September 06, 2022
Demystifying the Financial Action Task Force
Unprecedented economic sanctions. SWIFT financial messaging bans. Central bank asset freezings. Russia’s invasion of Ukraine unleashed a new phase of economic warfare and heightened media and government attention to the opaque, byzantine world of international financial flows. Over the past six months, the G-7 and its partners implemented extensive multilateral economic sanctions, developed new uses of export control authorities, and rolled out the KleptoCapture and Russian Elites, Proxies, and Oligarchs (REPO) task forces. They also tried to close loopholes against Russian capital flight and sanctions evasion.
To implement many of these headline-catching initiatives, policymakers in Washington, Brussels, and beyond benefited from a global financial compliance architecture built up over the past three decades. Hundreds of thousands of dedicated financial crimes compliance professionals around the world shoulder the responsibility to police the global financial system for suspicious activity occurring in increasingly novel financial products and services.
The FATF will continue to play an important standard-setting and monitoring role to address illicit financing risks in the global financial system.
Some work for governments, but the overwhelming majority operate in the private sector within tens of thousands of regulated financial institutions. They contribute to broader anti-money laundering and countering the financing of terrorism (AML/CFT) public policy efforts that ramped up after the 9/11 attacks. Sitting at the top of this diffuse system is a 65-person, Paris-based intergovernmental standard-setting body called the Financial Action Task Force (FATF), which maintains an outsized yet understated role in shaping how trillions of dollars in value moves around the world every day. The FATF serves as the intergovernmental standard-setting body for AML/CFT compliance and periodically reviews countries on their implementation of these standards.
Julia Morse provides groundbreaking research into the FATF that makes the FATF more accessible and serves as a very helpful guide for understanding how unofficial market enforcement can be harnessed to address AML/CFT risks at the country level, both now and into the future.
Read the full article from Lawfare.
More from CNAS
-
Happy Summer from Derisky Business!
Podcast
While Derisky Business goes on summer break, revisit your favorite episodes of the podcast and dive into the Summer Reading List, featuring book recommendations from previous ...
By Emily Kilcrease & Geoffrey Gertz
-
The Derisky Business Reading List
Commentary
While Derisky Business goes on summer break, revisit your favorite episodes of the podcast and dive into the Summer Reading List, featuring book recommendations from previous ...
-
Podcast
Transatlantic Security / Energy, Economics & Security
From Russia with RiskHere on the Bear Market Brief, a lot of what we focus on is, simply put, risk: what might happen, and what might it mean? On this episode, Rachel Ziemba, an adjunct senior fel...
By Rachel Ziemba
-
Richard Nephew on the U.S. military strikes on Iran’s nuclear program
Podcast
Richard Nephew, expert on sanctions and Iran’s nuclear program, joins Emily and Geoff to discuss the long history of U.S. policy towards Iran, the role of sanctions in constra...
By Emily Kilcrease & Geoffrey Gertz
