The Financial Action Task Force (FATF) has published a report providing a comprehensive overview of the state of the global efforts to handle ML/TF and proliferation financing. This report draws on data from the authority’s mutual evaluation reports published since 2013. Highlights from this report are discussed below.
The report recognizes a substantial improvement in the state of member countries’ technical compliance through AML/CFT laws and regulations. Notably, 76% of the member jurisdictions have implemented the FATF’s 40 Recommendations, compared to a mere 36% in 2012. This significant jump highlights the importance of the FATF Mutual Evaluation and Follow-up processes.
Yet, many countries are far from being in an ideal state when it comes to taking actions appropriate to their risks and vulnerabilities. This is because these countries have difficulties in investigating high-profile cross-border cases and preventing the use of shell companies to commit financial crimes.
In this report, the FATF has also analysed the results of the current round of mutual evaluations. It has further used this analysis to modify its evaluation procedures for the next round. Particularly, the next round of evaluations will have a shorter mutual evaluation cycle, emphasize on the major risks that countries face so they can pay more attention to these areas, and employ an outcome-based follow-up assessment process.