The Middle East and North Africa Financial Action Task Force (MENAFATF) is a regional institution similar to the Financial Action Task Force (FATF) for nations in the Middle East and North Africa. It is a voluntary and cooperative association that was founded by an agreement between the governments of 14 Arab countries. Following that, many more nations from the area joined the organization, increasing the total number of members to 21. To fulfill its goals, the Group specifies its work, systems, regulations, and processes and collaborates with other international entities, especially the FATF Group.
Members cooperate in approving and executing FATF recommendations and anti-terrorism treaties, and U.N. Security Council resolutions through the organization. Members want to learn about and share their experiences with money laundering and terrorism funding concerns that are relevant to their location. Members of the MENAFATF strive to pursue anti-terrorism financing measures that are compatible with their nations' cultural values, constitutional frameworks, and legal systems.
Understanding the MENA Region's Unique Financial Challenges
MENA region faces unique financial challenges that require attention:
- Political instability disrupts the business environment and hampers stable financial systems.
- The prevalence of an informal economy makes it difficult to regulate and monitor financial flows effectively.
- Terrorism and terrorist financing pose significant threats that require robust AML/CFT measures and international cooperation.
- Corruption undermines financial integrity and obstructs economic development.
- Cross-border financial crimes exploit weak regulatory frameworks and limited international cooperation.
- Economic diversification is crucial to reduce vulnerability to commodity price fluctuations.
- Financial inclusion barriers push individuals towards informal financial channels, increasing the risks of financial crimes.
- Cybersecurity risks and technological advancements require robust measures to protect financial systems.
- Trade-based money laundering utilizes legitimate trade transactions for illicit funds.
- Economic sanctions and restrictions impact financial systems and cross-border transactions.
Overview Of the MENAFATF
The organization aims to raise awareness about the risks that money laundering and terrorism funding present to countries in the Middle East and North Africa region. On the other hand, this threat may be effectively addressed by cooperation among nations in the MENA region. It also aims to recall the United Nations' efforts to combat money laundering and terrorism funding.
Acknowledging the FATF 40 Recommendations on Combating Money Laundering and Terrorist Financing and Proliferation, as well as any other standards adopted by the Arab States to strengthen the battle against money laundering and terrorism financing and proliferation, and the related U.N. Conventions and U.N. Security Council Resolutions, as the globally accepted international standards in this respect, in addition to any other guidelines issued by the Arab States to strengthen the war against money laundering and terrorism financing and proliferation.
Whereas nations in the MENA region should work together to comply with these requirements to develop an effective system that does not conflict with their culture and values, legal frameworks, or constitutional law.
As a result, the Governments of 14 nations resolved to create MENAFATF as a FATF Style Regional Body (FSRB) in an initial Ministerial Meeting held in Manama, Bahrain, on November 30, 2004. The Kingdom of Bahrain has agreed to host the organization's headquarters.
The MENAFATF is a voluntary and cooperative organization that is apart from any other international body or organization. It was founded by a contract between the nations of its members and is not based on an international convention. To fulfill its goals, it establishes its own activities, laws, rules, and processes and collaborates with other international organizations, most notably the FATF.
Members And Observers Of MENAFATF
MANAFATF Members
- Alberta
- Bahrain
- Djibouti
- Egypt
- Islamic Republic of Mauritania
- Jordan
- Kuwait
- Lebanon
- Libya
- Palestinian Authority
- Qatar
- Republic of Iraq
- Saudi Arabia
- Somalia
- Sudan
- Syria
- Tunisia
- United Arab Emirates
- Morocco
- Oman
- Yemen
MENAFATF Observers
- Asia/Pacific Group on Money Laundering (APG)
- Co-operation Council for the Arab States of the Gulf (GCC)
- Egmont Group of Financial Intelligence Units (Egmont Group)
- Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG)
- Financial Action Task Force (FATF)
- France
- International Monetary Fund
- Spain
- United Kingdom
- United Nations (UN)
- United States
- World Bank
- World Customs Organization (WCO)
The Role and Objectives of MENAFATF in Combating Financial Crimes
Setting Standards
The primary role of the is to develop and promote effective measures to combat money laundering, terrorist financing, and other related financial crimes. MENA FATF sets standards and recommendations that member countries should adhere to in order to establish robust anti-money laundering and countering the financing of terrorism (AML/CFT) systems.
Promoting Regional Cooperation
MENAFATF facilitates regional cooperation among its member countries to address common challenges and combat financial crimes effectively. It encourages the sharing of information, intelligence, and best practices, as well as the coordination of efforts to prevent and detect money laundering and terrorist financing activities across borders.
Conducting Mutual Evaluations
MENAFATF conducts mutual evaluations to assess the effectiveness of its member countries' AML/CFT systems. These evaluations provide an in-depth review of a country's legal and institutional framework, implementation of preventive measures, international cooperation, and overall compliance with international standards. The findings from these evaluations help countries identify areas for improvement and take necessary actions to enhance their AML/CFT efforts.
Providing Technical Assistance and Capacity Building
MENAFATF supports its member countries by providing technical assistance, capacity-building programs, and training. This assistance aims to enhance the understanding of AML/CFT issues, develop the necessary skills and knowledge among regulators, law enforcement agencies, and financial institutions, and strengthen the overall capacity to combat financial crimes effectively.
Facilitating Information Exchange
MENAFATF promotes the exchange of information and intelligence related to money laundering, terrorist financing, and other financial crimes among its member countries. It encourages the establishment of effective information-sharing mechanisms and facilitates cooperation between financial intelligence units (FIUs) and other relevant authorities in the region.
Monitoring Compliance
MENAFATF monitors the compliance of its member countries with its standards and recommendations. It assesses whether countries have implemented adequate measures to address the risks of money laundering and terrorist financing and effectively enforce relevant laws and regulations. Regular monitoring ensures ongoing compliance and encourages continuous improvement in the region's AML/CFT efforts.
Addressing Emerging Risks
MENAFATF stays updated on emerging risks and challenges in the field of financial crimes, including technological advancements and new methods used by criminals. It provides guidance and recommendations to member countries on addressing these risks and adapting their AML/CFT frameworks to effectively combat evolving threats.
Engaging Stakeholders
MENAFATF engages with various stakeholders involved in the fight against financial crimes, including governments, financial institutions, law enforcement agencies, and international organizations. It promotes dialogue, collaboration, and partnerships to foster a comprehensive and coordinated approach to combating money laundering, terrorist financing, and other financial crimes.
