What is Financial Action Task Force (FATF)?

FATF, also known as GAFI (Group d’action financière), is an international organization that establishes international principles to fight money laundering and terrorist financing. It was created in 1989 by G-7. In the beginning, it had only 16 members, but as of 2022, it has 39. Following the 9/11 terrorist attacks, the FATF's mandate was expanded to incorporate terrorist financing in 2001.

The task of this organization is to learn about money laundering trends, monitor legislative, financial, and law enforcement activities on a national and international level, report on compliance, and issue suggestions and standards to combat money laundering.

The global standard for anti-money laundering and anti-terrorist financing is set by the Forty Recommendations on Money Laundering and Nine Special Recommendations on Terror Financing of the FATF. Each member state is allowed to interpret these recommendations based on its own circumstances and the framework of its Constitution.

In 2010, FATF began publishing its Black List, formally known as the Non-Cooperative Countries or Territories List (NCCT), in addition to the legally non-binding 40+9 Recommendations. The list shows countries that have refused to cooperate with international efforts to combat money laundering and terrorist financing.

This includes a refusal to disclose bank or brokerage account data and ownership information of these accounts, as well as client identity, shell corporations, and other financial institutions typically used to launder money.