The History of Fighting Financial Crime – Including FATF
Historical analysis of FATF’s evolution and impact. A reflective study to derive lessons from the FATF’s formation and development. Will make recommendations on how to adapt its mission for modern threats and integrate SDG goals.
About
The Financial Action Task Force (FATF) is today recognized as a leading global standard-setter for anti-money laundering (AML), counter-terrorism financing (CTF), and counter-proliferation financing (CPF). However, the historical roots, evolution, and policy choices that shaped FATF—and its role within the broader financial crime ecosystem—remain underexplored and, at times, contested.
This Working Group will undertake a deep historical analysis of FATF's creation, mandate, and trajectory. Originally established by the G7 in 1989, FATF’s initial goal was not necessarily the fight against tax havens but rather to address drug money laundering by focusing on countries with large financial centres. Its foundational objective was clear: "Success will provide a decisive contribution to the fight against criminal activities, and, above all, against drug trafficking, and will improve the soundness of the international financial system."
The initiative will consider how FATF evolved from a focused task force to a comprehensive global standard-setting body. The analysis will offer insights into:
The geopolitical and legal rationale for using soft law mechanisms (as opposed to hard UN conventions)
Why FATF succeeded where other G7 task forces did not
The consequences of FATF increasingly distancing itself from addressing predicate crimes directly and focusing almost exclusively on “following the money”
The project will also evaluate how FATF’s structure and mandate might be adapted for today’s broader financial crime challenges. If FATF were to be re-imagined today, it might evolve into either:
A Financial Action Task Force on fighting financial crime, fraud, and money laundering, or
One of multiple task forces operating in parallel—each focused on different types of serious financial crime.
Key Themes and Recommendations to Be Explored:
Fairness and Threat Assessments in Country Evaluations:
Modern FATF evaluations could improve by integrating more objective and forward-looking threat assessments.Aligning FATF Objectives with the UN SDGs (e.g. SDG 16):
A more explicit link to development goals could enhance global legitimacy and effectiveness.Strengthening Independence and Expertise in Evaluations:
The project will assess whether more formalised independent evaluation structures and enhanced expertise could boost credibility and impact.
Key Deliverable:
A comprehensive research paper that reflects on lessons from the past 35 years of FATF and global AML evolution—offering strategic recommendations for reform or complementary institutional innovation.