1. FATF and MONEYVAL
The soft law approach

2. The FATF Financial Action Task Force on Money Laundering
Founded in 1989
36 Members (e.g. USA, 15-pre enlargement EU Member States, The european Commission, China, Japan, Switzerland, Russia)
Mandate to combat money laundering (mandate expanded to incorporate terrorist financing)
Aims:
set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system
monitors countries' progress in implementing the FATF Recommendations
reviews money laundering and terrorist financing techniques and counter-measures
Publication of press releases and reports on high risk countries

3. The FATF How FATF works:
FATF follows the soft law approach, which means that its guidelines are not binding, but encourage voluntary cooperation
Objectives:
Annual self-assessment of each Member State
On-site monitoring not only of Member States, but of all States of importance to the financial system
Publication of lists of non-cooperative countries (“name and shame”-campaign)
Appearing on this list has a very negative impact on the reputation of the financial sector of a country

4. The FATF Aim of applying the standards globally:
FATF supports founding of regional sub-organisations (e.g. Moneyval)
Common standard for on-site country assessment
Support for countries which not yet fulfill the standards
Publication of non cooperative countries and Territories
NCCT-list: currently Iran and North Corea
Countries with deficiencies: currently 9 countries, e.g. Turkey, Syria, Yemen
Special care has to be taken in doing business with offshore financial centers and listed countris
Bilateral contacts to ensure application of standards

5. The FATF
The 40 FATF recommendations on money laundering:
Set of principles to be tailored to a country’s commercial and legal system
General framework (Art. 1-3)
Role of a country’s legal system in the prosecution of money laundering (Art. 4-7)
Role of a country’s financial system in preventing money laundering (Art. 8-29)
Role of regulatory and law enforcement agencies in combatting money laundering (Art )

6. The FATF recommendations
Rec. 3: Countries should criminalize money laundering
On the basis of the Vienna and Palermo Conventions
Apply the crime of money laundering to all serious offences
With a view to include the widest range of predicate offences
Rec. 4: Confiscation and provisional measures
Freezing, seizure or confiscation of laundered property, proceeds from money laundering or terrorist offences and proceeds from or property allocated to financing of terrorism
Property of corresponding value should also be confiscated
Respect for the rights of bona fide third parties
Criminal conviction should not be necessary
Shifting of the burden of proof foreseen in the case of confiscation

7. The FATF recommendations
The recommendations have a strong emphasis on the financial operators
Customer due diligence (“Know your client”) (Rec. 10)
Business contacts with foreign politically exposed persons should be treated with special diligence (Rec. 12)
Risk management and ongoing monitoring
Decisions taken on senior level
Take reasonable measures to establish the source of funds
Reporting of suspicious transactions (Rec. 20)
States have to take measures to protect financial institutions and their employees if they report suspicious transactions
Transparency and beneficial ownership of legal persons and legal arrangements (Rec. 24 and 25)
Legal Persons and legal arrangements may not be misused for hiding the true source of the proceeds

8. Monitoring body of the Council of Europe
MONEYVAL
Monitoring body of the Council of Europe
Evaluation according to FATF procedures of
CoE Members not members of FATF
CoE Members which become FATF members on request
Monitoring of European standards not covered by FATF
Reports on
Features and magnitude of money laundering and the financing of terrorism
Efficiency of measures taken to combat money laundering
Research and review of progress