International AML/CTF Standards and Frameworks
The architecture of the global regime
The Financial Action Task Force (FATF) sets the international standards - the Forty Recommendations - which are not treaties but are implemented through national law and peer assessment. Candidates must know the structure: the Recommendations cover AML/CTF policy coordination, money laundering and confiscation, terrorist financing and proliferation financing, preventive measures, transparency of beneficial ownership, powers of authorities, and international cooperation.
Key concepts to master: mutual evaluations (peer review with a published report and ratings), the grey list (jurisdictions under increased monitoring) and black list (high-risk jurisdictions subject to a call for action), and FATF-style regional bodies (FSRBs) that assess members against the same methodology. Know the risk-based approach as the organising principle - institutions are expected to allocate resources proportionate to risk.
Understand the role of other bodies: the Basel Committee on banking supervision, the Egmont Group for financial intelligence unit cooperation, the Wolfsberg Group for private-sector guidance, and the UN conventions (Vienna, Palermo, Terrorist Financing) that underpin criminalisation.
Traps and rule of thumb
Common traps: confusing the FATF (standard-setter) with the IMF or World Bank (assessment and capacity-building); assuming FATF Recommendations are directly binding on institutions (they bind through national law); and mixing up grey versus black list consequences.
Rule of thumb: FATF writes the standard, national law makes it enforceable, supervisors examine compliance, and FIUs receive and disseminate intelligence.
Worked example: A question asks which body publishes mutual evaluation reports on a country's AML regime. The answer is FATF (or the relevant FSRB), not the Egmont Group, which coordinates FIUs.