Monday, April 18, 2016

Financial Action Task Force (FATF) to Mitigate Money Laundering Offences

Due to the complexities of money laundering activities and their potential negative impacts towards a country's economic growth, there are a lot of agencies being set up to monitor and mitigate money laundering offences.  At the international level, one very prominent agency is the Financial Action Task Force (FATF).  FATF is an inter-governmental body established in 1989 during the 1989 G7 Summit in Paris to combat the growing problem of money laundering. The task force was charged with studying money laundering trends, monitoring legislative, financial and law enforcement activities taken at the national and international level, reporting on compliance, and issuing recommendations and standards to combat money laundering. At the time of its creation, the organisation had 16 original members.  Today, there are 37 FATF country members (Malaysia included), 2 FATF Observers and 9 FATF Associate members (APG, CFATF, MONEYVAL, EAG, ESAAMLG, GAFILAT, GIABA, MENAFATF and GABAC. 

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.  The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.  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. 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. The FATF monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures, and promotes the adoption and implementation of appropriate measures globally.  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. There's a lot of interest among researchers to explore topics in Money laundering research.  The Accounting Research Institute (ARI) has established a dedicated research cluster to conduct research on money laundering-related issues.

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