FATF stands for Financial Action Task Force. It is a consortium of countries tasked with monitoring countries and organizations suspected of fraudulent financial practices, including money laundering and funding terrorist groups. Countries in the FATF can advise due diligence regarding dealings with countries that the FATF has blacklisted. Countries may be ostracized because of public corruption within the government, inadequate financial protocols for preventing fraudulent economic activity, and financing of terrorist activities.
There are about 39 countries and other non-country entities that are part of the FATF. In South America, those countries include Argentina and Brazil. In North America, FATF countries include Canada, the United States, and Mexico. In Europe, Austria, Belgium, Denmark, Finland, Germany, France, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Spain, Portugal, Switzerland, Sweden, and the United Kingdom are included within FATF. The European Commission is a non-country entity in Europe that is also a member of the FATF.
In Asia, China, Hong Kong (which some consider being autonomous from China, though China disputes this claim), India, Israel, Japan, Malaysia, South Korea, the Russian Federation, Saudi Arabia, Singapore, and Turkey are members of the FATF. Indonesia, also in Asia, is not a member but is considered an observer. The Gulf Cooperation Council, which consists of small, oil-producing countries in the Persian Gulf, is a non-country entity in Asia that is a member of the FATF. Australia and New Zealand are members on the Australian continent, and South Africa is the only country in Africa that is a member.
Many of the countries that the FATF has blacklisted due to shady financial practices, including the so-called “tax havens,” where some people choose to store their funds so that they will not have to pay taxes in their home countries. Other countries are known to provide state financing for terrorist groups. If the FATF blacklists a country and that country refuses to cooperate in strengthening its financial practices, it may be labeled as a Non-Cooperative Country or Territory (NCCT).
The Cayman Islands in the Caribbean, a popular tax haven, has, in the past, been designated an NCCT by the FATF. North Korea, a notoriously secretive country and has very few interactions with other countries, is of particular concern to the FATF. As of 2020, there are only two countries on the FATF blacklist: North Korea and Iran. Iran is on the list for suspicion that the state is financing terrorist organizations.