Criminals have gotten next-level dangerous with the rise in technology, both digital and physical. Threats like money laundering require high priority in scaling defense with the advanced attempts to hide and then use dirty funds. That’s why the FATF was created.
The Financial Action Task Force, or FATF, is an organization that works globally to establish and enforce standards to be used internationally to fight against money laundering and terrorist financing. But what exactly is this unified, intergovernmental organization, and why haven’t more people heard of it?
The Origin of FATF
It didn’t take long for the world’s governments to realize that money laundering was an international problem. This issue can only be combated by everyone working together, regardless of their differences.
To ensure this happened neutrally, the FATF was established. This organization specifically sets standards that are enforced in over 180 jurisdictions around the world. These standards are used to implement guidelines on how countries implement measures to prevent money laundering and financing to terrorist sects.
The FATF has systems in place to assess and monitor these jurisdictions for compliance with their standards. Different departments are designed to study money laundering and terrorist financing to stay ahead of their methods and respond to threats as they emerge.
As these threats are observed and analyzed, guidelines like the FATF travel rule are implemented. Financial crime is an ever-evolving issue, and the methods used to fight it must always be in flex, too.
How Countries are Working Together to Fight Financial Crime
Under FATF regulations, countries are required to take action to prevent money laundering and terrorist financing, and to prosecute those who are guilty of these crimes.
- All jurisdictions must investigate and prosecute any leads of money laundering or terrorist financing.
- These activities must be criminalized, with law enforcement officials and those in the court system trained in persecuting those guilty.
- Criminals must lose access to their proceeds and any funds that are used for illegal activities, and to do this, governments must be given the authority to seize and confiscate all criminal assets.
- Financial institutions must be trained in and required to recognize and report any suspicious transactions or activities. Due diligence of investigating customers is required, and copious record-keeping to identify individuals performing transactions is essential.
- These financial institutions also must be monitored to ensure they are in compliance with all AML and CFL efforts, both international and domestic.
The FATF is structured to block criminal financial use, but it’s also created to be protective to law-abiding citizens. In addition to enforcing anti-money laundering and criminal financing, the FATF policies are designed to ensure those acting legally are defended from becoming victims of these crimes.
Keep Yourself Safe from Financial Crime
With global organizations like the FATF in place, financial crime has been reduced, but it’s still a daily threat. You have to perform your due diligence, as well, to diminish the chances that you’ll be a victim to these criminals. But if you find yourself in this spot, you’re not alone. The FATF and other laws are in place to help you get the justice you deserve and ensure those guilty are found and held accountable.