On 16 November 2015 the Financial Action Task Force (FATF) published a report addressed to G20 leaders on the global implementation of key counter-terrorist financing measures. The report aims to determine if an effective AML/CTF framework has been implemented across 194 jurisdictions.
Key findings of the review
Criminalising terrorist financing as a distinct offence: The review found that almost all jurisdictions, particularly the systematically important ones, have criminalised terrorist financing and most jurisdictions also criminalise financing a terrorist organisation. Providing funds to support a terrorist act, or to support a terrorist organisation, is generally treated as a serious crime. Furthermore, FATF identified that only a few jurisdictions have obtained convictions for terrorist-financing and many jurisdictions do not yet criminalise financing an individual terrorist for a purpose unrelated to committing a terrorist act.
Foreign terrorist fighters: United Nations Security Council Resolution 2178 requires Members States to criminalise the financing of travel by foreign terrorist fighters for purposes of terrorism or terrorist training. Following its adoption in September 2014, 27 jurisdictions have amended their laws to efficiently combat foreign terrorist fighters. However, FATF reports that 73% of jurisdictions have not yet criminalised this activity.
Targeted financial sanctions: The report outlines FATF’s concerns that many jurisdictions implement financial sanctions too slowly. Even though most jurisdictions have legal instruments to implement targeted financial sanctions imposed by the United Nations or proposed by the country’s own initiative, the majority of jurisdictions are identified as too slow in implementing these sanctions and there are gaps in many jurisdictions’ legal framework. Some jurisdictions that lack formal powers to apply targeted financial sanctions can make use of criminal justice measures, but the FATF reports that such measures do not adequately substitute targeted financial sanctions. Furthermore, two-thirds of jurisdictions never make practical use of targeted financial sanctions; even though there are adequate legal powers, these are never used in practice. The report includes a list of countries showing the designated individuals and entities that each country has identified and the amount of funds frozen due to suspicions of terrorist financing.
FATF action to implement international standards
FATF is taking significant action to deal with these problems, including specific follow-up to ensure individual jurisdictions address the problems identified and measures to address systemic weaknesses, such as those identified for foreign requests for freezing action. Furthermore, FATF commits to review the international standards on terrorist financing and reinforce the research program on the risks, trends and methods of terrorist financing. FATF will build closer links with operational experts and the Egmont Group of Financial Intelligence Units. The report calls for the support of G20 by endorsing the FATF approach and fully implementing measures to counter terrorist financing. G20 leaders should also provide technical advice and development assistance to help low-capacity jurisdictions effectively implement UN targeted financial sanctions without delay.