The FATF evaluates member countries on their implementation of FATF Recommendations to combat money laundering, terrorist financing, and the proliferation of weapons of mass destruction**. The updated Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CFT/CPF Systems, amended in August 2024, outlines a two-pronged approach: effectiveness and technical compliance.
Effectiveness is crucial, focusing on whether countries effectively use their laws and policies to protect financial systems from abuse. The assessment looks at 11 key areas to determine how well countries address major risks, ensuring that efforts are directed towards high-risk areas rather than just easier targets.
Technical compliance assesses whether countries have the necessary legal and regulatory frameworks in place, adhering to the 40 FATF Recommendations. This component ensures that the fundamental structures needed to combat financial crime and terrorism are established.
The FATF revised its methodology in 2022, starting the 5th round of evaluations under this new framework in 2024. FATF-Style Regional Bodies will also implement this methodology as they complete their previous evaluations. For countries still under the 2013 methodology, the earlier framework remains applicable until their evaluations conclude.
Mutual evaluation reports provide detailed analyses and recommendations for enhancing a country’s anti-money laundering and counter-terrorist financing systems. These reports are intended to identify priority actions to strengthen national frameworks and improve effectiveness.
The updated Methodology, adopted in February 2022, introduces a six-year evaluation cycle, a significant reduction from the previous ten-year cycle. This change follows a comprehensive review of the 4th round of mutual evaluations, aiming to improve the efficiency and impact of the FATF’s assessment process.
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Danmarks Nationalbank signs agreements on th...
