MONEYVAL

As financial crime became more complex, Europe needed an independent body to monitor and improve AML/CFT controls. To address this need, the Council of Europe created MONEYVAL in 1997 to assess national systems and promote compliance with international standards.

What Is MONEYVAL?

MONEYVAL, or the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism, is a permanent monitoring body of the Council of Europe. Its mandate is to evaluate the effectiveness of the implementation of measures against anti-money laundering (AML) and counter-terrorist financing (CTF), particularly in non-FATF member states.

Through peer review exchanges, MONEYVAL evaluates national legal, regulatory, and institutional frameworks to determine whether they comply with international standards and help prevent financial crime. Its reports tend to influence legal reforms, enhance supervision, and shape AML/CFT policy across Europe and beyond.

What Is the Purpose of MONEYVAL?

The purpose of MONEYVAL is to enhance global action against financial crime by encouraging countries towards more uniform and effective AML/CFT standards. It promotes safe and sound financial systems through legal reform, enhanced oversight, and cooperation across borders. 

The committee extends beyond checking compliance to drive change by helping jurisdictions close systemic weak points, reinforce resilience to emerging risks, and builds confidence in financial systems.

What Are the Key Objectives of MONEYVAL?

MONEYVAL aims to promote national and regional defenses against money laundering and other financial crime while maintaining alignment with international standards. Its main goals are:

• Assessing Compliance: Review to what extent member countries implement the FATF Recommendations as well as other AML/CFT measures.
• Gaps Identification: Identify gaps in legal, regulatory, and operating systems that can lead to financial systems being exploited.
• Promoting Reforms: Enhance member states to further deepen their institutions, laws, and supervisory regimes with specific recommendations.
• Broadening Cooperation: Increase cooperation and information exchange among member countries, international bodies, and law enforcement agencies.
• Facilitating Capacity Building: Provide guidance, technical assistance, and training to help jurisdictions combat rising threats to financial crime.

By addressing these goals, the committee helps to build more stronger and resilient financial systems to prevent and combat ML/TF.

How Does MONEYVAL Work?

MONEYVAL operates its role through a systematic and cooperative system. It holds regular plenary sessions, where member states and experts debate evaluation reports, endorse recommendations, and decide on priorities. 

Besides plenaries, high-level meetings are held involving political figures and encouraging the commitment of national authorities to improve AML/CFT systems.

The committee also carries out typology research to examine new trends and approaches in financial crime. The research helps member countries in the identification of vulnerabilities and enhancing regulatory policy. MONEYVAL also conducts training courses and technical cooperation schemes that assist jurisdictions in developing capacity and implementing international standards effectively.

The organization also monitors voluntary tax compliance (VTC) programs to determine whether they align with AML/CFT requirements. They do not create loopholes for harmful financial flows. Such a combination of assessment, information exchange, and control enables the committee to possess a dynamic and practical approach to combat financial crime.

Which Countries Fall Under MONEYVAL’s Monitoring?

MONEYVAL covers a mix of Council of Europe member countries, a range of selected non-member jurisdictions, and some territories and observer institutions. Its membership mainly includes European countries that are not members of the FATF, yet are actively engaging to bring their systems into alignment with international AML/CFT standards.

The committee now has 36 jurisdictions under evaluation. These include Council of Europe member states, non-Council of Europe territories and jurisdictions, and Observer organizations, such as the FATF, the European Commission, Interpol, and the World Bank. These organizations participate in the organization’s work without being evaluated.

This broad membership enables it to act as a bridge between the rest of Europe and the global AML/CFT community so that consistent standards and cooperation among jurisdictions can be ensured.

How Does MONEYVAL Assess AML/CFT Compliance?

MONEYVAL assesses AML/CFT compliance through a formal mutual evaluation based on the FATF methodology. This includes an extensive review of both a country’s legal framework and its effective operation in practice.

The committee first analyzes the technical compliance of national laws, regulations, and institutions with FATF Recommendations. It then analyzes effectiveness, examining how far these measures are applied in order to detect, investigate, and prosecute money laundering and terrorist financing.

As part of the process, expert teams conduct on-site visits to interact with government agencies, regulators, law enforcement authorities, and financial institutions, gathering evidence directly from stakeholders. Upon evaluation, the committee releases a detailed evaluation report that includes strengths, weaknesses, and key actions needed to bridge the identified gaps. 

Jurisdictions are then subjected to follow-up measures, where improvements are needed to be reported and where weaknesses are going to lead to enhanced monitoring. This system not only ensures that countries possess good AML/CFT frameworks in place on paper but also implements them effectively in practice.

How Does MONEYVAL Differ from FATF?

Although both MONEYVAL and the Financial Action Task Force (FATF) share a common objective of enhancing global AML/CFT standards, there are differences in their roles and scopes. FATF is the international standard-setter. It formulates the FATF Recommendations, formulates policy, and oversees compliance among its member states and significant international organizations. 

MONEYVAL, on the other hand, serves as a regional monitoring body of the Council of Europe. It does not provide standards but assesses to what extent the FATF standards are being applied in member jurisdictions. It primarily focuses on Council of Europe states outside the FATF and some selected non-members and territories.

Another key difference is that they have different membership frameworks. FATF comprises major economies and global financial centers, while MONEYVAL has a membership dominated by the European member states and smaller jurisdictions. Despite these differences, the two organizations cooperate very closely with each other to ensure consistency and coordination in the international AML/CFT framework.

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