The FATF Is Loading the Gun

On paper, the Financial Action Task Force (FATF) was created more than 30 years ago by G7 countries to fight organized criminal and narcotic financial flows. The intergovernmental organization describes itself as a “dynamic contributor to peace and security” and issues recommendations that most countries transpose into national laws.

In practice, it’s a totally different story than just laudable intentions with limited effects on society. The FATF can decide to arbitrarily place jurisdictions on gray and black lists, which has the effect of putting certain countries under immense financial pressures or even cutting them off from the global financial system almost entirely. The root of all existing bureaucracy in the finance industry these days is the fruit of dozens of standards and guidelines published by the FATF that are updated on a regular basis. The FATF even went as far as to publish recommendations for counter-terrorist financing rules that have been interpreted and implemented by national governments and banks in a way which has delayed aid and put NGO staff at greater security risk in some countries. The FATF will always talk about how drug dealers and cybercriminals are misusing the financial system to serve their ends, but never will you hear any serious questioning on loss of financial privacy, financial exclusion and the administrative costs their standards impose to all members of society.

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