Role of FATF in spearheading AML and CFT
| Date | 13 June 2020 |
| Published date | 13 June 2020 |
| DOI | https://doi.org/10.1108/JMLC-01-2020-0010 |
| Pages | 77-90 |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Firas Murrar,Khaled Barakat |
Role of FATF in spearheading
AML and CFT
Firas Murrar
Department of Public Administration, Faculty of Economics and Political Science,
Cairo University, Giza, Egypt, and
Khaled Barakat
Department of Public Administration, Faculty of Economics and Political Science,
Cairo University, Giza, Egypt
Abstract
Purpose –This study aims to define the role of the Financial Action Task Force (FATF) and its Style
Regional Bodies (FSRBs)that combat money laundering (ML) and terrorist financing (TF) by measuring how
well some Arab countries have complied with FATF’s“Forty Recommendations”with respect to the
regulatoryframework.
Design/methodology/approach –This study combines the comparativeanalysis methodology with a
descriptive analytical approach to compare three member countries of the Middle East and North Africa
Financial ActionTask Force (MENAFATF). It uses secondary data sources,namely, theoretical literature on
the subject and FATFreports on mutual evaluation reports (MERs).
Findings –This study examinedthe variations in compliance with FATF standardsamong three member
countries of MENAFATF:Bahrain, Morocco and Jordan. While Bahrain has almost completely fulfilled these
standards, Moroccoand Jordan have only partially fulfilled them. These variationsin compliance are mainly
attributed to the uneven level of readiness in the countries’commitment to the legislative and regulatory
requirementsbefore the process of mutual evaluation.
Originality/value –Researchers can find several studieson the role of FATF and FSRBs in combating
ML and TF. However, no studies have focussed on the application levels of FATF standards, which are
relevant to the regulatory frameworks of member countries. This study makes a unique and vital
contribution,as it demonstrates the effectiveness of applying the FATF standards.
Keywords Forty recommendations, Regulatory framework, Anti-money laundering,
Counter terrorism, Finance, Financial action task force (FATF)
Paper type Research paper
1. Introduction
The Financial Action Task Force (FATF) is the first intergovernmental organisation that
operates at an international level to sanction and promote the effective implementation of
standards related to anti-moneylaundering (AML) and countering terrorist financing(CFT).
These standards are designedto minimise threats to the integrity of financial systems at the
national, regionaland international levels (Elsobki, 2015, p. 196).
Nine regional counterparts of the FATF, known as the FATF Style Regional Bodies
(FSRBs), were established in nine different regions around the world to ensure the
implementation of FATF standards concerning AML and CFT. The regional groups have
initiated extensive work to induce various countries to implement FATF standards
pertaining to AML and CFT measureswithin areas falling under their purview.
In the Middle East and North Africa (MENA) region, the MENA Financial Action Task
Force (MENAFATF) was established in 2004 in the Kingdom of Bahrain. Its purpose is to
Role of FATF
77
Received30 January 2020
Revised1 March 2020
20March 2020
30April 2020
Accepted17 May 2020
Journalof Money Laundering
Control
Vol.24 No. 1, 2021
pp. 77-90
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-01-2020-0010
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