The FATF 40 Recommendations

Source- AML TALK

1. Risk-Based Approach: Identify and assess ML and TF risks and apply proportional measures.

2. National Cooperation: Foster coordination among authorities to combat ML and TF effectively.

3. Criminalization of Money Laundering: Criminalize money laundering with effective sanctions.

4. Confiscation and Provisional Measures: Allow freezing and seizing of assets linked to crime.

5. Criminalization of Terrorist Financing: Criminalize terrorist financing, including indirect activities.

6. Financial Sanctions for Terrorism: Implement targeted sanctions against individuals and entities involved in terrorism.

7. Sanctions for Proliferation: Enforce sanctions against those involved in the proliferation of weapons of mass destruction.

8. Non-Profit Organizations: Ensure non-profits are not misused for terrorist financing while protecting their legitimate activities.

9. Financial Institution Secrecy Laws: Ensure secrecy laws do not hinder AML and CTF efforts.

10. Customer Due Diligence: Implement measures to verify customer identities and assess risks.

11. Record-Keeping: Maintain records of transactions and customer identification.

12. Politically Exposed Persons (PEPs): Apply enhanced due diligence for PEPs.

13. Correspondent Banking: Supervise correspondent banking to prevent misuse.

14. Money Transfer Services: Regulate money or value transfer services to avoid misuse.

15. New Technologies: Address risks from new technologies like virtual assets.

16. Wire Transfers: Prevent misuse of wire transfers for financial crimes.

17. Third-Party Reliance: Ensure compliance when relying on third parties for due diligence.

18. Foreign Branches and Subsidiaries: Apply consistent AML and CTF measures across foreign branches.

19. Higher-Risk Countries: Apply enhanced due diligence for higher-risk countries.

20. Suspicious Transaction Reporting: Require reporting of suspicious transactions to financial intelligence units.

Other important Recommendations

21. Confidentiality

22. DNFBPs Customer Due Diligence

23. DNFBPs Other Measures

24. Beneficial Ownership of Legal Persons

25. Beneficial Ownership of Legal Arrangements

26. Regulation of Financial Institutions.

27. Supervisory Powers

28. Regulation of DNFBPs

29. Financial Intelligence Units (FIUs)

30. Law Enforcement Resources

31. Law Enforcement Powers

32. Cash Couriers

33. Statistics

34. Guidance and Feedback

35. Sanctions for Non-Compliance

36. International Conventions

37. Mutual Legal Assistance

38. Freezing and Confiscation Assistance

39. Extradition

40. International Cooperation