What is anti money laundering? What is the role of the Financial Action Task Force (FATF)?

What is anti money laundering?

What is the role of the Financial Action Task Force (FATF)?

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Expert Solution

Anti money laundering

Set of laws, policies, regulations and tools to detect, guard and prevent money laundering activities. Money laundering is the practice of generating income through illegal ways such as illegal gambling, robbery, fraud, drug and human trafficking, bribery, corruption, and other global crimes.

Anti money laundering is to assist financial institutions to report suspicious activities to protect the criminal business of the financial institutions that is used to disguise the true ownership of illegal cash. It is the law to prevent and stop money laundering.

Various countries implements the anti money laundering program which includes-

a. Internal policies and procedures to help the business.

b. Appointment of compliance officer.

c. Employee training

d. Reviewing for program testing

Role of Financial Action Task Force came into force in July 1989 by G7 Summit. The main role of FATF os to protect the integrity of the financial system. These are as follows-

1. Setting standards to tackle money laundering, terrorist financing and other global threats.

2. Developing and Implementing measures to eradicate money laundering and other threats to financial institutions.

3. Providing tools and techniques to countries related to crime and terror.

4. Early detection of money laundering and other related activities.

5. Developing policies and standards to counter financing risks.

jeff jeffy answered 1 year ago

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