Functions of Financial Action Task Force (FATF)
The Financial Action Task Force (FATF) is an inter-governmental body policy making body established in 1989 by the Ministers of its Member jurisdictions. The FATF currently comprises 37 member jurisdictions and 2 regional organisations, representing most major financial centres in all parts of the globe. India is member of FATF since 2010. The current mandate of the FATF (2012-2020) was adopted at a Ministerial meeting in April 2012. Preventing money laundering is one of the most important functions of Financial Action Task Force.
History of FATF
In response to mounting concern over money laundering, the Financial Action Task Force on Money Laundering (FATF) was established by the G-7 Summit that was held in Paris in 1989. Recognising the threat posed to the banking system and to financial institutions, the G-7 Heads of State or Government and President of the European Commission convened the Task Force from the G-7 member States, the European Commission and eight other countries.
Objectives and Functions of Financial Action Task Force (FATF)
The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. In collaboration with other international stakeholders, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse.
The FATF’s decision making body, the FATF Plenary, meets three times per year.
The FATF President is a senior official appointed by the FATF Plenary from among its members for a term of one year (see also FATF Presidencies since 1989).
The term of the President begins on 1 July and ends on 30 June of the following year. The President convenes and chairs the meetings of the FATF Plenary and the Steering Group, and he/she oversees the FATF Secretariat.
Mr. Marshall Billingslea of the United States assumed the position of President of the FATF on 1 July 2018. He succeeded Mr. Santiago Otamendi of Argentina
The Secretariat of FATF is located at the OECD Headquarters in Paris. FATF is headed by Executive Secretary. Since 2015 David Lewis is the Executive Secretary of FATF.
There are currently 39 members of the FATF; 37 jurisdictions and 2 regional organisations (the Gulf Cooperation Council and the European Commission). These 39 Members are at the core of global efforts to combat money laundering and terrorist financing. There are also 31 international and regional organisations which are Associate Members or Observers of the FATF and participate in its work. Saudi Arabia had become the 1st Arab country to be granted full membership of the Financial Action Task Force. It became 39th member of FATF.
The FATF has developed a series of Recommendations that are recognised as the international standard for combating of money laundering and the financing of terrorism and proliferation of weapons of mass destruction. They form the basis for a co-ordinated response to these threats to the integrity of the financial system and help ensure a level playing field. First issued in 1990, the FATF Recommendations were revised in 1996, 2001, 2003 and most recently in 2012 to ensure that they remain up to date and relevant, and they are intended to be of universal application.
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