Financial Action Task Force

The Financial Action Task Force (FATF) was established in 1989 by the G7 at its Paris summit, originally to address money laundering linked to drug trafficking. Its mandate was expanded after the September 11, 2001 attacks to cover terrorist financing, and later broadened again to include proliferation financing connected to UN Security Council resolutions on Iran and North Korea.

FATF is not a UN organ but operates in close coordination with the UN system, the IMF, the World Bank, and regional bodies. It is headquartered at the OECD in Paris, though it is institutionally distinct from the OECD. Its membership comprises 38 member jurisdictions plus the European Commission and the Gulf Cooperation Council, supplemented by a network of nine FATF-Style Regional Bodies (FSRBs) such as MONEYVAL, APG, and GAFILAT that extend its reach to roughly 200 jurisdictions.

The core output of FATF is the 40 Recommendations, first issued in 1990 and substantially revised in 2003 and 2012, which set the international benchmark for anti-money laundering (AML) and countering the financing of terrorism (CFT) regimes. Compliance is assessed through peer-reviewed mutual evaluations measuring both technical compliance and effectiveness.

FATF is best known publicly for its two listing mechanisms:

• The "black list" (high-risk jurisdictions subject to a call for action), which has historically included North Korea and Iran.
• The "grey list" (jurisdictions under increased monitoring), which has at various points included Pakistan, Turkey, the UAE, and South Africa.

Listing carries significant reputational and economic consequences, often triggering enhanced due diligence by foreign banks and affecting capital flows. The FATF Plenary, which meets three times per year, takes decisions by consensus. Its presidency rotates annually among member states.