In response to mounting concern over money laundering, FATF was established by the G-7 at a summit held in Paris in 1989. The original members came not just from the G-7, but also from the European Commission and 8 other Countries. In April 1990, less than 1 year after its creation, FATF issued 40 Recommendations, which were intended to provide a comprehensive action plan to combat money laundering.
These have been revised and updated and are now supported by 11 immediate objectives to measure “Effectiveness.” According to FATF, “The extent to which a country implements the technical requirements ….of each of the [40] recommendations is important….but this is not sufficient” as “each country must enforce those measures and ensure that the operational law-enforcement and legal components of an AML/CFT System works together effectively …to deliver results.”
Results released at the end of the February, 2019 Plenary for 70+ Countries assessed show Countries need to do more. Based on a simple scoring methodology, and taking the results published, the overall average score* for Country compliance
- with the 40 Recommendations is 64%; and
- against the Effectiveness criteria is 31%.
