Financial Action Task Force (FATF)

Financial Action Task Force (FATF) Latest News

The ongoing Financial Action Task Force (FATF) meetings in Paris are expected to deliberate on state sponsorship as a means to fund and support terrorism, including the financing of banned outfits and their proxies operating in Pakistan.

About Financial Action Task Force 

• It is an independent intergovernmental body that develops and promotes policies to protect the global financial system against money laundering and terrorist financing.
• The FATF Recommendations are recognised as the global anti-money laundering (AML) and counter-terrorist financing (CFT) standard.
• Origin:
  • It was established in 1989 during the G7 Summit in Paris in response to a growing concern about money laundering.
  • In 2001, its mandate expanded to include terrorism financing.
  • Headquarters: Paris, France.
• Members:
  • FATF members include 39 countries, including the United States, India, China, Saudi Arabia, Britain, Germany, France, and the EU as such.
  • India became a member of FATF in 2010. 
  • In addition, more than 180 countries worldwide are affiliated with the FATF through a network of FATF-style regional bodies (FSRBs).
• The FATF researches how money is laundered and terrorism is funded, promotes global standards to mitigate the risks, and assesses whether countries are taking effective action.
• FATF regularly publishes reports that raise awareness about the latest money laundering, terrorist financing, and proliferation financing techniques.
• Once a member, a country or organization must endorse and support the most recent FATF recommendations and commit to being evaluated by (and evaluating) other members.
• The FATF holds countries to account that do not comply with the FATF Standards.
• If a country repeatedly fails to implement FATF Standards, then it can be placed under the grey and black lists.
• What are FATF ‘grey list’ and ‘blacklist’?
  • Black List: Countries known as Non-Cooperative Countries or Territories (NCCTs) are put on the blacklist. These countries support terror funding and money laundering activities. The FATF revises the blacklist regularly, adding or deleting entries.
  • Grey List: Countries that are considered a safe haven for supporting terror funding and money laundering are put on the FATF grey list. This inclusion serves as a warning to the country that it may enter the blacklist.
  • Three countries-North Korea, Iran, and Myanmar, are currently on FATF’s blacklist.
• Consequences of being on the FATF blacklist:
  • No financial aid is given to them by the International Monetary Fund (IMF), the World Bank, the Asian Development Bank (ADB), and the European Union (EU).
  • They also face a number of international economic and financial restrictions and sanctions.

Source: TH

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