FATF ¦ Fifth Round Universal Procedures 2023 (updated June 2025)

Consolidated Processes and Procedures for Mutual Evaluations and Follow-Up: “Universal Procedures 2023”

The Financial Action Task Force (FATF) plays a crucial role in safeguarding the global financial system against money laundering, terrorist financing, and the financing of proliferation of weapons of mass destruction. To achieve this, FATF develops and promotes international standards known as the FATF Recommendations, which are globally recognized as the benchmark for Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT). In October 2023, FATF adopted the “Universal Procedures 2023,” a comprehensive set of consolidated processes and guidelines governing mutual evaluations and follow-up assessments of countries’ AML/CFT frameworks. Updated as recently as June 2025, these procedures are designed to ensure a consistent, transparent, and effective peer-review mechanism across FATF and its regional bodies (FSRBs), as well as other assessment organizations such as the International Monetary Fund (IMF) and World Bank.

Scope and Objectives of Mutual Evaluations

Mutual evaluations under these Universal Procedures assess countries on two interrelated components: technical compliance and effectiveness. Technical compliance examines whether countries have the necessary laws, regulations, and institutional frameworks in place to meet FATF standards. Effectiveness looks at how well these frameworks operate in practice to achieve AML/CFT goals.

The evaluation process is rigorous and encourages countries to improve continuously by identifying areas for strengthening their systems. The ultimate objective is to protect the international financial system from abuse by criminal elements while promoting fairness and transparency among all members.

Bastian Schwind-Wagner_Follow "For practitioners in compliance, regulation, law enforcement, or policy-making fields, understanding these procedures is essential for navigating international AML/CFT obligations and contributing effectively to global financial security efforts."

Structure and Roles Within the Evaluation Process

The Universal Procedures outline clear roles and responsibilities for all participants:

• Assessed Countries are responsible for providing accurate, complete, and timely information throughout the evaluation and follow-up phases. They should designate coordinators to facilitate communication with the FATF Secretariat and ensure confidentiality during on-site visits.
• Assessment Teams comprise experts with specialized knowledge in legal, financial, and law enforcement areas. These teams conduct desk reviews, on-site visits lasting approximately two weeks, and produce detailed Mutual Evaluation Reports (MERs), including Key Recommended Actions (KRAs).
• Mutual Evaluation Reviewers ensure quality and consistency by independently reviewing draft reports and providing feedback.
• Follow-Up Experts monitor progress on addressing KRAs post-evaluation, analyzing technical compliance updates, and recommending re-ratings where warranted.
• Secretariat Staff coordinate all logistical aspects, maintain communications between parties, uphold confidentiality standards, and support quality assurance.

The Evaluation Timeline and Process

The mutual evaluation process spans over 18 months prior to plenary discussion:

• Initial preparation involves risk assessment, scoping exercises to identify areas for increased or decreased focus based on country-specific risk profiles, and technical compliance reviews concentrating on any legal or operational changes since the last evaluation.
• The on-site visit is an intensive period involving discussions with governmental authorities, financial institutions, designated non-financial businesses and professions (DNFBPs), virtual asset service providers (VASPs), and other relevant actors. Confidential meetings with private sector representatives are encouraged to ensure candid feedback.
• Post-visit, assessors draft the MER, KRA Roadmap, and Executive Summary. These documents undergo multiple rounds of consultation with the country under review and independent reviewers before being presented at plenary for adoption.
• The plenary discussion focuses on substantive key issues, particularly effectiveness ratings and KRAs. Adoption may be conditional upon amendments or deferred if significant concerns arise.

Follow-Up Mechanisms

Countries enter follow-up processes after their MERs are adopted to monitor progress:

• Regular Follow-Up applies to countries with generally strong systems. It involves self-assessment reports three years after the MER to update on KRAs and request technical compliance re-ratings as appropriate.
• Enhanced Follow-Up is for countries needing substantial improvements. Follow-up experts conduct detailed analyses of progress against KRAs, including technical compliance updates.
• International Cooperation Review Group (ICRG) involvement is reserved for countries with fundamental deficiencies. The ICRG process includes more direct FATF oversight aiming to prompt urgent remedial actions.

Follow-up reports are rigorously reviewed by peers with mechanisms to escalate issues through high-level missions or formal statements in cases of insufficient political commitment or progress.

Quality Assurance and Transparency

To maintain the integrity of evaluations, the Universal Procedures include a post-plenary Quality & Consistency (Q&C) review process. This mechanism addresses any serious concerns about report quality or methodological consistency raised after adoption but before publication.

Once finalized, Mutual Evaluation Reports and follow-up documents are published on FATF and FSRB websites. Media outreach is coordinated carefully with assessed countries to ensure transparency while respecting confidentiality until official release.

Conclusion

The FATF Universal Procedures 2023 establish a robust framework for assessing countries’ AML/CFT efforts worldwide through a standardized peer-review process. By promoting objectivity, mutual accountability, and continuous improvement, these procedures strengthen global cooperation against financial crime risks. Countries undergoing evaluations benefit from clear guidance on expectations and pathways toward enhancing their financial crime prevention regimes.

Dive deeper

• FATF ¦ Consolidated Processes and Procedures for Mutual Evaluations and Follow-Up: “Universal Procedures 2023” ¦ Link