What is the primary purpose of the Financial Action Task Force (FATF)?

What is the primary purpose of the Financial Action Task Force (FATF)?

• A. To regulate banking systems internationally
• B. To promote policies to combat money laundering and terrorist financing
• C. To enforce trade laws globally
• D. To standardize taxation policies among member countries

Answer: (B)

The primary purpose of the Financial Action Task Force (FATF) is to promote policies that combat money laundering and terrorist financing. Established in 1989, FATF plays a critical role in setting international standards and encouraging countries to implement effective measures to prevent these illicit activities. By developing recommendations and conducting assessments of compliance, FATF helps ensure that countries promote and adhere to robust financial integrity, thereby enhancing global efforts to tackle financial crime.

This focus on combating money laundering and terrorist financing is fundamental, as these activities can undermine financial systems, foster corruption, and facilitate organized crime. Through its work, FATF not only fosters cooperation among member countries but also enhances the global financial system's resilience against threats posed by financial crimes.