Type of paper: Essay

Topic: Corruption, Money, Social Issues, Crime, Finance, Actions, Terrorism, Laundering

Pages: 2

Words: 550

Published: 2020/11/13

‘Instructor’s Name’

‘Subject’
FATF (Financial Action Task Force)
The Financial Action Task Force (FATF) is an organization that sets the international standards to prevent money laundering and terrorist funding. It is an inter-governmental body established to combat threats related to integrity of international financial transactions. In response to the growing concern over the illicit global money laundering activities, the G-8 submit that was held in Paris, in the year 1989, founded the FATF.
During this summit, a task force was formed and it was asked to scrutinize the money laundering techniques and trends, and submit a report with recommendations. By 1990, the FATF created a comprehensive action plan to combat money laundering with forty recommendations and during later years, 9 special recommendations were added to combat terrorism financing. Together these 49 recommendations act as the guiding principles of the FATF.
The nine recommendations were added after the 9/11 terror strikes in the US. On the aftermath of these attacks, the FATF decided to concentrate its resources and energy in monitoring and eliminating the funding systems that help terrorist groups. Terrorists raise money for their operation through criminal activities, and hiding the connections between their sources and the perpetrators of terror activities. FATF formulates regulations so that terror groups and their supporters would not be able to use the international financial system to fund their missions.
Since its inception, the FATF has fought to control and streamline the financial systems of its member nations, so that criminals do not take advantage of the system. FATF places huge importance on fight against corruption, as corruption hampers economic development and impedes the fight against organized crime. The FATF identifies possible vulnerabilities in a member nation’s financial system, so that it can protect it against misuse.
FATF is working towards developing international instruments against corruption both at regional and international levels. The measures taken by FATF to combat money laundering and terrorist financing (ML/TF) are powerful tools that are useful in the fight against corruption, as major part of the money financing terrorists is generated through corruption offences.
Offences such as bribery, embezzlement, abuse of power and trading influence in public and private sector are acts of corruption. Such offences are generally committed for private gain. The gains arising out of such corrupt practices are, usually, laundered, because these funds can be used for criminal activities without the fear of detection. Also, corrupt officials go to great lengths to conceal their identity, to place the money derived from corrupt transactions in the financial system. Similarly, bribe payers also make use of money laundering schemes to conceal the link between themselves and the corrupt officials.
Thus, the FATF recommendations, which are used to combat money laundering schemes, are very handy in combating corruption. Some of these recommendations include recognizing corruption risks and taking measures proportionate to those risks, and directing countries to put in mechanisms to recover proceeds of corruption offences. Its recommendations further state that, financial institutions should verify the identity of the customer before conducting transactions on behalf of them. The law enforcement bodies should be vested with sufficient powers to obtain financial records as evidence, when they suspect a transaction to be corrupt. All the records pertaining to customer identification and transactions should be properly maintained. Such standards set by FATF aid in detecting, tracing and recovering corruption proceeds laundered through financial systems.
FATF experts aid local governments with investigation and international cooperation in corruption cases. Corrupt officials need access to financial systems to fund their lifestyles. FATF recommendations recognize the vulnerability of such financial institutions and provide measures to combat their misuse. In opaque circumstances, where the source of the corruption fund cannot be traced, the crime will go unpunished and the proceeds cannot be recovered. Whereas, FATF recommendations suggest those steps that would put in preventive measures, which would enable counties to fight against corruption.

Works Cited

FATF. About Us. 2015. Web. <http://www.fatf-gafi.org/pages/aboutus/whatwedo/>. 14 February 2015.
—. The use of FATF measures to comabt corruption. Best Practices Paper. Paris: The Financial Action Task Force (FATF), 2013. Pdf.
Organization for economic cooperation and development. Financial Action Task Force (FATF). 2015. Web. <http://usoecd.usmission.gov/fatf.html>. 14 February 2015.
United States Department of Treasury. The Financial Action Task Force. 2015. Web. <http://www.fincen.gov/international/fatf/>. 14 February 2015.

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WePapers. (2020, November, 13) Free ‘name’ Essay Example. Retrieved June 17, 2024, from https://www.wepapers.com/samples/free-name-essay-example/
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"Free ‘name’ Essay Example." WePapers, Nov 13, 2020. Accessed June 17, 2024. https://www.wepapers.com/samples/free-name-essay-example/
WePapers. 2020. "Free ‘name’ Essay Example." Free Essay Examples - WePapers.com. Retrieved June 17, 2024. (https://www.wepapers.com/samples/free-name-essay-example/).
"Free ‘name’ Essay Example," Free Essay Examples - WePapers.com, 13-Nov-2020. [Online]. Available: https://www.wepapers.com/samples/free-name-essay-example/. [Accessed: 17-Jun-2024].
Free ‘name’ Essay Example. Free Essay Examples - WePapers.com. https://www.wepapers.com/samples/free-name-essay-example/. Published Nov 13, 2020. Accessed June 17, 2024.
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