FATF ¦ R.40 O­ther Forms of In­ter­na­tion­al Co­op­er­a­tion

Recommendation 40: Strengthening cross-border cooperation to tackle financial crime

Recommendation 40 requires countries to ensure that competent authorities can rapidly, constructively and effectively provide the widest range of international cooperation in relation to money laundering, related predicate offences and terrorist financing. The standard recognises that financial crime and illicit finance are transnational by nature: investigations, asset recovery and preventive measures only succeed when domestic agencies can reach across borders quickly and reliably. The Recommendation sets expectations about legal bases, channels, safeguards and practical tools that enable cooperation both on request and spontaneously.

Legal basis and tools for cooperation

Countries must create a lawful basis for cooperation and authorise competent authorities to use the most efficient means available. Where bilateral or multilateral arrangements are needed, for example memoranda of understanding, these should be negotiated and concluded promptly with a wide range of counterparts. That legal and contractual framework allows authorities to exchange intelligence, supervisory data, bank records, and other material necessary for investigations and preventative action while clarifying limits and responsibilities.

Timeliness, prioritisation and execution

Effective international cooperation depends on clear channels and mechanisms for transmitting and executing requests. Competent authorities should establish procedures to prioritise incoming requests, indicate urgency when appropriate, and execute requests in a timely manner. Requested authorities are expected to provide complete factual and, where relevant, legal information to facilitate prompt execution. Where possible, requesting authorities should provide feedback on how information received was used and on the outcome of any analysis.

Narrowing grounds for refusal

The Recommendation limits unduly restrictive grounds for refusing assistance. Competent authorities should not refuse requests solely

• because they touch on fiscal matters, because domestic secrecy or confidentiality laws apply to financial institutions or designated non-financial businesses and professions (except where legal privilege or professional secrecy clearly applies);
• because a domestic inquiry is ongoing; or
• because the nature or status of the requesting authority differs from that of the requested authority.

These limits reduce safe havens for illicit funds and encourage cross-border cooperation even when legal systems or institutional roles differ.

Safeguards, confidentiality and permitted uses of exchanged information

Information exchanged should be used only for the purposes authorised by the requested authority. Any dissemination or use beyond those purposes must receive prior permission. Requesting and requested authorities must maintain appropriate confidentiality to protect investigative integrity and comply with privacy and data protection obligations. At minimum, information received from abroad should be protected as domestic equivalent intelligence would be. Where a requesting authority cannot adequately safeguard sensitive material, the requested authority may refuse or condition disclosure.

Bastian Schwind-Wagner _Follow

"Recommendation 40 underlines the need for legal clarity and practical mechanisms that let authorities work across borders quickly and securely. Clear mandates, prompt agreements and secure channels reduce delays and friction in investigations, asset recovery and preventive measures.

Effective cooperation depends on trust and safeguards: shared information must be protected, limited to authorised uses, and handled under proportional data protections. Building networks, feedback loops and authorities’ capacity to act on foreign requests strengthens both prevention and enforcement against transnational financial crime."

Powers to search and act on behalf of foreign counterparts

Competent authorities should be able to carry out inquiries and collect information on behalf of foreign counterparts to the same extent they can domestically. Where permitted by domestic law, authorities must be able to take immediate steps — including withholding or suspending transactions — in response to foreign requests where money laundering or terrorist financing is suspected. This power should extend to enabling FIUs and other agencies to act quickly even when counterparts differ across jurisdictions.

Financial intelligence units: broad exchange and feedback

FIUs must be able to exchange information with foreign FIUs regardless of the counterpart’s institutional status. They should have an adequate legal basis to cooperate on AML/CFT matters and be empowered to share all information they can obtain domestically, subject to reciprocity. FIUs should provide, when feasible, feedback to counterpart FIUs about the use and usefulness of information received and the analytic outcomes those exchanges produced.

Supervisors: information sharing and group supervision

Financial supervisors should exchange supervisory, prudential and AML/CFT-related information with foreign peers to enable effective oversight, especially for cross-border or group-wide firms. Exchanges should be proportionate and focused on needs, and prior authorisation should govern dissemination or use of information for non-supervisory purposes unless existing obligations require disclosure. Supervisors should also be able to facilitate or permit foreign counterparts to conduct inquiries domestically to support group supervision.

Law enforcement: joint work, asset tracing and spontaneous sharing

Law enforcement authorities must be able to exchange domestically available information for intelligence and investigative purposes and to use their powers to obtain information on behalf of foreign counterparts. The Recommendation supports joint investigative teams and bilateral or multilateral arrangements to enable cooperative probes. Authorities should be able to identify, trace and assist in freezing, seizing and confiscating criminal proceeds through formal mutual legal assistance, and, where appropriate, base domestic investigations on information received from abroad. Spontaneous sharing of information about criminal property located in a jurisdiction is encouraged when it can aid foreign investigations or asset recovery, subject to safeguards to avoid prejudicing domestic cases. Participation in asset recovery networks such as ARINs is recommended to improve coordination.

Indirect and direct exchanges with non-counterparts

Authorities should be permitted to exchange information indirectly with non-counterparts through one or more intermediaries, provided purposes are clear and safeguards apply. Direct exchanges with non-counterparts are also encouraged where prompt and constructive cooperation is possible. These flexibilities reflect the variety of institutional landscapes globally and the practical need to reach non-traditional counterparts quickly.

Implementation priorities for policymakers and practitioners

To meet the expectations of Recommendation 40, governments should:

• adopt clear statutory or regulatory mandates enabling broad international cooperation;
• negotiate MOUs and multilateral arrangements proactively;
• create secure and efficient channels for requests and responses;
• establish prioritisation and tracking systems to ensure timely execution;
• implement robust confidentiality, data protection and usage safeguards;
• empower FIUs, supervisors and law enforcement to act on foreign requests, including to block or suspend suspect transactions; and
• join multilateral networks for asset recovery and law enforcement cooperation.

Conclusion

Recommendation 40 sets a comprehensive framework for enabling rapid, effective and secure international cooperation across the full spectrum of AML/CFT actors. By reducing legal and practical barriers to timely exchange, clarifying permissible uses and safeguards, and encouraging active participation in bilateral and multilateral networks, countries enhance their ability to disrupt cross-border criminal finance, recover assets and prosecute serious financial crime. Implementing these measures is essential for any jurisdiction seeking to be an effective partner in the global fight against money laundering and terrorist financing.

Dive deeper

• FATF ¦ The FATF Recommendations ¦ Link
• FATF ¦ Luxembourg’s measures to combat money laundering and terrorist financing ¦ Link