What is the Financial Action Task Force (FATF)?
The Financial Action Task Force (FATF) is an intergovernmental body that functions as a global watchdog, setting the international standard for anti-money laundering (AML) and counter-terrorist financing (CTF) procedures.
This standard is called the FATF Recommendations and includes requiring countries to regulate and supervise financial institutions.
How are the AML/CTF controls of financial institutions measured?
Financial institutions must also abide by their own set of AML and CTF controls that help the FATF understand their business:
- The countries in which the institution operates, as well as the diversity of their operations
- The risk associated with each area of operation
- The distribution channels that they use
- The volume and size of transactions, and the extent of business conducted through third-parties or intermediaries
- The nature scale and complexity of their business
