The FATF Recommendations are guidelines that countries must implement to prevent money laundering and terrorist financing. In this article, we will examine FATF Recommendation 2, which urges countries to promote national cooperation and coordination.
This recommendation suggests that countries must establish effective policies for the prevention of money laundering and terrorist financing. It emphasizes that both senior authorities and operational staff should be equipped with tools to cooperate and, if necessary, coordinate with each other.
FATF stresses that these activities should cover collaboration and synchronization between relevant entities to ensure that prevention requirements are compatible with regulations on data protection, privacy, and other similar norms.
FATF expands on this recommendation through an interpretive note, which is divided into four key sections.
First, FATF highlights the importance of establishing appropriate “inter-institutional frameworks” to promote cooperation and coordination. It states that these frameworks can either be overarching, covering prevention policies across sectors, or specific, with targeted inter-agency cooperation in each area of prevention.
Second, regarding these inter-institutional frameworks, FATF recommends that they should be led by more than one authority or by an organization responsible for setting national standards and policies, ensuring cooperation.
In Spain, this body is the Commission for the Prevention of Money Laundering, which, among other functions, is tasked with “leading and promoting activities to prevent the financial system or other economic sectors from being used for money laundering or terrorist financing.”
The third key point FATF emphasizes is the inclusion of relevant entities within these inter-institutional frameworks. FATF lists several authorities, including relevant ministries, law enforcement authorities, Financial Intelligence Units, security and intelligence bodies, tax authorities, and customs authorities, among others.
Looking at the Spanish Commission for the Prevention of Money Laundering, its full membership includes the authorities recommended by FATF.
Finally, FATF underscores the importance of establishing mechanisms that enable cooperation. Specifically, it suggests that it is crucial to establish “measures to clarify the role, information needs, and sources of information for each relevant authority; measures to facilitate the timely flow of information between relevant authorities, and practical mechanisms to support inter-institutional work.”
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