Two Faces of the FATF: Modernity and Coloniality

Abstract

The Financial Action Task Force (FATF) promotes the implementation of international standards against money laundering and terrorism financing. Despite the FATF's success in promoting, it struggles with legitimacy. Despite the FATF's success, it struggles with legitimacy. Firstly, many wonder about its relevance and true motivations as it is not an international organization. As explained in Chapter 3, the FATF is seen as a tool of the G7 and the Organisation for Economic Co-operation and Development (OECD) to implement a neo-liberal agenda. Secondly, the growing interest of different economies in moving away from the US dollar as the leading international trade currency can weaken, among others, the enforceability capacity of the FATF, which relies on the response of the international financial system to US regulations. Therefore, the sustainability of the FATF depends on its perceived legitimacy. Consequently, this paper discusses legitimacy as an essential element of the FATF, explains how the FATF and its legitimacy are embedded in the coloniality matrix of power (CMP) from a Latin American perspective, and suggests other options for how the FATF could strengthen its legitimacy.