FATF 40 Recommendations
2 - © 2010 FATF/OECD
INTRODUCTION
Money laundering methods and techniques change in response to developing counter-measures. In
recent years, the Financial Action Task Force (FATF)
has noted increasingly sophisticated
combinations of techniques, such as the increased use of legal persons to disguise the true ownership
and control of illegal proceeds, and an increased use of professionals to provide advice and assistance
in laundering criminal funds. These factors, combined with the experience gained through the FATF’s
Non-Cooperative Countries and Territories process, and a number of national and international
initiatives, led the FATF to review and revise the Forty Recommendations into a new comprehensive
framework for combating money laundering and terrorist financing. The FATF now calls upon all
countries to take the necessary steps to bring their national systems for combating money laundering
and terrorist financing into compliance with the new FATF Recommendations, and to effectively
implement these measures.
The review process for revising the Forty Recommendations was an extensive one, open to FATF
members, non-members, observers, financial and other affected sectors and interested parties. This
consultation process provided a wide range of input, all of which was considered in the review
process.
The revised Forty Recommendations now apply not only to money laundering but also to terrorist
financing, and when combined with the Eight Special Recommendations on Terrorist Financing
provide an enhanced, comprehensive and consistent framework of measures for combating money
laundering and terrorist financing. The FATF recognises that countries have diverse legal and
financial systems and so all cannot take identical measures to achieve the common objective,
especially over matters of detail. The Recommendations therefore set minimum standards for action
for countries to implement the detail according to their particular circumstances and constitutional
frameworks. The Recommendations cover all the measures that national systems should have in place
within their criminal justice and regulatory systems; the preventive measures to be taken by financial
institutions and certain other businesses and professions; and international co-operation.
The original FATF Forty Recommendations were drawn up in 1990 as an initiative to combat the
misuse of financial systems by persons laundering drug money. In 1996 the Recommendations were
revised for the first time to reflect evolving money laundering typologies. The 1996 Forty
Recommendations have been endorsed by more than 130 countries and are the international anti-
money laundering standard.
In October 2001 the FATF expanded its mandate to deal with the issue of the financing of terrorism,
and took the important step of creating the Eight Special Recommendations on Terrorist Financing.
These Recommendations contain a set of measures aimed at combating the funding of terrorist acts
and terrorist organisations, and are complementary to the Forty Recommendations
.
A key element in the fight against money laundering and the financing of terrorism is the need for
countries systems to be monitored and evaluated, with respect to these international standards. The
mutual evaluations conducted by the FATF and FATF-style regional bodies, as well as the
assessments conducted by the IMF and World Bank, are a vital mechanism for ensuring that the
FATF Recommendations are effectively implemented by all countries.
The FATF is an inter-governmental body which sets standards, and develops and promotes policies to combat
money laundering and terrorist financing. It currently has 36 members: 34 countries and governments and two
international organisations; and more than 20 observers: five FATF-style regional bodies and more than 15 other
international organisations or bodies. A list of all members and observers can be found on the FATF website at
www.fatf-gafi.org.
The FATF Forty and Eight Special Recommendations have been recognised by the International Monetary Fund
and the World Bank as the international standards for combating money laundering and the financing of terrorism.