Financial Action Task Force
The Financial Action Taskforce, established at the G7 Summit in 1989, is concerned with international standards setting and the regulation of financial institutions and any other entities that could be utilized for the purposes of money laundering or terrorist financing.
A pre-requisite of membership of the FATF is membership in a regional financial action taskforce. This policy has led to the growth of several of such smaller task forces and heightened activity in this area.
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Policy Laundering Issues at FATF
The goal of setting international standards led the FATF to create forty detailed recommendations governing financial institutions and their practices.
The Forty Recommendations have had an enormous influence in the sphere of financial surveillance. Of particular importance are the requirements on suspicious transaction reporting and the retention and availability of all banking records for five years, both of which have spread universally across the financial world. In addition, the application of these measures to an increasing number of business entities, such as vehicle sales persons, guarantees an expanding net of surveillance.
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The FATF has been at the forefront of standard settings in governing financial institutions and other entities, largely due to its endorsement by the G7. The Forty Recommendations have been supplemented by a further Nine Special Recommendations on Terrorist Financing.
The FATF plays an active role in monitoring compliance with its standards, and any "rogue state" will be declared "non-cooperative," possibly leading to alienation in the financial world.
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