FATF history, management structure & members
Financial Action Task Force (FATF) is a policy making body formed by G7 countries including USA, UK, Canada, Japan, Italy, France & Germany on 1989 in Paris.
Primarily to make regulations to control money laundering & after 9/11 also included consideration to combat terrorist financing & prevention of mass production of destructive weapons.
Starting from 8 members, fatf now have 37 countries and 2 regional organizations, including European Commission & Gulf Co-operation Council, as members.
As of now, FATF have 9 associated FATF style regional member bodies (FSRBs),that have similar objectives:
- Asia/Pacific Group on Money Laundering (APG)
- Caribbean Financial Action Task Force (CFATF)
- Council of Europe Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL)
- Eurasian Group (EAG)
- Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG)
- Financial Action Task Force of Latin America (GAFILAT) (formerly known as Financial Action Task Force on Money Laundering in South America (GAFISUD)
- Inter Governmental Action Group against Money Laundering in West Africa (GIABA)
- Middle East and North Africa Financial Action Task Force (MENAFATF)
- Task Force on Money Laundering in Central Africa (GABAC)
Indonesia serving as observer including list of world organizations like IMF, World Bank, Asian Development Bank, UNO & 19 others.
Members of the FATF regional bodies that are not full FATF members are entitled to attend FATF meetings as individual member-delegates of the regional bodies and to intervene on policy and operational issues.
How FATF & Its bodies work:
FATF is a recommendatory, regulating authority. Making regulations with the help of regional bodies. Keeping suspicious countries/ organizations under observation, popularly known as grey list. There is only 2 countries right now, in black list, including Iran & North Korea. Black list countries can face strict financial, trade & international relation sanctions.
FATF regulations, standards & publications:
FATF have issued 40 rules set for money laundering, which then added by 9 more rules on counter terrorism finance, making up total tally to 49.
History with Pakistan & Why FATF matters to Pakistan:
Pakistan is a member of APG, regional member body of FATF. FATF showed concerned about strategic deficiencies in AML/CFT measures by Pakistan in 2008, in 2009 APG & World Bank conducted mutual evaluation.
Pakistan 1st time included Pakistan on its observance list during 2013-2016 & after satisfied performance Pakistan got cleared. In March 2018, FATF took Pakistan under observation again. On October 23, 2020, after giving satisfactory remarks, FATF further extended Pakistan observation till 21st February 2021, as Pakistan fulfilled 21 out of 27 points.
These developments are important as FATF clean chit can improve outer look & perception about Pakistan. Hence Pakistan can get more financial advantage & trade from developed economies. Further international lenders can relax bindings for Pakistan, ultimately which then ease country economy.