Financial Action Task Force (FATF)

Someone once said that imitation is the sincerest form of flattery, but when it comes to imitating financial systems by money laundering, and funding terrorists activities, flattery is the not a word that comes close to describing the turmoil that develops from those activities.

The mounting concern over money laundering steadily progressed to an out of control crescendo by 1989 so the G-7 Summit, which was held in Paris, decided to do something about it. The Financial Action Task Force (FATF) was established at that meeting and it immediately focused on money laundering around the world.

The Financial Action Task Force is given the responsibility of analyzing money laundering trends and techniques, and studying actions that had already been taken by individual nations as well as actions taken on the international level.

After careful consideration this group identified measures that had to be addressed in order to eliminate the art of money laundering or at the very least make it a monumental task that was not worth the effort. In 1990, which was less than one year after the initial meeting, the FATF issued a set of Forty Recommendations, which were designed as a comprehensive plan to fight money laundering at all levels.

In 2001, the FATF developed standards that targeted people or organizations that funded terrorist groups. Those standards were explained in Eight Special Recommendations. The Financial Action Task Force made progress in the fight. Money laundering as well as terrorist funding decreased when guidelines were established, but the evolution of cleaning dirty money continued.

Techniques to get around established guidelines got more sophisticated so the FATF had to revise their standards. In 2003 and 2004 Nine Special Recommendations were added and incorporated in the first forty in order to strengthen the international resolve and the guidelines that combat money laundering and terrorist funding. The 40 + 9 Recommendations are still in force.

The original 16-member Task Force increased by 12 members in 1992 and in 2000 membership jumped to 31 members. In 2003 the FATF had 33 members, and in 2007 the group expanded its membership to 36, which is the current membership count. The list of members plus the two regional organizations that participate is a familiar group.

FATF members include Italy, France, Iceland, Ireland, Russia, Portugal, Argentina, Brazil, Finland, Germany Greece, Belgium, China, Canada, Austria, Australia, Denmark, and Hong Kong. Mexico, the Kingdom of the Netherlands, Norway, New Zealand, Korea, Sweden, Switzerland, Turkey, Spain, South Africa, India, Japan, Singapore and Luxemburg are members as well. The European Commission and the Gulf Co-operation Council are also members.

It is true that the Financial Action Task Force has made an impact on money laundering and terrorist funding. It's a difficult task to launder money these days. The FATF periodically reviews its mission and makes adjustments that offset the adjustments made by the money launderers in order to maintain control, but that control is vacillating constantly.

What the FATF also shows us is that the war on drugs is being used to justify the FATF, with the corollary being that money generated by drug sales goes to support "terrorist" activities. There is nothing much in current human international relations more profoundly dishonest than this causal chain.

Drugs should be ingested or not at the behest of the individual involved and the state has no business deciding what the individual can and cannot take into his or her body. The so-called war on terror is as phony as the war on drugs, with little evidence that there are large segments of the Islamic population mulling suicide attacks on Western civilization. Most of the attacks come as a result of Western incursions into Islamic countries and culture.

What then is the FATF? It is a made-up solution to a phony crisis. The only thing that the FATF has done effectively is further strip away secrecy when it comes to moving money around the world. Those who believe this is a net positive probably believe that George Orwell's description of a fascist future as a boot stamping repeatedly on the human face is social good as well.