FATF ¦ 2022 Procedures for the FATF AML/CFT/CPF Mutual Evaluations, Follow-Up and ICRG (December 2025)

FATF’s December 2025 Procedures: What Financial Crime Practitioners Need to Know

The FATF’s updated Procedures for Mutual Evaluations, Follow‑Up and ICRG, published December 2025, clarify how countries will be assessed for compliance with AML/CFT/CPF standards, how follow‑up is managed and when jurisdictions are escalated to the International Co‑operation Review Group (ICRG). For financial crime practitioners in banks, compliance teams, regulators and advisory firms, the changes and procedural detail matter because they shape international peer pressure, timelines for remedial action, and the likely public signals that affect correspondent relationships, enhanced due diligence and country risk assessments.

Overview and purpose of the Procedures

The Procedures operationalize the FATF Methodology and set out the practical steps for preparing mutual evaluation reports (MERs), technical compliance (TC) assessments, Key Recommended Actions (KRA) Roadmaps, follow‑up reports and ICRG monitoring. They apply to FATF members and describe coordination with FATF‑style regional bodies (FSRBs), and the circumstances in which the International Monetary Fund (IMF) or World Bank may lead an assessment that the FATF will accept as a mutual evaluation. The document emphasises peer review, transparency, consistency across reports and timely publication, while preserving confidentiality in preparatory stages.

What changed and why it matters

• The Procedures reflect the FATF’s revised assessment approach adopted in 2022 and clarify how the 5th round of mutual evaluations (started in 2024) will run. Crucially, countries are assessed against the Standards and Methodology in force at the time their ME technical compliance submission is due; updates to the Standards after that date are handled in follow‑up. This means institutions should track not only a country’s MER but also changes to the FATF Standards that may be tested at re‑rating or follow‑up.
• The Procedures set precise, risk‑informed sequencing and timelines for on‑site visits, drafting MERs, pre‑Plenary quality and consistency (Q&C) reviews, and post‑Plenary Q&C. For compliance teams, predictable timelines improve planning for remediation, legal changes and engagement with counterparties and supervisors.
• More detailed guidance is provided on assessing “effectiveness” (the 11 Immediate Outcomes) and on how scoping and risk exercises are used to focus on areas of increased or decreased attention. The scoping process, including outreach to other countries for international cooperation examples, means assessors will give weight to cross‑border operational experience. Firms that handle suspicious activity reports (SARs), ML investigations or international requests for assistance should document and be ready to provide evidence of cross‑border cooperation outcomes.

Team composition, confidentiality and peer review

The Procedures reiterate that assessment teams normally comprise five to six expert assessors (legal, financial and law enforcement expertise required), supported by the FATF Secretariat. Assessors, ME reviewers, follow‑up experts and ICRG Joint Group participants act as independent peers and must sign confidentiality agreements and declare conflicts. The FATF expects members to contribute human resources to evaluations and sets a minimum contribution formula; members failing to meet commitments may face charges or, in extreme cases, suspension.

For private‑sector compliance teams, the peer review emphasis means that national remedial steps will be scrutinised not only for legal form but for operational outcomes. Documentation demonstrating sustained supervisory action, prosecutions, asset forfeiture and effective FIU functions will often be decisive for effectiveness ratings.

Bastian Schwind-Wagner _Follow

"The FATF Procedures updated in December 2025 tighten timelines and reinforce peer review to ensure mutual evaluations and follow‑up are both rigorous and consistent. This increases the premium on timely, verifiable evidence of operational outcomes from authorities and private‑sector reporting entities.

Compliance teams should prioritise mapping remediation to KRA Roadmaps and preserving cross‑border cooperation records to demonstrate effectiveness. Doing so reduces the risk of escalation to ICRG and helps maintain market access and correspondent relationships."

Technical compliance, effectiveness and the KRA Roadmap

The Procedures separate the technical compliance (legal and regulatory framework) desk review from the effectiveness assessment, but both feed into the MER and the KRA Roadmap. An assessed country must submit updated TC information (via a TC questionnaire) and a comprehensive effectiveness submission addressing the 11 Immediate Outcomes.

Key practical implications:

• Technical compliance re‑ratings (TCRR) are pursued during follow‑up. A country is assessed on the version of the Standards and Methodology applicable when its TC submission was due; Standards amended after that date are assessed in follow‑up.
• The scoping note, prepared early and iterated with the assessed country, identifies where assessors will increase or reduce focus. The scoping exercise is evidence‑based and informed by external input; institutions should use that window to provide constructive examples of international cooperation and operational experience.
• Key Recommended Actions should be strategic and measurable. The FATF expects countries to aim to fully or largely address KRA within roughly three years of MER adoption; the KRA rating scale is FA/LA/PA/NA (Fully/Largely/Partly/Not addressed). Firms and supervisors should track KRA progress because unresolved KRAs are the triggers for enhanced follow‑up and ICRG escalation.

