Financial Action Task Force

Overview

The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 that sets the international standards on anti-money laundering, counter-terrorism financing and countering the financing of proliferation (FATF Standards). Through the international standards the FATF promotes effective implementation of legal, regulatory and operational measures to combat money laundering, terrorist financing and other threats to the integrity of the international financial system.

Australia is a founding and active member of the FATF. Our department leads Australia’s engagement with the FATF.

FATF Standards

The FATF Standards comprise 40 Recommendations, which set out the technical standards for anti-money laundering and counter terrorism financing compliance, and 11 Immediate Outcomes, which measures how effectively a jurisdiction implements the FATF 40 Recommendations.

The FATF 40 Recommendations set out a comprehensive framework of measures to combat money laundering and terrorist financing, as well as to combat financing the proliferation of weapons of mass destruction. The FATF 40 Recommendations set an international standard for jurisdictions to implement through measures adapted to their particular circumstances. Jurisdictions should identify, assess and understand the risks of money laundering and terrorist financing that they face, and then adopt appropriate measures to mitigate that risk. The risk-based approach allows jurisdictions to work within the framework of the FATF requirements to adopt a more flexible set of measures and apply preventative measures that are commensurate to their risks, in order to focus resources and efforts in the most effective way.

Mutual evaluation

The FATF assesses its members’ compliance with the FATF Standards through a peer-review process called a mutual evaluation. Mutual evaluations focus on the effectiveness of countries’ anti-money laundering and counter-terrorism financing (AML/CTF) regimes, as well as countries’ technical compliance with the FATF 40 Recommendations.

The fourth round of assessments of countries’ compliance with the revised FATF Standards began in late 2013. Australia underwent the mutual evaluation process in 2014 as one of the first countries to be assessed against the revised FATF Standards. Australia’s mutual evaluation report was considered and adopted at the FATF plenary meeting on 27 February 2015. The final report was released on 21 April 2015 and is available from the FATF website.

The FATF Standards have been further updated for the fifth round of assessments to reflect the FATF’s increased expectations of global AML/CTF effectiveness. The fifth round will commence in 2024, with Australia to undergo its next mutual evaluation process from 2025-2027.

Engagement

Our department leads Australia’s engagement with the FATF.

Australia is also a member and permanent co-chair of the Asia-Pacific Group (APG) on Money Laundering, the FATF-style regional body for the Asia-Pacific region. The Australian Transaction Reports and Analysis Centre (AUSTRAC) leads Australia’s engagement with the APG, with support from us.