FATF

The Financial Action Task Force (FATF) is an intergovernmental organization established in 1989 by the G7 to set standards and promote measures to combat money laundering, terrorist financing, and the financing of proliferation. It is headquartered in Paris, France, and operates through a plenary comprising member jurisdictions and observer organizations. The FATF’s work is guided by consensus and voluntary implementation by its members.

Its central instrument is the FATF Recommendations, a comprehensive framework of legal, regulatory, and supervisory measures that member states are expected to implement through national AML/CFT regimes. The FATF also issues guidance and typology reports on emerging risks and promotes risk-based approaches, customer due diligence, beneficial ownership transparency, and the regulation of high-risk sectors, including virtual assets. In addition to standards, the FATF conducts mutual evaluations of members and certain non-member jurisdictions to assess compliance, publishes reports, and maintains a public record of jurisdictions that pose strategic AML/CFT deficiencies.

Membership includes a broad group of sovereign states and regional organizations, and it operates with several FATF-style regional bodies to extend reach and coordination. The FATF also collaborates with international bodies such as the Egmont Group of Financial Intelligence Units and aligns its standards with broader international law, trade, and financial integrity frameworks.

Impact and reception: The FATF’s standards influence national legislation and financial supervision worldwide. Jurisdictions that fail to demonstrate adequate controls may face increased monitoring, public notices, and countermeasures by other members. The organization periodically updates its standards to address new risks, including those from proliferation financing and evolving technologies.