Financial Action Task Force (FATF)

Which of the following describes the legal status of the FATF Recommendations?

MCQ

MCQ Answer

A. They are mandatory international treaties.
B. They are soft law: non-binding standards but adherence is monitored through mutual evaluations and enforced via peer pressure and potential blacklisting. Correct

Explanation

While not technically treaties, the threat of blacklisting makes compliance virtually mandatory for countries accessing the global financial system.

C. They are only applicable to FATF member countries.
D. They are judicial rulings from an international court.

Correct Answer

They are soft law: non-binding standards but adherence is monitored through mutual evaluations and enforced via peer pressure and potential blacklisting.