The Financial Action Task Force on Money Laundering (FATF), also known by the French name Groupe d'action financière sur le blanchiment de capitaux (GAFI), is an inter-governmental body founded in 1989 by the G7. The purpose of the FATF is to develop policies to combat money laundering and terrorist financing. The FATF Secretariat is housed at the headquarters of the OECD in Paris. Group of Eight redirects here. ... Money laundering is the practice of engaging in financial transactions in order to conceal the identity, source and destination of the money in question. ... The neutrality of this section may be compromised by weasel words. ... The Organization for Economic Co-operation and Development (OECD) is an international organization of those developed countries that accept the principles of representative democracy and a free market economy. ...

The FATF Forty Recommendations and Special Recommendations on Terrorist Financing

The primary policies issued by the FATF are the Forty Recommendations on money laundering and the Special Recommendations on Terrorist Financing

Together, the Forty Recommendation and Special Recommendations on Terrorist Financing set the international standard for anti-money laundering measures and combating the financing of terrorism. Both sets of FATF Recommendations are intended to be implemented at the national level through legislation and other legally binding measures.

The FATF issued the Forty Recommendations in 1990 and completely revised them in 1996 and 2003. The current (2003) Forty Recommendations require states, among other things, to:

• implement relevant international conventions
• criminalise money laundering and enable authorities to confiscate the proceeds of money laundering
• implement customer due diligence (eg identity verification), record keeping and suspicious transaction reporting requirements for financial institutions and designated non-financial businesses and professions
• establish a financial intelligence unit to receive and disseminate suspicious transaction reports, and
• cooperate internationally in investigating and prosecuting money laundering.

The FATF issued 8 Special Recommendations on Terrorist Financing in October 2001, following the September 11 terrorist attacks in the United States. The FATF issued a ninth Special Recommendation on Terrorist Financing in October 2004. Financial Intelligence (or FININT) is the gathering of information about the financial affairs of entities of interest, to understand their nature and capabilities, and predict their intentions. ... A sequential look at United Flight 175 crashing into the south tower of the World Trade Center The September 11, 2001 attacks (often referred to as 9/11—pronounced nine eleven or nine one one) consisted of a series of coordinated terrorist[1] suicide attacks upon the United States, predominantly...

The Special Recommendations on Terrorist Financing broadly extend the application of the Forty Recommendations to terrorist financing and introduce new requirements relating to services such as alternative remittance, wire transfers and cash couriers as well as non-profit organisations. An informal value transfer system (IVTS) refers to any system, mechanism, or network of people that receives money for the purpose of making the funds or an equivalent value payable to a third party in another geographic location, whether or not in the same form. ... A wire transfer is a method of transferring funds from one entity to another. ... A non-profit organization (abbreviated NPO, or non-profit or not-for-profit) is an organization whose primary objective is to support an issue or matter of private interest or public concern for non-commercial purposes, without concern for monetary profit. ...

List of Non-Cooperative Countries or Territories

In addition to FATF's "Forty plus Nine" Recommendations, in 2000 FATF issued a list of "Non-Cooperative Countries or Territories" (or "NCCTs", and commonly called the FATF Blacklist). This was a list of 15 jurisdictions that, for one reason or another, FATF members believed were uncooperative with other jurisdictions in international efforts against money laundering (and, later, terrorist financing). Typically, this lack of cooperation manifested itself as an unwillingness or inability (frequently, a legal inability) to provide foreign law enforcement officials with information relating to bank account and brokerage records, and customer identification and beneficial owner information relating to such bank and brokerage accounts, shell company, and other financial vehicles commonly used in money laundering. The FATF Blacklist is the common shorthand description for the Financial Action Task Force list of Non-Cooperative Countries or Territories (NCCTs); that is, countries which it perceives to be non-cooperative in the global fight against money laundering and terrorist financing. ... The FATF Blacklist is the common shorthand description for the Financial Action Task Force list of Non-Cooperative Countries or Territories (NCCTs); that is, countries which it perceives to be non-cooperative in the global fight against money laundering and terrorist financing. ... Beneficial ownership is gained by anyone who enjoys a benefit of ownership of a U.S. bank account and yet does not own the account itself. ... A shell corporation (aka International Business Corporations - IBCs -, Personal Investment Companies - PICs -, front companies or mailbox companies) is defined in Barrons Finance & Investment Handbook as a company that is incorporated but has no significant assets or operations. ...

