International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Tuesday, November 1, 2016

Efforts to combat terrorist financing

In July 2016, the FATF reported to G20 on its ongoing work to tackle terrorist financing, including the effective implementation of measures to criminalise terrorist financing and freeze terrorists’ assets since the February 2016 meeting. The G20 welcomed this progress and called for swift and effective implementation of FATF standards worldwide as a priority.

The FATF continues to prioritise work to strengthen the understanding of the terrorist financing threats, maintain up-to-date and effective tools to identify and disrupt terrorist financing and ensure that countries are appropriately and effectively implementing these tools. Delegates discussed progress in FATF’s ongoing work on terrorist financing since the June 2016 Plenary and adopted the following outputs: 

Approval of a joint FATF-GABAC-GIABA report on Terrorist Financing in West and Central Africa

In 2013, the FATF and GIABA published a report on terrorist financing in West Africa.  Continuing violence in the West and Central African Region have made this area particularly vulnerable to terrorism and three years after the last study, Boko Haram has developed as one of the deadliest terrorist organisations in the region. FATF, GABAC and GIABA have now updated the 2013 report and expanded it to include Central Africa. The report reveals a number of threats and vulnerabilities that are specific to the region, and highlights the role of cash, including foreign currency. The report looks at the contextual factors and the challenges that the region faces to regulate financial products and sectors. It acknowledges that further work is needed in the area; in particular it highlights the need for countries in the region to work closer together as well as with the broader international community to identify and disrupt terrorist financing.

Update information on, and the understanding of ISIL funding

In-depth knowledge and understanding of ISIL/Da’esh methods to raise, move and use funds, remains an important tool to disrupt their access to funding and deprive them of the ability to finance terrorist attacks. The FATF continues to monitor closely and analyse developments in this regard. FATF discussed changes to the financing of ISIL and its affiliates, allowing FATF and members to take informed actions to disrupt ISIL funding.

Revision of the interpretive note to Recommendation 5 on criminalising terrorist financing.

The FATF has revised the Interpretive Note to Recommendation 5, which focuses on the criminalisation of terrorist financing.  The revision clarifies the scope of the term ‘economic support’ to cover a broad range of economic support, including trade in oil and other natural resources, and other assets which could be used to obtain funds.  These changes reflect recent United Nations Security Council Resolutions, in particular 2199 and 2253, and ensure that important sources of ISIL funding are comprehensively included.  The revised interpretive note refers to ‘funds or other assets’, to ensure that specific forms of support highlighted in UNSCRs are within the scope of the definition.

Approval of the Guidance on criminalising terrorist financing

In 2015, the FATF reviewed the global implementation of key counter-terrorist financing measures in 194 jurisdictions. The review revealed that while most countries had criminalised terrorist financing, some had gaps in their criminal offence, and few had secured convictions or had been able to freeze terrorist assets. 

The FATF developed guidance to assist countries to effectively and comprehensively criminalise terrorist financing, in a manner consistent with national legal systems. In particular, it focuses on how countries can fill gaps in their terrorist financing offence.  The guidance sets out the specific elements that a country must implement to comply with the United Nations International Convention for the Suppression of the Financing of Terrorism (1999) and relevant United Nations Security Council Resolutions, and gives examples of the various approaches that countries have used to implement them in the context of their different legal and operational frameworks.  

Read more

Download the guidance (pdf)

Changes to the Methodology to assess the revised Recommendation 8 on protecting non-profit organisations (NPOs) from terrorist financing abuse, and to assess how effectively countries are implementing these measures.

In June 2016, the FATF revised its Recommendation 8 to ensure that its implementation is in line with the risk-based approach and does not disrupt or discourage legitimate non-profit activities.  The FATF has updated its assessment Methodology for Recommendation 8 and Immediate Outcome 10 to bring it into line with those revisions. Future assessments of members of the FATF and FATF-Style Regional Bodies will be conducted on the basis of this revised Methodology. They will focus on the extent to which measures being applied to NPOs are focused and proportionate, in line with the risk-based approach, such that NPOs are protected from terrorist financing abuse and legitimate charitable activities are not disrupted or discouraged.

 Money Laundering, Asset Forfeiture and Recovery, and Compliance- A Global Guide (LexisNexis Matthew Bender updated quarterly) is an eBook designed to provide the compliance officer, BSA counsel, and government agent with accurate analyses of the AML/CTF Financial and Legal Intelligence, law and practice in the nations of the world with the most current references and resources.  Special topic chapters will assist the compliance officer design and maintain effective risk management programs.  Over 100 country and topic experts from financial institutions, government agencies, law, audit and risk management firms have contributed analysis to develop this practical compliance guide. – See more at: http://www.lexisnexis.com/store/catalog/booktemplate/productdetail.jsp?pageName=relatedProducts&prodId=prod-us-ebook-01701-epub#sthash.Bts3dMm7.dpuf

https://lawprofessors.typepad.com/intfinlaw/2016/11/efforts-to-combat-terrorist-financing.html

| Permalink

Comments

Post a comment