Natural Resources and Violent Conflict - WaterWiki.net

184 winer and rouleand international levels, to combat money laundering. The FATF is apolicymaking body that works to generate the necessary political will tobring about national legislative and regulatory reforms to combat moneylaundering. The FATF monitors members’ progress in implementinganti–money laundering measures, reviews money laundering techniquesand countermeasures, and promotes the adoption and implementationof anti–money laundering measures globally. In performing theseactivities, the FATF collaborates with other international bodiesinvolved in combating money laundering. It does not have a tightlydefined constitution or an unlimited life span. It reviews its missionevery five years.The FATF was established during the French presidency of the G-7in 1989, in response to recognition of the threat that drug money launderingposed for their banking and financial systems. The FATF’s initialmandate was to examine the methods used to launder drug proceedsand to develop recommendations for combating them. The 40recommendations, developed during the first year, became the basisfor what was then an innovative implementation system. The FATF,which had a tiny secretariat and was not a chartered internationalorganization, but only a voluntary association, initiated a system forself- and mutual assessment. Under this system, each member wouldfirst assess its own compliance with the 40 recommendations. Thenother members would visit the jurisdiction, question the authorities,and reach their independent determination of where the jurisdictionwas failing to meet the recommended standards. This approach includedseveral innovations. First was the notion that technical expertswould develop standards that, over time, would bind their countries incompliance even without entering into a formally binding internationalagreement. Second was the concept of mutual evaluation, inwhich a country would submit to peer review as a means of improvingits domestic capabilities.The 40 FATF recommendations can be summarized as five basicobligations:• Criminalize the laundering of the proceeds of serious crimes andenact laws to seize and confiscate them• Oblige financial institutions to identify all clients, including allbeneficial owners of financial property, and to keep appropriate records• Require financial institutions to report suspicious transactionsto competent national authorities and to implement a comprehensiverange of internal control measures• Put into place adequate systems for the control and supervisionof financial institutions