Mutual Evaluations

FATF mutual evaluations are in-depth country reports analysing the implementation and effectiveness of measures to combat money laundering, terrorist and proliferation financing. The reports are peer reviews, where members from different countries assess another country. Mutual evaluations provide an in-depth description and analysis of a country’s anti-money laundering and counter-terrorist financing system, as well as focused recommendations to further strengthen its system.

During a mutual evaluation, the assessed country must demonstrate that it has an effective framework to protect the financial system from abuse.

Mutual Evaluations have two main components, effectiveness and technical compliance.

The most important part of a mutual evaluation is a country’s effectiveness ratings. This is the focus of an on-site visit by a team of experts to the assessed country. During this visit, the assessment team will require evidence that demonstrates that the assessed country’s measures are working and delivering the right results. What is expected from a country differs, depending on the money laundering, terrorist financing and other risks it is exposed to.
The assessment of technical compliance is also an important part of a mutual evaluation. The assessed country must provide information on the laws, regulations and any other legal instruments it has in place to combat money laundering and the financing of terrorism and proliferation.

The mutual evaluation report is an assessment of a country’s measures to combat money laundering and the financing of terrorism and proliferation of weapons of mass destruction. This includes an assessment of a country’s actions to address the risks emanating from designated terrorists or terrorist organisations. The mutual evaluation report is without prejudice to the status or justification that led to the designation of an entity as a terrorist or terrorist group or organisation.

The FATF conducts peer reviews of each member on an ongoing basis to assess levels of implementation of the FATF Recommendations, providing an in-depth description and analysis of each country’s system for preventing criminal abuse of the financial system.

Stages in the mutual evaluation process

A complete mutual evaluation takes up to 18 months. The stages in this process are as follows:

Assessor training. The FATF organises regular training to train experienced national experts in the FATF Recommendations and FATF Assessment Methodology. FATF does not restrict itself to assessors from FATF countries. All countries that are part of the Global Network of FATF, as well as FATF-style regional bodies and FATF observer organisations, can provide experts for assessments.
Country training. The FATF organises training for representatives of the assessed country so that they know what they will need to provide and demonstrate during the process.
Selection of assessors. The FATF selects the members of the assessment team from the pool of trained assessors. The composition of the team depends on the required expertise for an assessment, including language and legal background. Assessors are appointed by the President. Assessed countries do not have a say in the selection.
Technical compliance. The country provides information about its laws and regulations. The assessors analyse this information, checking if all the required laws and regulations, as required by the FATF Recommendations, are in place. This analysis takes approximately 4 months, sometimes longer if translations or additional documents are required. Following the analysis, assessors produce a draft report, with technical compliance ratings for all 40 Recommendations.
Scoping. In preparation for the effectiveness assessment and the on-site visit, assessors undertake a preliminary scoping exercise to determine the areas of focus of the on-site visit. Various elements are considered including the type of threats, vulnerabilities and risks, the type of economy, the size type of financial and other sectors, political stability and commitment, the rule of law, and the level of maturity of the country's system to combat money laundering and the financing of terrorism and proliferation.
On-site visit. The country needs to provide information on the effectiveness of its system in all eleven areas that are covered by the FATF Methodology (more information on an effective system to combat money laundering and terrorist financing). The assessors travel to the country for the on-site visit to verify and assess whether the systems in place are effective or not. The information provided prior to the on-site visit on the effectiveness of their system will aid in the discussions.
Report drafting. Immediately following the on-site visit, the assessors finalise the mutual evaluation report with the findings of the effectiveness and technical compliance assessment. The assessed country is given the opportunity to comment on the draft report, and have a face-to-face meeting with the assessors. The report is also reviewed by independent reviewers. However, ultimately, the assessors are the only ones who decide on the text of the report and the final proposed ratings for effectiveness and technical compliance.
Plenary discussion. The assessors present the draft report to the FATF Plenary at one of the three meetings it holds every year. The Plenary will discuss the assessors’ findings and proposed ratings. Consensus among members (except for the assessed country, which has no vote) is required to overrule any of the draft findings and ratings by the assessors.
Final quality review. Following Plenary approval, all countries within the FATF Global Network will review the report for technical quality and consistency before it is published on the website, which is usually two months after Plenary approval.
Follow-up. After adoption, the countries are required to address the shortcomings identified in the report. All countries are subject to post-assessment monitoring. This can include anything from regular reporting of improvements for countries that are already largely compliant and demonstratively committed to addressing the remaining few shortcomings, to issuing a public warning against a country that makes insufficient progress to address key deficiencies.

Key documents in the FATF mutual evaluation process

The FATF Recommendations

The FATF Recommendations are the basis on which all countries should meet the shared objective of tackling money laundering, terrorist financing and the financing of proliferation. The FATF calls upon all countries to effectively implement these measures in their national systems.

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

The FATF Methodology for assessing compliance with the FATF Recommendations and the effectiveness of AML/CFT systems sets out the evaluation process.

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.

The FATF published all the mutual evaluation reports and follow-up reports with a rerating on its website, including for the assessments conducted by its regional partners, the FATF-Style Regional Bodies, the IMF and the World Bank.

Explore the mutual evaluation reports