FINANCIAL ACTION TASK FORCE (FATF)
The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions. The objectives of the FATF are to set standards and promote 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. The FATF 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.
The FATF has developed a series of Recommendations that are recognised as the international standard for combating of money laundering and the financing of terrorism and proliferation of weapons of mass destruction. They form the basis for a co-ordinated response to these threats to the integrity of the financial system and help ensure a level playing field. First issued in 1990, the FATF Recommendations were revised in 1996, 2001, 2003 and most recently in 2012 to ensure that they remain up to date and relevant, and they are intended to be of universal application.
The FATF monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, and promotes the adoption and implementation of appropriate measures globally. In collaboration with other international stakeholders, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse.
The FATF's decision making body, the FATF Plenary, meets three times per year.
HISTORY OF FATF
In response to mounting concern over money laundering, the Financial Action Task Force on Money Laundering (FATF) was established by the G-7 Summit that was held in Paris in 1989. Recognising the threat posed to the banking system and to financial institutions, the G-7 Heads of State or Government and President of the European Commission convened the Task Force from the G-7 member States, the European Commission and eight other countries.
FUNCTIONS OF FATF
The Financial Action Task Force (FATF) was established in July 1989 by a Group of Seven (G-7) Summit in Paris, initially to examine and develop measures to combat money laundering.
In October 2001, the FATF expanded its mandate to incorporate efforts to combat terrorist financing, in addition to money laundering.
Since its inception, the FATF has operated under a fixed life-span, requiring a specific decision by its Ministers to continue. The current mandate of the FATF (2012-2020) was adopted at a Ministerial meeting in April 2012.
The objectives of the FATF are to set standards and promote 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. Starting with its own members, the FATF monitors countries' progress in implementing the FATF Recommendations; reviews money laundering and terrorist financing techniques and counter-measures; and, promotes the adoption and implementation of the FATF Recommendations globally.
FATF Members and Observers
The 37 Members of the FATF
The FATF currently comprises 35 member jurisdictions and 2 regional organisations, representing most major financial centres in all parts of the globe.
Argentina
Australia
Austria
Belgium
Brazil
Canada
China
Denmark
European Commission
Finland
France
Germany
Greece
Gulf Co-operation Council
Hong Kong, China
Iceland
Ireland
ItalyJapan
Republic of Korea
Luxembourg
Malaysia
Mexico
Netherlands, Kingdom of
New Zealand
Norway
Portugal
Russian Federation
Singapore
South Africa
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
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FATF Observers
FATF PresidentMr. Santiago Otamendi (2017-2018)
The FATF President is a senior official appointed by the FATF Plenary from among its members for a term of one year.
The term of the President begins on 1 July and ends on 30 June of the following year. The President convenes and chairs the meetings of the FATF Plenary and the Steering Group, and he/she oversees the FATF Secretariat.
Mr. Santiago Otamendi of Argentina assumed the position of President of the FATF on 1 July 2017. He succeeded Mr. Juan Manuel Vega-Serrano of Spain.
Mr. Otamendi is the Secretary of Justice at the National Ministry of Justice and Human Rights of the Republic of Argentina.
FATF Vice-PresidentMs Jennifer Fowler
The FATF Vice-President, who is also the FATF President-designate, is appointed by the Plenary from among its members for a term of one year preceding his/her presidential term. The Vice-President assists the President in carrying out his/her responsibilities and stands in for the President when necessary.
Ms Jennifer Fowler of the United States assumed the position of Vice-President of the FATF.
Ms. Fowler is the Deputy Assistant Secretary for Terrorist Financing and Financial Crimes at the U.S. Department of the Treasury. In this role, Ms Fowler is responsible for developing and implementing strategies to use financial sanctions and authorities to combat threats to U.S. national security, and for initiatives to safeguard the U.S. financial system from a range of illicit finance threats.
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FATF Secretariat
FATF Executive Secretary
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David Lewis joined the FATF as its Executive Secretary in November 2015, following posts for the UK Government as Head of the Illicit Finance Unit and Senior Policy Advisor on money laundering and terrorist financing at HM Treasury, and before that as a senior member of the Serious Organised Crime Agency (now National Crime Agency).
As Executive Secretary, Mr. Lewis is responsible for leading the FATF Secretariat, coordinating and delivering the work of the FATF on money laundering and countering the financing of terrorism and proliferation of weapons of mass destruction. This includes work to understand risks, trends and methods; to develop global policies, best practice and guidance; to oversee the programme of evaluations of FATF members; and to support the development of the global FATF network that today includes 198 jurisdictions.
Under the German Presidency of the G20 in 2017, Mr Lewis serves as the G20 Deputy for the FATF.
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FATF Recommendations
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 were intended to provide a comprehensive plan of action needed to fight against money laundering.
In 2001, the development of standards in the fight against terrorist financing was added to the mission of the FATF. 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 Recommendations, further strengthening the agreed international standards for combating money laundering and terrorist financing - the 40+9 Recommendations.
In February 2012, the FATF completed a thorough review of its standards and published the revised FATF Recommendations. This revision is intended to strengthen global safeguards and further protect the integrity of the financial system by providing governments with stronger tools to take action against financial crime. They have been expanded to deal with new threats such as the financing of proliferation of weapons of mass destruction, and to be clearer on transparency and tougher on corruption. The 9 Special Recommendations on terrorist financing have been fully integrated with the measures against money laundering. This has resulted in a stronger and clearer set of standards.
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