Updated
GL-F-03
Glossary · Due Diligence and compliance
FATF - the body that makes banks worldwide check equally strictly
FATF — an intergovernmental organization that sets global standards for combating money laundering and terrorist financing.
01 / In 30 seconds
The short answer
- 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
02 / In plain words
What FATF means
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.
A case from practice
A client is irritated by the bank’s “excessive” questions about the origin of their money. We explain: it is not nit-picking but a consequence of the FATF standards that the whole world follows. With a properly prepared transparent file, these same questions stop being an obstacle — and the check goes through calmly.
Where the FATF’s influence shows
- AML and compliance standards
- Due diligence requirements
- Disclosure of beneficial ownership
- Assessing countries (grey and black lists)
- The sanctions and risk-based approach
- Understanding the logic of strict checks
03 / What it covers
What matters about the FATF
What it is
- An intergovernmental body
- AML standards
- Global influence
What it sets
- Recommendations to countries
- The risk-based approach
- Compliance rules
Lists
- The “grey” list
- The “black” list
- Assessing jurisdictions
For the client
- Explains the strictness
- Compliance is the norm
- Prepare transparently
04 / How it works
How it affects the process
The FATF sets the standards
Recommendations on beneficial owners, source of funds, customer checks.
Countries implement the rules
Countries write the standards into national law.
Banks and programmes check
Banks and programmes apply the rules to every client.
The client’s transparent file
Documents on ownership and source of funds are ready in advance.
Passing successfully
The check goes through without extra requests.
05 / Key facts
What you need to know
01What it is
An intergovernmental body
It sets global standards against money laundering and terrorist financing.
02How it has an effect
Through national laws
Countries write FATF recommendations into their laws, and banks and programmes apply them to clients.
03Lists
Grey and black
Grey - jurisdictions under increased monitoring; black - high-risk jurisdictions.
04Not sanctions
Standards, not bans
FATF does not impose sanctions. States and bodies such as OFAC do.
Common mistakes
Seeing checks as a bank's whim
Prepare your file for the common rules: they are much the same everywhere.
Ignoring a country's FATF list status
Check whether your countries and counterparties are on the grey or black list.
Looking for a way round compliance
Pass the checks with a transparent file and honest disclosure.
06 / Expert advice
How to prepare in advance
Understanding that strict compliance is a consequence of the FATF’s global standards and not a bank’s whim, you prepare for checks properly: with a transparent file, honest disclosure of the beneficial owner and evidence of the source of funds. The status of jurisdictions (grey and black lists) is taken into account. Then checks go through as the norm rather than as an obstacle — we help you prepare for them.
What we do for you. 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.
Klara RihterBanking compliance and source of funds specialist
07 / Questions
Frequently asked questions
The Financial Action Task Force — an intergovernmental organisation that sets the global standards for combating money laundering and terrorist financing.
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.
The FATF assesses countries’ compliance with its standards. The “grey” list is increased monitoring of jurisdictions with deficiencies; the “black” list, high-risk jurisdictions.
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.
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.
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.
INITIAL ASSESSMENT
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We will design a solution for your case, choose the country and the right status, and take the whole process through to the result.
