November 17, 2023

FATF warns financial institutions against terrorist financing

In a public statement issued following its plenary meeting in October, the Financial Action Task Force (FATF), an intergovernmental body that establishes international standards for anti-money laundering, countering the financing of terrorism, and countering the financing of proliferation of weapons of mass destruction (AML/CFT/CPF), admonished jurisdictions to be vigilant and to guard against the circumvention of AML/CFT/CPF rules.  FATF issued two statements, one identifying certain jurisdictions under increased monitoring, and one listing high risk jurisdictions subject to a call for action.  The former are regimes with strategic deficiencies in their AML/CFT/CPF compliance that are working with FATF to remedy the deficiencies.  Jurisdictions in this category include Bulgaria, Burkina Faso, the Democratic Republic of the Congo, Croatia, Mali, Nigeria, the Philippines, South Africa, Syria, Türkiye, and the United Arab Emirates, among others.  The latter – the list of high risk jurisdictions for which FATF members are called upon to exercise enhanced due diligence and even to apply counter-measures to protect the international financial system – consists of the Democratic People’s Republic of Korea, Iran, and Myanmar.  Suggested counter-measures are described here.

One report adopted by FATF at the plenary outlined how terrorist groups like Hamas use crowdfunding techniques to raise money for their attacks.  Another focus was the abuse of non-profit organizations for terrorist financing; FATF updated its best practices to address this problem.  Through the Financial Crimes Enforcement Network, the US Treasury warned US financial institutions to embrace the FATF recommendations.

The suspension of the Russian Federation from FATF membership continues to stand, whilst Indonesia was granted full membership in the organization.

Press release | FinCEN statement |

FATF Plenary Outcomes