TITLE:
Financial Investigations under FATF Standards: From Formal Compliance to Operational Effectiveness
AUTHORS:
Abdulaziz Ammar S. Alqarni
KEYWORDS:
Financial Investigations, FATF Standards, AML/CFT Effectiveness, Financial Intelligence, Asset Recovery
JOURNAL NAME:
Open Journal of Business and Management,
Vol.14 No.5,
August
19,
2026
ABSTRACT: Financial investigations have become an essential element of the systems of anti-money laundering and counter-terrorist financing in accordance with the FATF developed framework. Instead of being only an ancillary activity of collecting evidence, financial investigations today have taken up a place in the strategic structure of detection, disruption, prosecution, confiscation and international cooperation. The present study will review how financial investigations are perceived within FATF standards, what the logic behind financial investigations is, and what institutional conditions should be met for efficient conduct of financial investigations. As such, it is argued in the present paper that the FATF standards provide a significant departure from the previously dominant criminalization and reporting-based approach to a goal-oriented one, where tracking money flows, establishing the identity of the beneficial owner, locating assets and turning the financial information into the evidence have become an integral part of the enforcement strategy. On the other hand, it is claimed that the presence of legislative powers is not sufficient for the generation of the relevant results. The significance of the financial investigation process depends on the coordination between the competent authorities, access to financial and corporate information in time, collaboration with the financial intelligence unit, specialized training and the capacity to coordinate the domestic and international investigations. In terms of research methods, the paper employs a doctrinal and analytical approach and uses the FATF guidance on financial investigations published in 2012 while putting it in the context of the updated FATF Recommendations and later FATF guidance and risk material until 2025, specifically regarding the asset recovery, beneficial ownership, inter-agency cooperation, new technologies, proliferation financing and terrorist financing risks.