Terrorism threatens societies around the world; however these attacks cannot occur without funding. Identifying and disrupting the financial flows of terrorists and their supporters is therefore key in preventing terrorist attacks before they occur.
The exchange of global financial intelligence, together with the use of financial and law enforcement tools allow governments and authorities to detect and dismantle the financial networks of terrorists, weakening the infrastructure needed for these groups to accomplish their destructive goals.
FATF assessment of global CFT regimes
The Financial Action Task Force (FATF) is an inter-governmental body which sets standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
The FATF is currently assessing the global implementation of the FATF Recommendations, which will be published in June 2019. Insight into observations from the current assessments is provided on the FATF website:
“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.”
Why does the FATF focus on CFT compliance?
In 2015, the FATF agreed that urgent, coordinated global action was needed to combat the intensification of terrorist attacks around the world.
The first step was to monitor the global implementation of the FATF Recommendations, which include important counter-terrorist financing (CTF) measures, to ensure that this activity is criminalised around the world with effective measures in place to disrupt terrorism-related financial flows.
How does the FATF monitor terrorism funding?
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.
The FATF will continue to analyse the financing of ISIL, AQ and their affiliates in order to support operational authorities across the world. The FATF recommends that these assessments should be made available to and used by relevant CFT authorities in order to support domestic CFT efforts.
What are the key challenges and how are they being addressed?
Terrorists and their supporters continue to explore new methods of raising, moving and using funds, presenting challenges to countries in developing effective CFT regimes.
Effective international cooperation is essential in responding to these threats and preventing terrorists from accessing and using the international financial system.
The FATF states that it will “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.”