FATF: Protecting banking system and financial institutions
THE HANS INDIA |
Feb 15,2018 , 05:03 AM IST
The Financial Action Task Force (FATF) was established by the G-7 Summit that was held in Paris in 1989 in response to then mounting concern over money laundering. Recognising the threats posed to the banking system and 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.
In October 2001, the FATF expanded its mandate to incorporate efforts to combat terrorist financing, in addition to money laundering. Since its inception, the FATF has operated under a fixed life-span, requiring a specific decision by its ministers to continue. The current mandate of the FATF (2012-2020) was adopted at a Ministerial meeting in April 2012.
An inter-governmental body, FATF seeks 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. It is a policy-making body that works to generate the political will necessary to bring about national legislative and regulatory reforms in identified areas.
The recommendations that FATF has developed over the years are considered essential for combating international issues like money laundering, financing of terrorism, and proliferation of weapons of mass destruction. First issued in 1990, the FATF recommendations are revised periodically to ensure that they remain up to date and relevant for universal application. They form the basis for a co-ordinated response to such threats for ensuring the integrity of the financial system and a level playing field for all.