Terrorist Financing: FATF Report to G20 Leaders

Today, the Financial Action Task Force (FATF) published its report to G20 Leaders on the global implementation of key counter-terrorist financing measures – making it a criminal offence to finance terrorism, and using targeted financial sanctions to freeze the assets of terrorists and their financiers.

The FATF reviewed measures to cut off terrorism-related finance in the jurisdictions which take part in the FATF’s global network on anti-money laundering and countering terrorist financing (AML/CFT).

The exercise demonstrated the strength and reach of the global FATF network, and the commitment of member jurisdictions to tackling money laundering and terrorist financing.  194 Jurisdictions took part in this initiative to report to the G20 on the measures they have taken.

The key findings are:

– Almost all jurisdictions have criminalised terrorist financing and 33 jurisdictions have obtained convictions.

– Over 90% of jurisdictions have a legal framework in place to implement targeted financial sanctions.

– 27 Jurisdictions have updated their laws to criminalise the financing of travel by foreign terrorist fighters – as required by UN Security Council Resolution 2178, which was adopted in September 2014.

– In addition, 11 jurisdictions had already criminalised this activity, and several are reviewing what changes are needed.

– Many jurisdictions implement UN targeted financial sanctions too slowly, making it more difficult to prevent asset flight. Two-thirds are not making practical use of targeted financial sanctions, which limits the effectiveness of these measures.

The FATF is taking further action to counter terrorist financing by:

– Encouraging individual jurisdictions to take action.  The FATF will follow-up on its analysis to ensure jurisdictions quickly fill any gaps in their legal frameworks, so that there are no safe-havens for terrorist financing.

– Improving the global response by updating its Recommendations to require action against the financing of foreign terrorist fighters. The FATF is also preparing guidance to help criminalise terrorist financing and to facilitate international cooperation to freeze terrorist assets.

– Improving understanding of the terrorist financing threat. It recently published studies on Emerging Terrorist Financing Risks, and the Financing of the Terrorist Organisation Islamic State in Iraq and the Levant, and is working with operational experts and the Egmont Group of Financial Intelligence Units to keep track of other emerging threats.

Mr. Je-Yoon Shin, FATF President, said:

“Financial measures are an essential tool for fighting terrorism, and the FATF’s top priority is to fight the growing threat from ISIL and other terrorist groups by cutting off their financial flows.  This study shows that we have built a global legal framework to criminalise terrorist financing and freeze terrorist funds in almost all countries. We will continue our efforts to close the remaining gaps and make sure all jurisdictions implement these measures effectively. ”

The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 as the global standard-setter for measures to combat money laundering and terrorist financing, and other related threats to the integrity of the international financial system.  The FATF is therefore a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas. The FATF has developed the 40 Recommendations,  which are the international standard for combating of money laundering and the financing of terrorism and proliferation of weapons of mass destruction.  As well as setting standards, the FATF is responsible for regular assessments of how well members are implementing the Recommendations, and takes action against countries which are non-compliant.

Link to FATF statement

Lavanya Rathnam

Lavanya Rathnam is an experienced technology, finance, and compliance writer. She combines her keen understanding of regulatory frameworks and industry best practices with exemplary writing skills to communicate complex concepts of Governance, Risk, and Compliance (GRC) in clear and accessible language. Lavanya specializes in creating informative and engaging content that educates and empowers readers to make informed decisions. She also works with different companies in the Web 3.0, blockchain, fintech, and EV industries to assess their products’ compliance with evolving regulations and standards.

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