The fight against money laundering and terrorist finance
Interview with Elisa de Anda Madrazo, president, Financial Action Task Force
Robust measures in combating illicit finance are vital for countries to achieve their macroeconomic objectives and to safeguard integrity, stability and growth
Why is fighting money laundering and terrorist finance important to securing strong, sustainable, balanced and inclusive economic growth and people’s well-being?
Money laundering and terrorist financing are significant global threats, ruining lives and draining billions of dollars from societies every year. Transnational organised crime and terrorism are on the rise, with criminals exploiting technological advances to build vast networks spanning multiple areas of crime. Without effective tools to combat these illicit activities and stop crime from being profitable, they will continue to cause harm.
Financial crimes are not victimless. Fraud wrecks lives. Ransomware and tax evasion divert critical resources from essential services, such as health care, education and critical infrastructure – hitting the poorest the hardest. Money laundering empowers criminal organisations and enables other serious crimes, including human trafficking, environmental destruction and corruption. Illicit finance also undermines the integrity and stability of the international and domestic financial systems, posing a major barrier to sustainable economic and social development.
Combating illicit finance is crucial for reducing crime by taking out its infrastructure and enablers. A robust anti-money laundering and counter-terrorist financing regime strengthens and builds trust in the rule of law, promotes economic stability and encourages investment.
Effective AML/CFT frameworks are vital for countries to achieve their macroeconomic objectives and to safeguard integrity, stability and growth.
They also foster more inclusive and prosperous societies, enabling more people and societies to benefit from economic opportunities, while promoting long-term well-being.
What are your priorities and vision for the Financial Action Task Force?
The FATF sets the global standard for AML/CFT. Today, 35 years after its creation, more than 200 countries and jurisdictions have committed to implement our standards. But our work is far from over: we need to make sure our measures are effectively contributing to deprive criminals of their ill-gotten gains.
During the next two years, the FATF will prioritise inclusiveness, diversity and transparency. A key focus is promoting financial inclusion, as limited access to formal financial services pushes individuals and businesses towards cash-based and unregulated channels, which increases money laundering and terrorist-financing risks. To address this, the FATF is currently revising its standards and guidance to advance financial inclusion through risk-based and proportionate AML/CFT measures. We aim to provide the tools for a tailored approach that reduces the unintended consequences of indiscriminate derisking. Recognising the real-world impact of these issues, the FATF is committed to promoting a balance between financial integrity and accessibility. This effort will be complemented by comprehensive training programmes for both countries and assessors, to help stakeholders effectively implement and evaluate the risk-based approach.
The successful start of the next round of countries’ assessments is a top priority for the FATF. This new round will be notably shorter, with a sharp focus on country-specific risks and context, and on adequate measures to eradicate financial crimes. The FATF’s assessment processes have been proven very successful in identifying shortcomings in countries’ financial crime prevention regimes and helping them to close these gaps. For this new round, we have made the procedures even more risk based. The revised prioritisation threshold for FATF’s compliance process, commonly known as the ‘grey list’, now reflects actual risks better, reducing the burden on the least developed countries, while allowing for greater flexibility in handling diverse contexts.
Our focus on low-capacity countries is another key element in strengthening cohesion within the Global Network, which includes the FATF, the nine FATF-style regional bodies and their respective members. The Global Network is a unique partnership that thrives on diversity and collaboration, both key to our common success. To enhance transparency and inclusiveness, we will invite more participation from under-represented regions, particularly the Caribbean and Africa. We will work to support the effective implementation of the FATF Standards, particularly the recently revised standards on asset recovery, beneficial ownership and virtual assets, which provide more tools to trace and confiscate ill-gotten assets. And we will continue to deepen and update our understanding of terrorist financing and proliferation risks.
Throughout, the FATF will strengthen its engagement with key stakeholders, the Global Network, private sector and civil society, because we cannot afford to leave safe havens for crime and terrorism.
How can the G20 leaders at their Rio de Janeiro Summit best help?
G20 leaders at Rio should reiterate their commitment and support to enhanced efforts to eradicate illicit finance. And since the global financial system is only as strong as its weakest link, honouring the commitments made by the FATF ministers when they met in April 2024 will also help ensure comprehensive support for vulnerable countries, reinforcing a unified and secure global financial system.
