The Financial Action Task Force (on Money Laundering) (FATF)
- An intergovernmental organization
- Founded in 1989 on the initiative of the G7 & European Commission
- to develop policies to combat money laundering. In 2001 its mandate expanded to include terror financing.
- It monitors progress in implementing the FATF Recommendations through "peer reviews" ("mutual evaluations") of member countries.
- FATF also works to stop funding for weapons of mass destruction.
- The FATF is not a part of the UN system, but it functions out of the OECD HQ in Paris
- It depends on voluntary implementation of its reports by member countries.
- 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.
- FATF is a “policy-making body” that works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.
- Decisions are made by the grouping of 39 member states on a consensus basis
- Any three members can exercise a “veto” on an action
India is full-time member of FATF
FATF Plenary is the decision making body of the FATF. It meets three times per year.
The OECD has maintained a 'blacklist' of countries it considers "uncooperative tax havens" in the drive for transparency of tax affairs and the effective exchange of information.This blacklist is issued by FATF.
At present, 16 countries are on Grey list of the FATF, (high risk and non-cooperative jurisdiction) --> Pak removed from Grey list
Iran and North Korea are on the blacklist. Blacklisted countries are known as Call of Action countries
Gulf Cooperation Council (GCC) is a full Member of the FATF, the individual Member countries of the GCC (of Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates) are not.
Saudi Arabia has become 1st Arab country to be granted full membership of FATF
All P-5 countries are full-time members of FATF
Pakistan is NOT a full time member. (it is an associate member)
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