Financial Action Task Force (FATF)

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News: The Financial Action Task Force (FATF) week commenced on October 20, 2025. The meetings are being attended by representatives from more than 200 jurisdictions, along with various observers.

About Financial Action Task Force (FATF)

Source: Tehran times
AboutThe FATF is the global watchdog for money laundering and terror financing.
EstablishmentIt was formed in 1989 during the G7 Summit in Paris as an inter-governmental body.
MandateTo set global standards and promotes effective implementation of legal, regulatory, and operational measures to combat: Money laundering, Terrorist financing, Proliferation financing and other threats to the integrity of the international financial system. 
Membership
  • It has 39 members (Russia membership was suspended in 2023) including U.S.A, India, China, Saudi Arabia, the UK, Germany, France, and the EU.
  • India became a member in 2010.
  • Over 180 countries are connected through FATF-style regional bodies (FSRBs).
HeadquartersParis, France
Functions
  • Monitoring & Informing: Tracks how criminals and terrorists raise, use, and move funds and raises awareness on emerging money laundering, terrorist financing, and proliferation financing techniques.
  • Setting Standards: Issues global recommendations to coordinate action against organised crime, corruption, and terrorism and encourages countries to adopt best practices for preventing illicit financial activities.
  • Assessing Compliance: Evaluates whether member countries are taking effective legal and operational measures.
Non-Compliance Measures
  • Members must endorse FATF recommendations and undergo mutual evaluations.
  • Non-compliant countries may be placed on the Grey List (increased monitoring) or the Black List (high-risk jurisdictions).
  • FATF member countries and other international organizations are likely to impose economic sanctions and various restrictive measures on nations placed on the blacklist.

About FATF’s Black and Grey List

  • Black List: The FATF blacklist identifies nations with severely deficient anti-money laundering (AML) and counter-terrorist financing (CFT) frameworks.
    • These jurisdictions are considered non-cooperative in the global effort to combat money laundering and terrorism financing.
    • As a result, FATF member states and international bodies may impose economic sanctions and other restrictive measures against them.
  • Grey List: The FATF grey list, officially termed “Jurisdictions under Increased Monitoring,” includes countries that have strategic weaknesses in their AML/CFT systems but have formally committed to addressing them through agreed action plans.
    • Grey-listing indicates a higher risk of money laundering and terrorist financing and can serve as a warning or precursor to potential sanctions.
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