Current Efforts by the FATF to Monitor and Take Action against Terrorist Financing

Paris, France, 22 February 2019  - The FATF notes with grave concern and condemns the violent terrorist attack last week that killed at least 40 Indian security forces in Pulwama in the State of Jammu and Kashmir.  From this and other recent attacks on schools in Afghanistan and Nigeria, hotels in Kenya, houses of worship in Indonesia, courthouses in Turkey and concerts and train stations in Europe, terrorism continues to threaten societies and citizens around the world. While all these attacks kill, maim, and inspire fear, they cannot occur without money and the means to move funds between terrorist supporters.

This vulnerability makes identifying terrorists’ financial flows and depriving them of funds a crucial tool in disrupting terrorist attacks before they even occur. Financial intelligence helps governments around the world to map out the financial networks of terrorists and has played a critical role in identifying and disrupting foreign terrorist fighter facilitation and other terrorist networks in North America, Europe and Southeast Asia. Further, using financial and law enforcement tools to cut off terrorists from their sources of revenue weakens the networks and infrastructure needed for these groups to accomplish their destructive goals.

The changing nature of the threats posed by ISIL, AQ and affiliates also demonstrate how the risks affecting different jurisdictions around the world continue to change. In order to help jurisdictions better identify and understand the nature of the risks that are affecting them, and how they are developing over time, the FATF will finalise and publish guidance on TF Risk Assessments in June. The current round of assessments of countries implementation of the FATF Standards has demonstrated that significant vulnerabilities remain in countries CFT regimes. Nearly two-thirds of countries assessed are still not taking effective action to investigate and prosecute terrorist financing, and 80% are not effective in relation to targeted financial sanctions. Under the US Presidency, the FATF will hold a workshop to improve countries capacity to investigate and prosecute terrorist financing. This workshop will build on FATF’s efforts to ensure that the criminal offence of terrorist financing is being aggressively pursued by all jurisdictions. 

The FATF and its global Standards to counter the financing of terrorism (CFT) play a central role in this effort.  However, these Standards are only useful if all jurisdictions effectively and robustly implement them.

In 2015, the FATF agreed that further concerted action was urgently needed to strengthen global counter-terrorist financing regimes, to combat the growing scope and intensification of terrorist attacks around the world. The FATF conducted a fact-finding initiative to determine whether all jurisdictions have implemented the FATF recommendations to criminalise terrorist financing, to ensure that countries implemented key measures to cut off terrorism-related financial flows, in accordance with the FATF Recommendations. This analysis and the process that followed it, resulted in many countries taking additional actions to strengthen their laws to criminalise terrorist financing. However, most countries still need to do more to implement the FATF Standards effectively.  

During the US Presidency, the FATF has focused on further developing the global understanding of TF risk, and providing countries with the tools to combat the risks through improved implementation of the FATF Standards.

The FATF has been analysing the financing of ISIL since 2015, and in October 2018, provided its first public update on the financing of ISIL and its affiliates. This update also included an assessment on the financing of Al-Qaeda (AQ) and affiliates.   While ISIL’s revenue has now been drastically reduced, it continues to maintain significant reserves, and is actively seeking new sources of funds and new mechanisms to raise revenue. AQ and affiliates continue to have significant influence in certain vulnerable regions, and engage in both illegal and legal activities to raise funds. The FATF will continue to analyse the financing of ISIL, AQ and their affiliates in order to support operational authorities across the world. These assessments should be made available to and used by relevant CFT authorities in order to support domestic CFT efforts.

The fight against terrorism and its financing is an ongoing fight, as terrorists and those who finance them, continue to seek out loopholes or new methods to raise, move and use funds, and it is clear that jurisdictions in a number of regions face severe challenges in developing effective CFT regimes.

The FATF and its Global Network will continue to be at the forefront of responding to these emerging threats through innovation and cooperation to deny terrorists funds and prevent them from accessing and using the international financial system. The FATF will also continue to identify areas where jurisdictions are not taking targeted, impactful, and disruptive action against terrorist financing so as to protect the global financial system from being accessed by terrorist financiers.

At its February Plenary, the FATF considered new priority actions for combatting CFT, and agreed a holistic approach that will extend its work to more comprehensively understand how TF risks are adapting, enhance efforts to improve global implementation of CFT Standards, and also focus on supporting the development of CFT regimes in higher-risk regions through its Global Network.

 

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