The FATF has developed so-called recommendations to combat money laundering and terrorist financing. In this article, we discuss the FATF and the FATF alert lists in more detail.
What is the FATF?
The Financial Action Task Force (FATF) is an independent intergovernmental body. This body develops and promotes policies to protect the global financial system against money laundering, terrorist financing and the financing of weapons of mass destruction.
Financial institutions are expected to follow the regular review of FATF documents and recommendations, and to comply with anti-money laundering/anti-terrorist financing measures to be adopted.
FATF warning lists
A plenary FATF meeting is held three times a year (in February, June and October). After each meeting, the FATF alert lists are presented highlighting countries with deficiencies in their anti-money laundering and counter-terrorist financing systems.
Three alert lists are available:
- Countries with serious deficiencies: This lists countries that have serious deficiencies in their anti-money laundering/anti-terrorist financing system that may pose a risk to the international financial system.
- Countries that have not shown sufficient improvement: This lists the countries that have not shown sufficient improvement or have not committed to an action plan.
- Countries that have serious deficiencies in their anti-money laundering/anti-terrorist financing system but are committed to addressing these deficiencies.
FATF recommendations
The FATF has developed so-called recommendations. These recommendations are internationally recognised as the prevailing standard for combating money laundering and terrorist financing. Among other things, these recommendations led to the amendment of the European Anti-Money Laundering Directive (4AML) and the resulting Wwft in 2018. When preparing an assessment of your money laundering and terrorist financing risks, you should also consider the risks identified and published by the FATF.
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