Have you been looking for an article on how to combat money laundering? As you read this small post with the following: “What is Financial Action Task Force (FATF)?. A Brief Explanation of the 40+9 FAFT recommendations. How FATF combats money laundering. The NCCT. The Meaning of FAFT. Believe me when I say that your quest is over.
An Inkling Of FATF
The Financial Action Task Force (FATF) is an intergovernmental organization based in Paris. The Purpose of establishing FATF is to promote the effective implementation of laws, regulations, and other measures to combat money laundering (ML), terrorist financing (FT), and other threats to financial integrity. A series of Recommendations that create international standards for fighting ML and FT is one of FATF’s primary outcomes.
Benefactors used these recommendations to assist developing nations in improving their financial integrity and stability, as well as preventing risks associated with ML and FT in their own operations.
The Meaning Of FATF
The Financial Action Task Force (FATF) is a multinational company that establishes quality requirements to counter money laundering activities (AML/CFT). In French, they call it “Group d’action financière” (GAFI). The G7 established the FATF in 1989. It had 16 members when it was founded, but by 2021, it had grown to 39. Having followed the 9/11 terrorist intimidation, the FATF’s mission was broadened to encompass terrorist funding in 2001.
The objective of the force is to study racketeering patterns, watch parliamentary, economic, and enforcement agencies’ operations on a state and federal level, evaluate conformity and issue suggestions and standards to prevent and detect the laundering of money.
Brief Explanation of the 40 +9 FAFT recommendation
The FATF’s Forty Recommendations on Money Laundering and Nine Special Recommendations on Terrorist Financing establish a global standard for anti-money laundering and anti-terrorist financing on an individual level, allowing each citizen to enforce them in accordance with their own situations and regulatory process.
The initial FATF Forty Recommendations were drafted in 1990 as part of a campaign to prevent narcotics money laundering through financial institutions. For the first time in 1996, the recommendations were updated to reflect changing money laundering typologies. More than 130 countries have approved the 1996 Forty Recommendations, which represent the international anti-money laundering standard.
Furthermore to the constitutionally non-binding 40+9 Recommendations, FATF began publishing its FATF Black List in 2010, formally known as the Non-Cooperative Countries or Territories List (NCCT). The list contains countries that have refused to cooperate with international efforts to combat money laundering and terrorist financing.
This involves a refusal to produce bank or brokerage account data, client identity, and beneficial ownership details for these accounts, shell corporations, and other financial institutions typically used to transfer funds.
FATF amended its Standards in June 2019 with the guideline “A Risk-based Approach to Virtual Assets and Virtual Asset Service Providers (VASPs),” which contains the “FATF Travel Rule,” which requires trades to transmit conforming user data with one another. The FATF will meet again in late June 2021 to review its digital asset proposals.