FATF ¦ FATF Annual Report 2024-2025

Progress and priorities – strengthening global defences against financial crime

The Financial Action Task Force’s 2024–2025 Annual Report sets out a year of significant operational progress and strategic change across the global anti–money laundering and counter–terrorist financing (AML/CFT) architecture. Under the Mexican Presidency, the FATF pushed forward revisions to core Standards, completed a fresh round of mutual evaluations of nearly 200 jurisdictions, and ramped up guidance and capacity building on priority threats such as payment transparency, virtual assets, terrorist financing, proliferation financing and online child sexual exploitation. The report stresses collaboration – across FATF members, FATF–Style Regional Bodies, observers, the private sector, civil society and international partners – as essential to making the international financial system less hospitable for criminals and terrorists.

Payment transparency and the Travel Rule – closing gaps in cross‑border flows

One of the most consequential outcomes of the year was the finalisation in June 2025 of revisions to Recommendation 16 on payment transparency. These changes respond to the G20 Cross‑Border Payments Roadmap and introduce clearer, more consistent expectations for information in payment messages and for the roles and responsibilities of ordering, intermediary and beneficiary institutions. By improving the visibility of sender and receiver data, the revised Standard aims to reduce fraud, cut transactional errors, and make it harder for illicit actors to conceal cross‑border flows. The FATF also emphasised the need for fraud‑prevention tools to accompany these transparency requirements so that payments become both safer and more inclusive.

In parallel, the FATF continued work to improve implementation of the Travel Rule in the virtual assets sector. The June publications and the updated list of jurisdictions with materially important virtual asset activity (MIVAs) seek to focus supervisory and regulatory efforts where they matter most. Despite pockets of progress – especially among MIVA jurisdictions that represent the bulk of the market – global implementation of Recommendation 15 remains weak. The report warns that three in four assessed jurisdictions remain non‑compliant or only partially compliant, and that virtual assets and VASPs are increasingly misused to obscure financial trails. The FATF’s approach balances encouragement of responsible innovation, including AML‑by‑Design, with stronger standards and practical guidance to close regulatory gaps.

Bastian Schwind-Wagner _Follow

"The Financial Action Task Force’s 2024–2025 work shows meaningful progress in tightening global controls on cross‑border payments, virtual assets and other high‑risk channels, while placing greater emphasis on real‑world effectiveness rather than technical compliance alone. Continued engagement between regulators, the private sector and regional bodies will be essential to sustain momentum and close persistent gaps in prosecutions and asset recovery.

Policymakers and private‑sector actors should prioritise implementing the updated Recommendation 16, strengthening Travel Rule compliance where relevant, and adopting proportionate risk‑based measures that support financial inclusion. Practical cooperation and targeted assistance for lower‑capacity jurisdictions remain critical to ensuring global defences deliver tangible results."

Refocusing the peer review process – effectiveness, impact and a six‑year cycle

The Annual Report outlines a recalibrated peer review model for the new round of mutual evaluations; the emphasis shifts from technical checklists toward measurable effectiveness. Assessments will concentrate on the 11 Immediate Outcomes that demonstrate how systems operate in practice – for example, whether jurisdictions detect, investigate and prosecute money laundering and terrorist financing, and whether assets are traced and recovered. The process will be more risk‑based and faster, with a practical roadmap designed to produce results and a shorter reassessment cycle of roughly six years. Training of assessors was expanded substantially: 370 officials from 127 jurisdictions qualified through joint trainings, and 135 peer reviewers from 73 jurisdictions were trained to support listing processes. The FATF signals that demonstrating impact – not only improving technical compliance scores – will be central to future credibility and political traction.

Targeting evolving threats – terrorist financing, proliferation financing and online child protection

The FATF consolidated knowledge on shifting threats. A comprehensive update on terrorist financing drew on over 840 submissions from private sector actors, academia and think tanks. It documented the increasing sophistication of terrorist financiers, including the use of technology and anonymous payment mechanisms, and found many jurisdictions still face major or structural deficiencies in investigating and prosecuting terrorist financing. The report highlights informal cash economies, porous borders and weak governance as common contextual risk drivers revealed by recent evaluations.

