The Financial Action Task Force, or FATF, reported that many countries are not in compliance with its standards on countering the financing of terrorism and anti-money laundering, including those with virtual asset service providers.

In a report released Tuesday on the ‘State of Effectiveness and Compliance with the FATF Standards,’ the organization said 52% of jurisdictions it assessed in 120 countries had “adequate laws and regulatory structures in place” to address illicit transactions. In addition, the FATF reported that only 9% of countries were “substantially effective” in areas including having banks, lenders, money transfer services, and VASPs verify users’ information.

“Countries need to prioritize their efforts and demonstrate improvements in recording, reporting and verifying information regarding legal persons and arrangements,” said the FATF report. “In order to mitigate high-risk activities such as bearer shares and nominee relationships, competent authorities should be able to quickly access accurate and up-to-date information.”

Are countries successfully tackling money laundering & terrorist financing? A new FATF report gives a comprehensive overview of global efforts to tackle these issues. The report outlines what is going well and where countries need to improve.
See more ➡️ https://t.co/4Te6slGmYF pic.twitter.com/qTPCHpa3r9

— FATF (@FATFNews) April 19, 2022

According to the report, the FATF aimed to build “an effective supervisory and enforcement system comprising a wide range of supervisory measures” to ensure VASPs were in compliance with AML and CFT guidelines. The organization said its supervision of such firms was intended to assess risks and mitigate threats in response to dealing with potentially illicit transactions.

Related: FATF includes DeFi in guidance for crypto service providers

Under FATF guidelines, VASPs operating within certain jurisdictions need to be licensed or registered. Under the 120 monitored countries, the organization identified several in March with “strategic deficiencies” in regards to AML and CFT, including the United Arab Emirates, Malta, Cayman Islands, and the Philippines. Many countries are implementing FATF standards, with compliance with the organization’s Travel Rule becoming a necessity for many crypto and blockchain firms.