The Asia-Pacific Group of the Financial Action Task Force (FATF)

Topic- International Organizations [GS Paper-2]

Context- Asia-Pacific Group, FATF has released an update on the rating of its regional members suggesting that Pakistan had a moderate level of effectiveness on only one out of 11 outcomes.

Key Highlights-

• Recently the Sydney-based regional affiliate, Asia-Pacific Group (APF), of the FATF, has released an update regarding the effectiveness of the countries.
• The Asia-Pacific Group of the Financial Action Task Force (FATF) has rated Pakistan’s level of effectiveness as low on 10 out of 11 international goals on anti-money laundering and combating the financing of terror.
• Under the FATF-APG assessment mechanism, effective ratings on Immediate Outcomes reflect the extent to which a country’s measures are worthwhile.
• The assessment is conducted on the basis of 11 immediate upshot, which represent key goals that are effective on Anti-Money Laundering and Combating the Financing of Terror (AML/CFT) system.
• Among those 11 goals, goal 7 & 8 asks that Money Laundering offences and activities are investigated and offenders are prosecuted and are subject to effective, proportionate and dissuasive sanctions are taken and proceeds and instrumentalities of crime are seized.
• And Goal 9 & 10 requires that terror-financing offences and activities are investigated and persons who finance terrorism are prosecuted and are subject to effective, proportionate and dissuasive sanctions and terrorists, terrorist organisations and terrorist financiers are prevented from raising, moving and using funds and from abusing the non-profit organisations sector.
• The immediate outcome 11 requires that persons and entities entailed in the proliferation of weapons of mass destruction are prevented from raising, moving and using funds, consistent with the relevant United Nations Security Council resolutions.
• The rating of its regional members shows that Pakistan had a moderate level of effectiveness on only one out of 11 outcomes.
• As immediate effects, Pakistan extends international cooperation on appropriate information, financial intelligence, and evidence and facilitates action against criminals and their assets.

FATF – Asia Pacific Group

• The Asia Pacific Group on Money Laundering (APG) is a regional inter-governmental body of FATF.
• Its members are committed to implement international standards against money laundering (AML), the financing of terrorism (CTF) and financing the proliferation of weapons of mass destruction. 
• APG was established in 1997 in Bangkok, Thailand, and currently consists of 41 member jurisdictions in the Asia-Pacific region and a number of observer jurisdictions and international/regional observer organisations. 
• The APG conducts mutual analysis of its members to check if they comply, or to what extent they comply, with their obligations to implement the global anti-money laundering and anti-terrorist financing standards. 
• Some of these reports are conducted jointly with other bodies such as the FATF, the International Monetary Fund, the World Bank and the Group of International Financial Centre Supervisors etc.

Financial Action Task Force (FATF)

• The FATF is an inter-governmental body established at the G7 summit at Paris in 1989.
• Its headquarter is situated at OECD headquarters in Paris.
• The presidential powers of FATF keep changing among its 39 members representing 37 countries and 2 regional organizations every year. 
• The institution works with the objective to determine standards and promote effective implementation of legal, regulatory and operational proceedings to combat money laundering and terrorist financing and other related threats to the integrity of the international financial system.
• The FATF has emerged a series of Recommendations that are recognised as the international standard for combating of money laundering, the financing of terrorism and proliferation of weapons of mass destruction.
• The recommendations form the basis for a co-ordinated response to these threats to the integrity of the financial system and help ensure a level playing field.
• The FATF also asume the reviews of each member on an ongoing issue to assess the implementation of its recommendations and provides a detailed analysis of each country’s system for preventing criminal abuse of the financial system.

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