Regulatory Alerts2021-01-01
FATF Methodology for Assessing Technical Compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems
The Financial Action Task Force issued this October 2021 update to standardize the evaluation of member jurisdictions' technical compliance with its anti-money laundering and counter-terrorist financing recommendations alongside the practical effectiveness of their national AML/CFT systems. The framework mandates a dual-component assessment that examines both the legal and institutional foundations of a country and the actual outcomes achieved, while explicitly requiring evaluators to weigh national risk profiles, economic context, and sector materiality. It establishes detailed criteria for monitoring financial institutions, designated non-financial businesses and professions, and virtual asset service providers to ensure consistent global enforcement of risk-based supervisory practices and policy implementation.