The FATF's mutual evaluation of Australia
What is the FATF?
The Financial Action Task Force on Money Laundering (FATF) is an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing. The FATF was established in 1989 by the G7 and Australia was a founding member. The FATF currently has 33 members, of which two are regional organisations.
The FATF Recommendations on money laundering and terrorist financing
In 1990 the FATF first issued Forty Recommendations on money laundering. The Forty Recommendations have since been revised twice, in 1996 and most recently in 2003. The 2003 revised Forty Recommendations are recognised as the international anti-money laundering (AML) standard and extended the scope of recommended AML measures to a wider range of industries, including businesses and professions outside the financial sector.
Following the terrorist attacks on the United States of 11 September 2001 , the FATF issued eight Special Recommendations on Terrorist Financing. A ninth Special Recommendation was added in 2004. The Special Recommendations build on the measures outlined in the Forty Recommendations and are the recognised international counter-terrorist financing (CTF) standard.
FATF mutual evaluation of Australia
As a member of the Financial Action Task Force on Money Laundering (FATF), Australia has agreed to undergo periodic assessments of its anti-money laundering and counter-terrorism financing (AML/CTF) system against the international standards issued by the FATF.
During 2005, the FATF conducted a mutual evaluation of Australia’s AML/CTF system. This was Australia’s third evaluation by the FATF and the first based on the FATF’s current Recommendations, which were significantly revised and strengthened in 2003.
Australia was one of the first countries to be evaluated against the revised FATF Recommendations, which the FATF itself has recognised set tough new standards for countries.
The FATF published a report on its evaluation of Australia’s AML/CTF system on 17 October 2005.
The FATF’s report highlighted both the strengths of Australia’s AML/CTF system and the areas requiring development, which are consistent with those identified by the Government as part of the review of Australia’s AML/CTF system. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 enhances Australia’s AML/CTF system in key areas identified in the FATF findings.