Middle East and North Africa Financial Action Task Force (MENAFATF)

The Middle East and North Africa Financial Action Task Force (MENAFATF) is a voluntary and cooperative body that operates independently of any other international organization. It was formed in 2004 with 14 countries in Manama, Bahrain, through an agreement among member governments.

The organization has the authority to set its agenda, policies, and procedures. It works closely in coordination with the FATF and other FATF-style regional organisations (FSRBs). Both bodies fight against money laundering, counter-terrorism financing (CTF), and the financing of proliferation.

Which countries are part of MENAFATF?

MENAFATF is a group of 21 member countries from the Middle East and North Africa. The members collaborate to improve AML/CFT standards, conform to international FATF guidelines, and promote financial transparency.

For businesses operating in the MENA region, compliance with MENAFATF’s standards is essential. Non-compliance can result in severe penalties, increased scrutiny of cross-border transactions, or even FATF grey-listing. This can lead to restricted international banking access and damage the company’s reputation.

Who Are MENAFATF’s Observers?

MENAFATF closely cooperates with various important international organizations through its observer program. The observers include:

• Regional and Global Bodies: Asia/Pacific Group on Money Laundering (APG), Egmont Group of Financial Intelligence Units, FATF, Eurasian Group (EAG), Gulf Cooperation Council (GCC).
• International Institutions: International Monetary Fund (IMF), United Nations (UN), World Bank, World Customs Organization (WCO).
• Countries: France, Spain, the United Kingdom (UK), and the United States (US).

These observers provide technical expertise and exchange information. They also ensure MENAFATF’s work aligns with international best practices. 

What Are MENAFATF’s Objectives?

MENAFATF aims to promote regional cooperation and ensures member countries comply with FATF standards. It supports countries in strengthening their AML/CFT standards and implements FATF’s 40 Recommendations. It also enforces relevant UN treaties, agreements, and Security Council resolutions.

The organization enhance  regional compliance through cooperation among member states and international institutions. It addresses cross-border transaction risks by identifying suspicious activity and sharing intelligence. It also ensures all measures are aligned with each country’s legal, constitutional, and cultural framework.

What Is the Structure of MENAFATF?

MENAFATF is designed to ensure coordination, provide technical assistance, and oversee AML/CFT efforts across the region. Its structure is composed of:

• Plenary Meeting: It is a main decision-making body which is made up of representatives from member countries with AML/CFT expertise.
• Secretariat: Handles technical and administrative functions, coordinates mutual evaluations, and liaises with FATF and other partners.
• Mutual Evaluation Working Group (MEWG): The working group prepares and organizes evaluation programs, trains assessors, and follows global AML/CFT developments.
• Technical Assistance and Typologies Working Group (TATWG): TATWG oversees typologies projects, identifies technical assistance needs, and promotes training.
• Risk Committee (RC): Operates under TATWG to exchange best practices on national risk assessments and support expertise-sharing.
• Operational Experts Forum on Terrorist Financing (OFTF): The forum deals with operational aspects of terrorist financing and makes recommendations to the Plenary.
• FIUs Forum (FIUF): A platform for Financial Intelligence Units to share expertise and strengthen regional cooperation.

This framework helps MENAFATF make key decisions and evaluate the progress of its member countries. It also promotes the sharing of expertise and provides support efficiently across the region.

How MENAFATF Helps MENA Member States in AML/CFT Compliance?

Through mutual evaluations, MENAFATF evaluates the FATF recommendation compliance of member states. These reviews identify gaps and recommend enhancements. The organization provides technical assistance and training programs. In addition, it offers regional guidance to strengthen laws, regulations, and enforcement practices.

MENAFATF also publishes typology reports and guidance papers to highlight regional ML/TF risks and share practical solutions. In fighting cross-border threats, the organization enhances coordination among financial intelligence units, regulators, and law enforcement. The periodic follow-up of reports monitors each country’s progress, ensuring that reforms are enforced and maintained.

These efforts play a key role in AML MENA, helping member countries put global AML/CFT standards into practice.

What are the Challenges faced by MENAFATF?

MENAFATF deals with a variety of challenges, particularly during its mutual reviews and technical support activities. Political instability, unequal technical capacity, and variability in national judicial systems often cause delays. The rapid growth of fintech and digital assets adds further complexity, requiring constant adaptation.

Despite progress, MENAFATF and its members also face difficulties such as limited resources in some states. This includes a shortage of trained compliance staff, underdeveloped FIUs, and inadequate technology to track complex transactions. 

Another challenge faced by MENFATF is the diverse legal frameworks in the region. These risks associated with high trade and remittance volumes complicate AML/CFT implementation. Emerging threats such as online fraud and terrorist financing techniques require a timely response and creative solutions.

These challenges require strong regional cooperation, international assistance, and targeted technical support for MENAFATF success.