On proliferation financing and sanctions evasion, the June 2025 report on Complex Proliferation Financing and Sanctions Evasion exposed tactics used to bypass export controls and financial sanctions, including frequent use of shell and front companies, trade‑based concealment techniques, professional intermediaries and formal banking channels. Only a small proportion of countries showed high or substantial effectiveness in implementing targeted financial sanctions, underlining the need for improved detection capabilities and international cooperation.

The FATF also amplified the role of financial intelligence and private‑sector frontline controls in combating online child sexual exploitation and abuse. The new report and related operations demonstrated that financial tracing and partnerships with payment processors and other gatekeepers can materially disrupt offending networks and support victim rescue and prosecution.

A stronger, more inclusive risk framework – financial inclusion and low‑capacity support

Recognising the tension between fighting illicit finance and expanding access to financial services, the FATF strengthened guidance on Recommendation 1 – the risk‑based approach – and issued new guidance on AML/CFT measures that support financial inclusion. The intention is explicit: proportionate, risk‑sensitive measures help bring people into the formal financial system, reducing the unregulated spaces criminals exploit. Outreach activities attracted thousands of participants, and consultations produced hundreds of responses, reflecting a broad consensus that inclusion and integrity are mutually reinforcing.

To address differential national capacities, the FATF launched projects targeted at Low Capacity Countries, expanded technical assistance peer exchanges and adjusted the listing criteria to reduce undue burden on the least developed countries. These changes include clearer prioritisation for active review based on FATF membership, asset thresholds and other objective markers, and greater assistance during a one‑year observation period for jurisdictions that need to correct strategic deficiencies.

Collaboration and private‑sector engagement – operational partnerships matter

Across the report, the FATF underscores that practical results depend on strong collaboration. The Global Network of over 200 jurisdictions, nine regional bodies and a wide set of observers and partners allow the organisation to turn analysis into action. The Private Sector Collaborative Forum and multiple consultations – including large participation in virtual assets symposiums and the payment transparency revision process – reinforced that public‑private cooperation is essential for effective and proportionate measures. Initiatives such as the handbook on informal international cooperation, produced with the Egmont Group, INTERPOL and UNODC, aim to accelerate investigations, asset recovery and prosecutions by promoting actionable, often non‑formal channels for rapid operational exchange.

Results and persistent gaps – grey list dynamics and asset recovery shortfalls

The FATF reported progress on several jurisdictions exiting the grey list after addressing strategic deficiencies; five countries were removed during 2024–2025, and others showed measurable improvements in prosecutions and supervision. Nonetheless, the overall picture of global effectiveness remains incomplete. Asset recovery efforts still fall far short of the scale of estimated criminal proceeds, and many countries struggle with effective measures to defend financial systems and businesses. The FATF indicates that future mutual evaluations will demand both better asset recovery frameworks and stronger evidence of sustained operational outcomes.

Practical implications for compliance and investigations

For compliance officers, investigators and policy makers, the report signals several practical imperatives.

First, payment message fields and originator/beneficiary data must be reliable, consistent and verified – firms should prepare to upgrade messaging systems and governance to meet the revised Recommendation 16.

Second, virtual asset service providers and their counterparties need concrete implementation plans for the Travel Rule and enhanced supervision, especially in MIVA jurisdictions.

Third, private‑sector actors remain indispensable in detecting exploitation – financial institutions, payment service providers and gatekeepers should strengthen alerting and reporting channels for suspected terrorist financing, sanctions evasion, trade‑based laundering and online child exploitation.

Finally, jurisdictions and firms should prioritise risk‑based approaches that enhance inclusion while managing criminal risks, leveraging FATF guidance to justify proportionate measures.

Conclusion – momentum and realism

The 2024–2025 Annual Report portrays a FATF combining technical updates with a stronger focus on effectiveness, while responding in real time to emergent risks. The combination of updated Standards, concentrated assessments, expanded training and targeted support for lower‑capacity jurisdictions has the potential to raise the floor of global AML/CFT effectiveness. Yet the report is candid: many jurisdictions still face major gaps, especially around virtual assets, terrorist financing prosecutions and asset recovery. Sustained political will, improved operational cooperation and deepened public‑private partnerships will be required to translate recent progress into measurable reductions in illicit finance and the harms it fuels.

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