FATF
Financial Action Task Force
FATF — an intergovernmental organization that sets global standards for combating money laundering and terrorist financing.
- What it is
- The FATF — an intergovernmental body against money laundering
- What it does
- Sets the global standards for combating money laundering and terrorist financing
- Impact
- Countries around the world implement its recommendations
- Lists
- Keeps “grey” and “black” lists of high-risk jurisdictions
- How to use it
- Understand why the checks are so strict
In plain words
The FATF (Financial Action Task Force) is an intergovernmental organisation that sets the global standards for combating money laundering (AML) and terrorist financing. In essence the FATF is the “trendsetter” of global compliance: it develops recommendations that states follow, and through them banks, citizenship programmes and other financial institutions around the world.
It is requirements rooted in the FATF standards that explain why checks are so strict today: disclosure of beneficial ownership, checking the source of funds, due diligence, sanctions screening — all of these are parts of the risk-based approach promoted by the FATF. The organisation also assesses countries’ compliance with the standards and keeps lists of jurisdictions with deficiencies: the “grey” list (increased monitoring) and the “black” list (high risk).
For the client the FATF is the background that explains the logic of the whole industry: strict checks are not a whim of a particular bank but a consequence of global rules. Understanding this helps treat compliance as the norm and prepare properly — with a transparent file and honest disclosure. We work in line with these standards, helping clients pass checks rather than fight them.
Where the FATF’s influence shows
What matters about the FATF
- An intergovernmental body
- AML standards
- Global influence
- Recommendations to countries
- The risk-based approach
- Compliance rules
- The “grey” list
- The “black” list
- Assessing jurisdictions
- Explains the strictness
- Compliance is the norm
- Prepare transparently
How it affects the process
- 01The FATF sets the standards
- 02Countries implement the rules
- 03Banks and programmes check
- 04The client’s transparent file
- 05Passing successfully
What you need to know
- The FATF sets the global standards against money laundering
- Countries around the world implement its recommendations
- Hence the strict checks and disclosure in compliance
- Keeps “grey” and “black” lists of high-risk jurisdictions
- Understanding the FATF explains the logic of the whole industry
Common mistakes
- Treating strict checks as a particular bank’s whim
- Underestimating the global nature of the standards
- Ignoring the requirements on disclosure and source of funds
- Not taking a jurisdiction’s status on the FATF lists into account
- Trying to “get round” compliance instead of preparing
What this means for a BRIDGES client
We work in line with the FATF’s global standards and help clients pass checks rather than fight them. We explain the logic of strict compliance and prepare a transparent file with honest disclosure and evidence of funds. That way requirements that frighten many become, for you, a clear and passable norm.
Frequently asked questions
01 /What is the FATF?
The Financial Action Task Force — an intergovernmental organisation that sets the global standards for combating money laundering and terrorist financing.
02 /Why does the FATF affect me?
Countries implement its recommendations, and through them banks and programmes. That is why checks are so strict: disclosure of the beneficial owner, source of funds, due diligence.
03 /What are the “grey” and “black” lists?
The FATF assesses countries’ compliance with its standards. The “grey” list is increased monitoring of jurisdictions with deficiencies; the “black” list, high-risk jurisdictions.
04 /Does the FATF impose sanctions?
No, it is not a sanctions body. It sets standards and assesses countries. Sanctions are imposed by states and bodies such as OFAC; the FATF shapes the compliance rules.
05 /How does understanding the FATF help a client?
It explains that strict checks are a global norm, not a bank’s whim. With this understanding it is easier to prepare properly: transparently and with honest disclosure.
06 /Does a country’s status affect the check?
Yes. A connection with a jurisdiction on the “grey” or “black” list increases compliance’s attention. This is taken into account when preparing the file — we help do so.
See also
Read next
This material has undergone editorial review by BRIDGES.
Strict compliance ahead?
We will prepare a transparent file to global standards — so that you pass strict checks as the norm, not a barrier.