Follow‑up, ICRG thresholds and escalation mechanics

The Procedures set out the three‑tiered follow‑up architecture:

• Regular follow‑up: the default monitoring path; self‑assessment three years after MER, with limited TC re‑rating activity.
• Enhanced follow‑up: for jurisdictions with significant technical deficiencies or effectiveness weaknesses (examples include five or more PC technical ratings, or one or more NC ratings, or numerous Moderate/Low effectiveness outcomes). Enhanced follow‑up involves expert analysis of progress and more intensive reporting.
• ICRG active review: reserved for jurisdictions with very serious combined technical and effectiveness failings. The ICRG entry criteria include high counts of NC/PC ratings, multiple problematic Recommendations (notably R.3, R.5, R.6, R.10, R.11, R.20) and widespread low/moderate IO ratings. The ICRG uses an Observation Period (usually 12 months) after which a Post‑Observation Period Report (POPR) is prepared. If insufficient progress is shown, the KRA Roadmap is revised, a public statement may be issued, and in extreme cases the FATF may recommend countermeasures or consider membership suspension for FATF members.

What practitioners should watch for

• KRA and timelines: unresolved KRAs, especially those linked to core IOs or to key Recommendations (e.g., R.3, R.5, R.6, R.10, R.11, R.20), accelerate scrutiny and may lead to public statements. Compliance teams should map remediation plans to the KRA Roadmap and produce evidence demonstrating FA/LA progress.
• Technical re‑ratings: institutions should be aware that TCRR requests occur in follow‑up; if a jurisdiction seeks re‑ratings for previously NC/PC Recommendations, assessors will evaluate whether legislative, regulatory and operational changes are actually in force and effective by submission deadlines.
• International co‑operation: the FATF will solicit input from other jurisdictions on operational experience of mutual legal assistance and other cooperation. Private sector and public authorities should record cross‑border outcomes, including timeliness and results of requests, to feed into assessments.
• Public statements and consequences: ICRG public statements call on FATF members to advise their financial institutions to apply enhanced due diligence proportionate to the risks identified. Although the FATF distinguishes such statements from formal “countermeasures” under R.19, statements influence correspondent banking decisions, syndicate participation, and risk appetite in capital and trade flows.
• Post‑Plenary Q&C and publication: the Procedures strengthen pre‑ and post‑Plenary Q&C checks. MERs (and follow‑up reports with substantive issues) may be subject to a post‑Plenary Q&C review before publication. The timing and content of publication affect market perception; compliance and legal teams should coordinate with authorities to manage communications and explain remediation timelines to counterparties.

Practical steps for compliance teams and advisers

• Map remediation to KRA: benchmark domestic remediation plans against the KRA Roadmap and prepare documentary evidence aligned to KRA rating criteria (FA/LA/PA/NA).
• Capture operational evidence: collect case studies, prosecution and forfeiture data, FIU intelligence outputs, STR/SAR statistics, supervisory actions and outcomes that demonstrate effectiveness against the 11 Immediate Outcomes.
• Track procedural deadlines: the FATF’s calendar is precise; timing of legislative changes, implementation dates and in‑force status will determine whether a measure is considered for TCRR or only in later follow‑up.
• Preserve international cooperation records: maintain auditable records of mutual legal assistance, extradition, information sharing and other cross‑border interactions; assessors will value demonstrable cooperation results.
• Prepare for public outreach: if a jurisdiction appears likely to receive an ICRG public statement, banks and insurers should be ready to revise country risk assessments, due diligence step‑ups and transaction monitoring parameters for relevant clients and corridors.

Conclusion

The December 2025 Procedures provide greater procedural clarity, more robust peer review safeguards and clearer escalation paths through follow‑up and ICRG. For financial crime practitioners, the implications are practical and immediate:

• evidence of operational effectiveness matters as much as legal form;
• timelines are fixed and consequential; and
• unresolved KRAs can provoke public signals that materially change how global institutions view country risk.

Close coordination with national authorities, systematic documentation of remedial outcomes and proactive engagement in the scoping and follow‑up windows will help institutions anticipate changes and manage risk exposures more effectively.

Dive deeper

• FATF ¦ 2022 Procedures for the FATF AML/CFT/CPF Mutual Evaluations, Follow-Up and ICRG ¦ Link