FATF Methodology for assessing compliance with the FATF Recommendations and the effectiveness of AML/CFT systems

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June 2023 Updates

As amended June 2023.

The FATF conducts mutual evaluations of its members’ levels of implementation of the FATF Recommendations on an ongoing basis. These are peer reviews, where members from different countries assess another country. The FATF Methodology for assessing compliance with the FATF Recommendations and the effectiveness of AML/CFT systems sets out the evaluation process.  

Assessments focus on two areas, effectiveness and technical compliance.  

  • The emphasis of any assessment is on effectiveness.  A country must demonstrate that, in the context of the risks it is exposed to, it has an effective framework to protect the financial system from abuse.   The assessment team will look at 11 key areas, or immediate outcomes, to determine the level of effectiveness of a country's efforts.  
  • The assessment also looks at whether a country has met all the technical requirements of each of the 40 FATF Recommendations in its laws, regulations and other legal instruments to combat money laundering, and the financing of terrorism and proliferation.  

A mutual evaluation report provides an in-depth description and analysis of a country’s system for preventing criminal abuse of the financial system as well as focused recommendations to the country to further strengthen its system.  

The Methodology will be used by the FATF, the FATF-Style Regional Bodies (FSRBs) and other assessment bodies such as the IMF and the World Bank.   The Methodology was adopted on 22 February 2013, and regularly updated;  (see also 'Information on updates made to the FATF Methodology').

Methodology 2013

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Related Content: 

  • Consolidated Processes and Procedures for Mutual Evaluations and Follow-Up Universal Procedures The set of core elements that apply to all anti-money laundering and counter-terrorist financing assessments, in accordance with the FATF 2013 Methodology. These procedures were last revised in September 2022.
  • Procedures for the FATF Fourth Round of AML/CFT Mutual Evaluations This document sets out the procedures that are the basis for the fourth round of mutual evaluations which involves two inter-related components for technical compliance and effectiveness. Adopted in 2013, these Procedures were last amended in February 2023.
  • Mutual Evaluations What is involved in a mutual evaluation? A simple explanation of the various stages and parties involved in the assessment of the effectiveness of a country's measures to combat money laundering and the financing of terrorism and proliferation.
  • Consolidated assessment ratings An up-to-date overview of the ratings on both effectiveness and technical compliance for all countries assessed against the 2012 FATF Recommendations and using the 2013 Assessment Methodology.

An effective system to combat money laundering and terrorist financing

What is the objective of anti-money laundering, counter terrorist and counter proliferation financing efforts?  Find out more about the various components that governments must implement, and that the FATF will assess against.

Information on updates to the Methodology

 FATF Plenary Type of amendments Sections subject to amendments
October 2015
 Addition of footnote to clarify the interpretation of criterion 29.3. 

R.29 – page 75

To add a footnote to guide the application of the methodology for criterion 29.3 on the FIU’s power to obtain additional information.

February 2016 Revision of R. 5 and IO.9. 

R.5 and IO.9 – pages 30-31 and 115-116

To align the methodology for R.5 and IO.9 with the revised Interpretive Note to Recommendation 5 relating to UNSCR 2178.

February 2016 Addition of footnote on the terminology of different types of ML activity to IO.7. IO.7 – pages 110-112

To add a footnote clarifying the terminology of different types of ML activity as referred to in the Methodology for IO.7 (core issue 7.3).

October 2016 Revision of R.8 and IO. 10 

R.8 and IO.10 and Glossary - pages 39-41 and 117-119

To align the methodology for R.8 and IO.10 with the revised Recommendation 8 and interpretive Note to Recommendation 8.

October 2016 Addition of footnote on tax and confiscation to IO.8 

IO.8 - pages 113-114

To add a footnote about how tax confiscation figures should be taken into account for the assessment of effectiveness under IO.8 (core issue 8.2)

February 2017 Revision of R.5 and IO.9 

R.5 and IO.9 - pages 30-31 and 115-116

To align the methodology for R.5 and IO.9 with the revised Interpretive Note to Recommendation 5 and the Glossary term "funds or other assets".

