Fortifying the fight against illicit finance

The global illicit economy, worth trillions of dollars, is neither a distant nor remote problem. It fuels violence, drug addiction and corruption. It distorts markets and impedes sustainable development by robbing governments of the resources needed for vital services such as health, education and infrastructure. 

Addressing these issues requires buy-in on a global scale. This is where the Financial Action Task Force comes in. Together with our Global Network – composed of more than 200 jurisdictions and nine FATF-Style Regional Bodies – we close loopholes, broaden access to the financial system and ensure that crime does not pay. 

The FATF is ahead of the curve. Although technological shifts present new challenges for the private and public sectors alike, they also mark new opportunities in the fight against financial crime – from advancing financial inclusion to enhancing cross-border cooperation and building more secure systems throughout the world.

In line with the G20 initiative to make cross-border payments faster, cheaper, more transparent and more inclusive, the FATF recently strengthened international requirements on the transparency of cross-border payments, to make these safer and more secure. With cross-border volumes expected to exceed $250 trillion by 2027, greater clarity on who is sending and receiving funds from abroad is critical to preventing fraud and abuse. 

Harnessing technology, reinforcing global defences

The FATF encourages new technological developments to help countries and the private sector keep pace in preventing and tackling crime, tracking illegal transactions, sharing intelligence and information, and reconciling data privacy. This includes working with the private sector to scan the horizon to proactively mitigate emerging fraud trends, while supporting the development of cost-efficient tools. We are also supporting all countries, in particular those with materially important virtual assets sectors, in implementing adequate monitoring frameworks. 

The FATF’s approach is grounded in addressing risks to be effective. We work with the private sector and industry to ensure counter-illicit finance requirements are clear, efficient and reasonable. This includes addressing under-implementation but also over-compliance. We recently released guidance to improve efficiency for industry while advancing financial inclusion. For the 1.4 billion people who remain unbanked today, gaining access to safe and trustworthy systems is the first step towards broader opportunity. This reduces the size of the unregulated ecosystem, making it harder for criminals and terrorist to hide. By encouraging simplified measures in low-risk situations, the changes will empower more members of unserved and underserved groups to access and use the regulated financial system with fewer unnecessary barriers.

Collective action to build resilience

As the world’s illicit finance watchdog, we have raised the alarm about recent terrorist financing risks as well as complex proliferation financing and sanctions evasions schemes. We have provided elements for law enforcement agencies to strengthen their toolkit.  

Combatting illicit finance is a global challenge, and it requires a global solution. Through our peer evaluation process, we ensure effective implementation of all of these defences. The goal is to help jurisdictions in identifying their strengths and weaknesses and to support them in effectively implementing proportionate and risk-based measures and developing adequate tools to combat illicit finance. We are only as strong as our weakest link, which is why we have launched a project to assist low-capacity countries in addressing the challenges they face in implementing anti-money laundering and combatting terrorism financing standards. 

The world is changing rapidly. As criminals and terrorists sprint to exploit emerging vulnerabilities in the global financial system, only through collective action can we outpace criminal networks and safeguard global prosperity.