The FATF measures the effectiveness of a country’s efforts to combat money laundering and terrorist financing through a process known as mutual evaluation. This process involves peer reviews, where experts from other member countries assess the technical compliance and the effectiveness of a country’s anti-money laundering and counter-terrorist financing (AML/CTF) framework. The FATF has developed a methodology that identifies 11 key areas, or immediate outcomes, that an effective AML/CTF system should achieve, and uses them as the basis for the mutual evaluation. The FATF publishes the mutual evaluation reports, which provide an in-depth analysis of the strengths and weaknesses of each country’s AML/CTF regime, as well as recommendations for improvement.
1: An effective system to combat money laundering and terrorist financing, FATF, February 2013.
2: Report on the State of Effectiveness and Compliance with the FATF Standards, FATF, June 2021.
3: Financial Action Task Force (FATF) | Meaning, Functions, Impact, Finance Strategists, September 2023.
4: FATF Recommendations, FATF, October 2020.