November 2017 Revision to Recommendation 7 

R.7 – page 36-38

To amend R.7 to mirror amendments to the FATF Standards (INR.7 and the Glossary) made in June 2017 which reflected changes to the UN Security Council Resolutions on proliferation financing since the FATF standards were issued in February 2012.

November 2017 Revision of footnote to Recommendation 25 R.25 – page 69-70

To amend footnote 55 to the methodology for R.25 to provide guidance on how to identify other legal arrangements that fall within the scope of R.25 and IO.5 because of characteristics and features which are similar to express trusts and could be particularly vulnerable from a ML/TF perspective, and to ensure a consistent approach across mutual evaluations.

February 2018 Revision of Recommendations 18 and 21 

R.18 – page 58 and R 21 - page 62

To amend R.18 and R.21 to reflect the November 2017 amendments to the FATF Standards (INR.18 and R.21) which clarified the requirements on sharing of information related to unusual or suspicious transactions within financial groups, and the interaction of these requirements with tipping-off provisions.

October 2018  Revision of Recommendation 2 and Immediate Outcome 1 

R.2 – page 26 and IO.1 – pages 94 and 95

To reflect the February 2018 amendments to the FATF Standards (R.2) which clarify the need for compatability of AML/CFT requirements and data protection and privacy rules and build on the conclusions of RTMG’s report on inter-agency CT/CFT information sharing.

October 2018  Revisions to Chapter 1 and addition of footnotes in Chapters 5 and 6 related to Immediate Outcomes 3 and 4 

Chapter 1 – page 132,
Chapter 5 – page 138, and Chapter 6 – page 139

Addition of footnotes to clarify the expectations when assessing effectiveness under IO.3 and IO.4, taking into consideration the risk, context and materiality of the country being assessed.

February 2019 Revisions to Immediate Outcomes 3 and 4 Addition of notes to assessors and footnotes 

• Outcome 3 – pages 99 to100
• Outcome 4 – pages 103-104
Addition of notes to assessors and footnotes to provide further guidance on how to assess the relative importance of the different sectors of financial institutions and DNFBPs.

October 2019 Revisions to Recommendation 15 and Immediate Outcomes 1 - 4, and 6 – 11 to reflect amendments to the FATF Standards (R.15, INR.15 and Glossary terms) incorporating virtual assets and virtual asset service providers 

 • Introduction paragraph 15 – page 8
New paragraph and footnote to provide guidance on how to assess requirements relating to virtual assets and virtual asset service providers.
• Introduction paragraphs 21, 22, 24 and diagram at paragraph 44 – pages 9, 10 and 18
Addition of references to virtual assets and virtual asset service providers.
• Recommendation 15, Note to assessors and criteria 15.3 – 15.11 – pages 54-57
• Immediate Outcomes 3 and 4 – pages 105 - 112
Addition of further guidance on how to assess requirements relating to virtual assets and virtual asset service providers and new criteria to reflect the amendments to the FATF Standards (R.15, INR.15 and Glossary terms “virtual assets” and “virtual asset service provider”).
• Immediate Outcomes 1, 2, 3, 4, 6, 7, 8, 9, 10 and 11 – pages 97, 102, 105-108, 109-112, 116, 119, 122, 124, 126-127, and 129-130.
Addition of reference to R.15, or elements of R.15, as being related to the outcome and reference to VASPs as needed.

November 2020 Clarification to Recommendation 17 

Addition of footnote to clarify that R.17 does not apply to third party outsourcing and agency relationships, as noted in INR.17.

October 2021

 

June 2023

 

Revision of the Glossary definition of ‘designated categories of offences’

 

 

Addition of footnote to clarify the requirements of criterion 36.2.

 

 

Revision of the Glossary definition of ‘designated categories of offences’ to clarify the types of offences which fall within the ‘environmental crime’ category.

 

R.36 – page 88

To add a footnote clarifying the distinction between FATF and UNODC IRM assessments.

 

Translations

The following are unofficial, working translations of the FATF Methodology, that are provided for information only. 

 

Russian Translation of FATF Methodology

Russian translation provided by MUCMCFM

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MUMCFM-Russsian-Methodology.pdf
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