Today, the problem of criminal money circulation is quite acute both at the regional level and at the global level - between countries. Various international organizations are engaged in combating these illegal operations. In the article, we will take a closer look at the activities of the FATF - a group for developing financial measures to combat money laundering. Its importance can hardly be overestimated, as it does its best to oppose the financing of criminal groups and terrorism around the world.
What is this
According to the general definition, the FATF is an international organization engaged in the preparation of world standards in the field of combating money laundering and the financial support of terrorist organizations. In addition, the FATF is committed to assessing national systems against established international standards. The main tool in the activity describedForty recommendations in the field of AML / CFT are considered to the organization, which are carefully reviewed (approximately every five years). The President of the FATF Group is Santiago Otamendi.
History of occurrence
As far back as 1989 of the last century, according to the decision of the countries that are members of the "Big Seven", the FATF was formed. This meant that an international institution appeared, which was entrusted with the mission of developing and implementing international standards in the field of AML/CFT. More than thirty-five states and two international organizations are part of the group. About twenty organizations and two powers act as observers.
Structure and activities
The FATF Group constantly holds plenary meetings at least three times a year, at which certain decisions are made. Also the tool of this institute are its working groups:
- by typology;
- Assessment and Implementation;
- terrorist financing;
- on the study of international cooperation.
FATF is also an organization that actively interacts with the World Bank, the International Monetary Fund and the United Nations Office for Combating Crime and Drug Trafficking. All these structures develop and implement programs to combat money laundering and investment in criminal activities.
One of the most important instruments of the FATFare several financial intelligence units (or FIUs for short) that are responsible for collecting and examining financial information within a single country in order to search for and detect illegal money "migrations".
FATF Membership
More than 35 countries are members of the world famous FATF Group. The participating countries are: Australia, New Zealand, Asia and Europe, USA, Mexico, Brazil, Argentina, South Africa, and the Russian Federation. The latter has been a member of the FATF since June 2003. In addition to countries, this includes two international organizations: the Cooperation Council for the Arab States of the Gulf and the European Commission.
It is noteworthy that it was on Russia's initiative that in 2004 the Federal Financial Monitoring Service took part in the activities of the FATF on behalf of the Russian Federation.
Features of recommendations
The documents of the international institute contain materials, namely a set of organizational and legal measures that must be taken in each country to create an effective regime for combating money laundering and the financing of terrorism. Such features of measures as universality and complexity are expressed as follows:
- Maximum coverage of anti-money laundering issues;
- relationship with other international conventions, acts of relevant international organizations involved in AML/CFT, UN Security Council resolutions, etc.;
- Enabling countries to adopt flexible policies,resolving these issues, taking into account national characteristics and the specifics of the legal system.
All FATF recommendations in no way replace similar resolutions of other organizations and do not duplicate them. On the contrary, they bring the principles together, playing a very important role in the course of codifying AML/CFT rules and regulations. According to one of the resolutions of the Security Council, the 40 FATF recommendations are considered binding for all UN member states without exception.
How it was developed
The forty recommendations were originally created when it was necessary in 1990 to develop rules and protect financial systems from criminals who laundered money from the sale of drugs. Later, namely six years later, the FATF standards were revised due to changes in technology, the emergence of new trends and ways to launder finances.
In October 2001, the FATF mandated first eight and then nine special recommendations on combating the financing of terrorism.
The group's standards were revised for the second time already in 2003 and were recognized in one hundred and eighty countries. At the moment, they are considered the international standard for combating illegal money laundering and the financing of terrorist organizations.
Subtypes of recommendations
The entire list of FATF (in particular the standards) can be divided into several groups:
- coordination and politicsregarding countering illegal money flows;
- money laundering and confiscation;
- terrorist financing;
- a series of preventive measures;
- transparent ownership and activities of legal entities;
- international cooperation;
- responsibility and authority of relevant authorities and other measures.
Regional groups
To carefully monitor international cash flows and transactions, and to stop criminal activities in this regard, there are special regional groups like the FATF. They contribute to the dissemination of international standards throughout the world. Each of the groups deals with its specific region and studies the specifics of money circulation. In addition, mutual assessments of national financial systems are carried out for compliance with standards and a study of current trends.
What are these bands? There are eight of them in the world: Asia-Pacific, a group in South America, Eurasia, a group in East and South Africa, a group in the Middle East and North Africa, a Committee of Experts of the European Council, a Caribbean group and a group in West Africa. Another one, to combat money laundering in Central Africa, has not yet received recognition and has not become part of the regional FATF-style.
Blacklist
One of the activities of the described institution is to study which countries and organizations do not comply with the FATF recommendations. In other wordsthe so-called non-cooperative countries and territories are determined, their list is compiled, which is called "black". The inclusion of a state in this list does not lead to the application of sanctions, but it indicates the degree of confidence in this country on the part of foreign investors.
Inclusion or exclusion from the blacklist is carried out at FATF meetings in accordance with the following criteria established in 2000:
- gaps in financial regulation - these can be transactions in payment systems without the necessary authorization;
- legislative obstacles, such as the inability to identify the owner of the company;
- obstacles in international cooperation - this includes the prohibition to give information about the company at the legislative level;
- Inadequacy of measures to combat money laundering, for example, insufficient staff qualifications, corruption, etc.
According to world statistics and the World Bank data on the shadow economy, more than ten trillion US dollars worth of goods and services are produced and provided every year.