Source: TH
Context: The Financial Action Task Force (FATF), during its ongoing plenary in Paris, is expected to deliberate on the issue of state-sponsored terrorism financing.
About Financial Action Task Force (FATF):
- What it is?
- The FATF is an intergovernmental policy-making body that sets global standards to combat money laundering, terrorist financing, and proliferation financing. It ensures that countries take effective legal, regulatory, and operational measures to prevent the misuse of financial systems.
- Established in: Formed in 1989 by the G7 countries during the Paris Summit to coordinate global efforts against financial crimes.
- Headquarters: Located in Paris, France, and hosted by the Organisation for Economic Co-operation and Development (OECD).
- Aim:
- To develop and promote international standards for combating money laundering and terrorism financing.
- To safeguard the integrity of the global financial system.
- To identify high-risk jurisdictions and ensure coordinated international action against illicit financial flows.
- Functions:
- Standard Setting: Issues FATF Recommendations, a globally accepted framework to combat financial crimes and terror funding.
- Monitoring and Evaluation: Conducts Mutual Evaluations to assess how effectively countries implement FATF standards.
- Identifying Non-Compliant Jurisdictions: Maintains the “Grey List” (Increased Monitoring) and “Black List” (High-Risk Jurisdictions) for nations failing to act against financial crimes.
- Research and Trend Analysis: Publishes reports on emerging risks such as cryptocurrency misuse, virtual assets, and state-sponsored terror financing.
- Collaboration: Works with over 200 countries and international organisations, including the IMF, World Bank, and UN, to strengthen global anti-financial crime systems.
