mandate expanded to include terrorism financing. The FATF monitors progress in implementing its recommendations through “peer reviews” (“mutual evaluations”) of member countries. It has been instrumental in shaping regulatory policies for cryptocurrencies and blockchain technology.
Financial Action Task Force (FATF) Key Points
- The FATF is an intergovernmental body that sets international standards to prevent illegal activities such as money laundering and terrorist financing.
- It was established in 1989 by the G7, a group of seven major advanced economies.
- The FATF’s mandate expanded in 2001 to include combating the financing of terrorism.
- The organization monitors the progress of its member countries in implementing its recommendations.
- The FATF has been influential in shaping regulatory policies for cryptocurrencies and blockchain technology.
What is the Financial Action Task Force (FATF)?
The FATF is an intergovernmental organization that develops and promotes policies to combat money laundering and terrorist financing. It was established by the G7 in 1989, in response to growing concerns about money laundering. The organization’s mandate was expanded in 2001 to include combating the financing of terrorism.
Why is the Financial Action Task Force (FATF) important?
The FATF is important because it sets the international standard for combating money laundering and terrorist financing. Its recommendations are recognized as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard. The FATF’s work helps protect the integrity of the global financial system.
Who does the Financial Action Task Force (FATF) impact?
The FATF impacts a wide range of entities, including governments, financial institutions, and businesses. Its recommendations are implemented by over 200 countries and jurisdictions. The FATF also impacts the cryptocurrency and blockchain industry, as it has issued guidance on how its recommendations should be applied to virtual assets and virtual asset service providers.
When does the Financial Action Task Force (FATF) intervene?
The FATF intervenes when it identifies jurisdictions with weak measures to combat money laundering and terrorist financing. It works with these jurisdictions to address their deficiencies, and if progress is not made, the FATF can apply counter-measures to protect the international financial system.
How does the Financial Action Task Force (FATF) operate?
The FATF operates by setting standards and promoting effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. It monitors countries’ progress in implementing the FATF Recommendations by conducting peer reviews known as “mutual evaluations”. The FATF also works closely with other international stakeholders, including the United Nations, the World Bank, and the International Monetary Fund.