The effect of the FATF Blacklist has been significant, and arguably has proven more important in international efforts against money laundering than has the FATF Recommendations. While, under international law, the FATF Blacklist carries with it no formal sanction, in reality, a jurisdiction placed on the FATF Blacklist often finds itself under intense financial pressure. As a result of the FATF 40+8 Recommendations (among other initiatives), most countries now require their banks to report certain suspicious financial activities to the appropriate financial regulators and law enforcement authorities. (In the United States, these are called Suspicious Activity Reports or S.A.R.'s.) Most larger countries with significant financial centers consider transactions coming from or transferring to a jurisdiction on the FATF Blacklist to be a suspicious activity, which automatically triggers closer regulatory scrutiny (and considerably more paperwork on the bank's part). Because of this, many major financial institutions will not conduct business with counterparts based in NCCTs. Since many of the countries that FATF originally listed as NCCTs have major financial industries (i.e., the Bahamas, Cayman Islands, Liechtenstein), such de facto boycotts could have a significant effect on a country's economy (or at least a politically powerful sector of the economy). This article or section is in need of attention from an expert on the subject. ... A Suspicious Activity Report (or SAR) is a report regarding suspicious or potentially suspicious financial activity, filed with FinCEN (the FINancial Crimes Enforcement Network), an arm of the United States Department of the Treasury. ... Look up Boycott in Wiktionary, the free dictionary. ...

To date, of the 23 jurisdictions originally named by FATF as NCCTs, all but one have changed their laws and instituted other changes (such as creating Financial Intelligence Units) to convince FATF members to remove them from the Blacklist. Financial Intelligence (or FININT) is the gathering of information about the financial affairs of entities of interest, to understand their nature and capabilities, and predict their intentions. ...

Members

The FATF currently has 44 members, comprising 42 member countries and territories and 2 regional organisations, as follows:

1. Argentina
2. Australia
3. Austria
4. Belgium
5. Brazil
6. Canada

1. Cyprus
2. Czech Republic
3. Denmark
4. Estonia
5. EC
6. Finland
7. France
8. Germany
9. Greece
10. GCC
11. Iceland
12. Ireland
13. Italy
14. Japan
15. Latvia
16. Luxembourg

1. Mexico
2. New Zealand
3. Netherlands
4. Norway

1. Portugal
2. Poland

1. Singapore
2. Slovenia
3. South Africa
4. Spain
5. Sweden
6. Switzerland
7. Taiwan
8. Turkey
9. United Kingdom
10. United States

EC may stand for: Extended coverage - an insurance term Extra Credit Eye contact Eric Clapton English Ceilidh Entertaining Comics Entorhinal cortex - important memory center in the brain Emergency contraception Early childhood education Early Childhood, a rating from ESRB. Usually means ages 3 and up. ... GCC may stand for: Gulf Cooperation Council GNU Compiler Collection (formerly, the GNU C Compiler) Garde côtière canadienne (Canadian Coast Guard) Germanna Community College Glendale Community College global carbon cycle Global Climate Coalition Grand Council of the Crees (gcc. ...

Observer members

South Korea, India, the 8 FATF-Style Regional Bodies and several international organisations including the International Monetary Fund and the World Bank hold observer status with the FATF. IMF redirects here. ... The World Bank logo The World Bank (the Bank) is a part of the World Bank Group (WBG), is a bank that makes loans to developing countries for development programs with the stated goal of reducing poverty. ...

See also

• Anti-money laundering
• FATF Blacklist

Anti-money laundering is a term mainly used in the finance and legal industries to describe the legal controls that require financial institutions and other regulated entities to prevent or report money laundering activities. ... The FATF Blacklist is the common shorthand description for the Financial Action Task Force list of Non-Cooperative Countries or Territories (NCCTs); that is, countries which it perceives to be non-cooperative in the global fight against money laundering and terrorist financing. ...

External links

• Financial Action Task Force on Money Laundering
• FATF Annual Review of Non-Cooperative Countries and Territories, 2005-2006
• A review of the FATF Principles - 'The Global Standard' from Rohanbedi.com
• Training and seminars on FATF, etc interpretation, application, compliance and implementation from The Anti Money Laundering Network
• Analysis and comparison of FATF / similar bodies provisions - for members of The Society of Anti Money Laundering Professionals.

External sources

Hawala. An Informal Payment System and Its Use to Finance Terrorism by Sebastian R. Müller, Dec. 2006, VDM Verlag, ISBN: ISBN-10: 3865506569, ISBN-13: 978-3865506566