The Kingdom is a Permanent Member of FATF

The Importance of the Financial Action Task Force

The Kingdom of Saudi Arabia has been a part of the Financial Action Task Force (FATF) since the Financial Workers’ Group (FWG) granted them entry in 2019. The Kingdom is the first Arab country to obtain this membership. This membership was granted in return for the efforts made to take action against money laundering crimes, combat terrorism, and limit the spread of weapons.

If you were unaware of Saudi Arabia’s membership in the task force, Khalaf Bandar Law Firm can explain its importance.

What is the Financial Action Task Force and What Do They Do?

The Financial Action Task Force (FATF) is an intergovernmental organization established in 1989 by the G7 to develop policies to combat money laundering.  The G7 is an informal political and economic forum. This includes some countries such as the United States, France, Germany, Japan, and more. They meet annually to discuss issues such as global economic governance, international security, and artificial intelligence.

In 2001, the FATF mandate expanded to include efforts to combat terrorist financing. The FATF sets international standards and promotes the effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and more. If there are threats to the integrity of the international financial system, the FATF tries to combat them.

It monitors countries’ progress in implementing its recommendations and holds them accountable through a peer review process. The FATF also identifies and responds to new and emerging threats, such as the financing of weapons of mass destruction.

The Results of Joining the FATF

The results of the mutual evaluation conducted by the group during 2017-2018 demonstrated efficiency and effectiveness. The partnership with the Financial Action Task Force (FATF) for the Middle East and North African Countries (MENA-FATF) used precautionary measures and punitive regulations used by the Kingdom’s government.

What Rights Does the Kingdom Have as Part of the FATF?

The Financial Action Task Force is one of the most important international legal entities concerned with financial supervision and the integrity of the international financial system. After the Kingdom’s membership, it now includes 39 permanent member countries.

It is worth noting that this membership gives the Kingdom several rights, including:

• The right to participate in setting general standards and legal measures aimed at protecting the international financial system.
• The right to ensure the effectiveness of national punitive legislation and precautionary measures to address every risk that threatens global financial security.

Contact Khalaf Bandar Law Firm for Help Today

The Kingdom’s membership in the FATF only further cements the importance of following our laws. For businesses, domestic and foreign, looking to find success in Saudi Arabia, it’s important to always maintain compliance and proper record-keeping.

For information on how this affects your business in Saudi Arabia, contact Khalaf Bandar Law Firm today.