Analysis of the Role of the Financial Action Task Force (FATF) as an Effort to Combat Money Laundering

Abstract

Money laundering is the biggest obstacle to maintaining an effective international financial system. Money laundering is particularly insidious as it provides opportunities for criminals to launder or legitimize the proceeds of crime and reinvest the laundered funds into the activities of the perpetrators. It is also a transnational crime because it involves illegal activities that cross national borders, exploit the vulnerabilities of the global financial system, and involve complex international networks. Globally, it can cause significant harm to the economy by undermining national economic operations and encouraging weak economic policies. As a result, financial markets suffer damage as well as reduced public confidence in the financial system. When financial markets become less stable, the impact on economic growth rates decreases. To reduce the potential for money laundering, the government needs to use financial security intelligence and regulation. To improve financial security and reduce opportunities for illicit money laundering, countries would benefit from an understanding of how the implementation of Financial Action Task Force (FATF) Recommendations and their regulatory affiliations affect money laundering risks. This journal aims to analyze the role of the Financial Action Task Force (FATF) in countering money laundering using the literature study research method. Through this approach, this journal collects data from various literature sources, such as journal articles, reports, and policy documents relevant to the role of the FATF in countering money laundering. The literature study research method is used to identify and analyze relevant information related to the role of the FATF, the activities carried out, the approach taken, and its impact in countering money laundering. This research is expected to provide a deeper understanding of the role of the FATF and its contribution to countering money laundering at the global level.