The Financial Action Task Force (FATF) is an intergovernmental organization that designs and promotes policies and standards to combat financial crime. Recommendations created by the Financial Action Task Force (FATF) target money laundering, terrorist financing, and other threats to the global financial system. The FATF was built in 1989 at the behest of the G7 and is headquartered in Paris.
KEY TAKEAWAYS
- A credit score is a number that depicts a consumer’s creditworthiness. FICO scores range from 300 to 850.
- Factors used to calculate your credit score include repayment history, types of loans, length of credit history, debt utilization, and whether you’ve applied for new accounts.
- A credit score plays a key role in a lender’s decision to offer credit and for what terms.
- The three main U.S. credit bureaus (Equifax, Experian, and TransUnion) may each calculate your FICO score differently.
Understanding the Financial Action Task Force (FATF)
The rise of the global economy and international trade has given rise to financial crimes such as money laundering. The Financial Action Task Force (FATF) makes recommendations for combating economic crime, reviews members’ policies and procedures, and seeks to increase the acceptance of anti-money laundering regulations across the globe. Because money launderers and others alter their techniques to avoid apprehension, the FATF must update its recommendations every few years.
A list of recommendations to combat terrorist financing was added in 2001. In the latest update, published in 2012, the proposals were expanded to target new threats, including financing the spread of weapons of mass destruction. Recommendations were also added to be more transparent on transparency and corruption.
Members of the Financial Action Task Force
As of 2021, there were 39 members of the Financial Action Task Force, including the United Nations and the World Bank. To become a member, a country must be considered strategically important (large population, large GDP, developed banking and insurance sector, etc.), adhere to globally accepted financial standards, and participate in other important international organizations.
Once a member, a country or organization must endorse and support the most recent FATF recommendations, commit to being evaluated by (and evaluating) other members, and work with the FATF in developing future recommendations.
Many international organizations participate in the FATF as observers, each of which has some involvement in anti-money laundering activities. These organizations include Interpol, the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), and the World Bank.
