AML/CFT Standards

AML/CFT Standards

In today’s global economy, the fight against money laundering and the financing of terrorism (AML/CFT) is more crucial than ever. AML/CFT standards are designed to prevent illegal activities by promoting transparency and accountability in financial transactions. This guide provides an in-depth look at the international standards, methodologies, conventions, and legislative measures shaping the AML/CFT landscape.

FATF Recommendations

At the forefront of setting international AML/CFT standards is the Financial Action Task Force (FATF). The FATF Recommendations, updated in February 2012, serve as the global AML/CFT standard. They are complemented by methodologies for assessing compliance and effectiveness, ensuring that countries and institutions can robustly fight against illicit financial flows. The original 40 Recommendations and the IX Special Recommendations have been periodically refined to address emerging threats and improve implementation.

Council of Europe

The Council of Europe has been instrumental in establishing legal frameworks targeting money laundering and terrorism financing. Key conventions include the CETS No. 141 and CETS No. 198, focusing on the laundering, search, seizure, and confiscation of crime proceeds. Additionally, the conventions aim at bolstering efforts in preventing terrorism and its financing, highlighting the Council’s commitment to a secure financial environment.

European Union Legislation

The European Union (EU) has enacted a series of directives and regulations to safeguard its financial system. Starting with Directive 2005/60/EC and evolving with Directive (EU) 2015/849, the EU’s legislative framework addresses the evolving nature of money laundering and terrorism financing. These directives, alongside regulations on fund transfers and cash controls, underscore the EU’s proactive approach to AML/CFT.

International Conventions

A plethora of UN conventions and protocols tackle various aspects of international crime and terrorism. From the Vienna Convention’s stance against illicit drug trafficking to the conventions aimed at suppressing terrorism financing and enhancing global cooperation, these international agreements are pivotal in the global fight against money laundering and terrorism financing.