Financial Action Task Force (on Money Laundering) (FATF)

The Financial Action Task Force (on Money Laundering) (FATF), is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering. In 2001 its mandate expanded to include terrorism financing.

It monitors progress in implementing the FATF Recommendations through “peer reviews” (“mutual evaluations”) of member countries.

Historical background

FATF was formed by the 1989 G7 Summit in Paris to combat the growing problem of money laundering. The task force was charged with studying money laundering trends, monitoring legislative, financial and law enforcement activities taken at the national and international level, reporting on compliance, and issuing recommendations and standards to combat money laundering.

FATF Secretariat

The FATF Secretariat is housed at the OECD headquarters in Paris.

Members of FATF

As of 2018 FATF consists of thirty-six member countries including India and two regional organisations, the European Commission and the Gulf Co-operation Council.

Effects of FATF

The Financial Action Task Force began to become a big figure shortly after the detrimental 9/11 attacks to help combat the financing of terrorist organizations. This Task Force make sure funds aren’t easily accessible to terror organizations that are causing these heinous crimes against humanity.

FATF has helped to fight against corruption by ‘grey-listing’ countries that do not meet Recommended Criteria and this helps to cripple economies and states that are aiding with terrorist and corrupted organizations. FATF continues to work with other monetary agencies to control terrorist finance activity and to bring an end to illegal financial organizations, terrorism and corruption.

FATF has made it difficult for NGOs in countries to access funds to aid in relief situations due to strict FATF criteria. The FATF criteria have mainly impacted NGOS that are located in Middle Eastern and terror-ridden countries. Some argue that the Recommendations set out by FATF does not specifically state out restrictions for NGO’s which often results in them going against FATF Recommendation.