What are the FATF recommendations?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
FATF is the inter-governmental body that sets international standards for anti-money-laundering work. Because its recommendations get written into national law, crypto rules in different countries end up resembling one another. Japan's own reforms have been debated with that international direction in mind.
Key points
- An inter-governmental body that writes the global AML standards
- The recommendations are not themselves binding law
- They take effect only once a country legislates them
- Mutual evaluations grade how far each country has got
Definition
The Financial Action Task Force, an inter-governmental body that sets international standards against money laundering and terrorist financing, including how crypto businesses should be treated and what information they should share.
FATF publishes the standard that member countries are expected to meet. For crypto, the direction has been to treat exchange businesses much like financial institutions: register or license them, and require them to identify their customers.
The recommendations are not a treaty and do not apply directly inside a country. They bite only once each government writes them into its own law. Japan's reforms in this area have been argued through with that alignment in view.
FATF also runs mutual evaluations and names jurisdictions judged to be lagging. That gives governments a strong incentive to move, which is why a rule appearing in one country tends to show up elsewhere within a few years.
Watch out for
- · The texts are revised, so check the current versions from FATF and your own regulator
- · A shared standard does not mean identical national requirements or timing