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- Financial Action Task Force (FATF)
Financial Action Task Force (FATF)
The Financial Action Task Force (FATF) is an inter-governmental watchdog organization that collaborates with policymakers to prevent money laundering and combat terrorism financing on a global scale. Each country faces unique threats to its financial institutions, so FATF recommendations operate as a set of best practices for countries to model.
FATF’s mutual evaluation process is rigorous. First, FATF agents travel to a foreign country to conduct an on-site assessment of that country’s policy effectiveness. Then, the agents draft a mutual evaluation report that details whether the country is compliant with FATF recommendations.
A mutual evaluation report places each country into a category based on its adherence to Anti-Money Laundering (AML), combatting the financing of terrorism (CFT), and Know Your Customer (KYC) guidelines. Those categories include a high level of effectiveness, a substantial level of effectiveness, a moderate level of effectiveness, and a low level of effectiveness.
A country may comply by carefully implementing FATF recommendations into its legal systems. In particular, the FATF equips officials and authorities with resources to enforce the FATF recommendations effectively.
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