The Financial Action Task Force (FATF) has taken significant steps to strengthen global anti-money laundering and counter-terrorist financing standards, addressing various aspects such as asset recovery, terrorist financing, and the misuse of citizenship and residency by investment programs.
PARIS — At its plenary meeting this week, the FATF, the global standard-setting body for anti-money laundering and countering the financing of terrorism, advanced numerous initiatives to combat financial crime and enhance global security. These efforts have been welcomed by the United States, highlighting the importance of denying terrorist organizations access to funds and safeguarding the global financial system.
One of the key initiatives adopted by the FATF is the revision of its asset recovery standards. These revisions aim to strengthen the tools available to law enforcement, asset recovery agencies, and the criminal justice system to target and recover criminal proceeds. By improving mutual legal assistance, these measures will enhance the effectiveness of international efforts to combat money laundering and terrorist financing.
Additionally, the FATF members adopted a report on the use of crowdfunding techniques by terrorist groups like Hamas to raise funds for their attacks. This report sheds light on the evolving methods employed by terrorist organizations and underscores the need for robust measures to counter their financing activities.
In response to the commitment made by FATF Ministers in April 2022 to counter corruption, the FATF also adopted a report on the misuse of citizenship and residency by investment (CBI/RBI) programs. This report highlights how corrupt actors, tax evaders, and other criminals exploit these programs to disguise their identity, establish shell companies, and evade taxes or other liabilities. By addressing these risks, the FATF aims to prevent the misuse of such programs for illicit financial activities.
Furthermore, the FATF revised Recommendation 8, which focuses on the protection of non-profit organizations (NPOs) from misuse by terrorist financiers and other illicit actors. This revision demonstrates the FATF’s ongoing efforts to address the misapplication of its standards and strengthen the resilience of NPOs against illicit financing.
The FATF also sent a draft guidance on the revised standards on beneficial ownership of trusts and similar legal arrangements for public comment. This initiative aims to enhance transparency and accountability in financial transactions by ensuring that the true beneficiaries of these arrangements are identified and monitored.
In its commitment to combat terrorist financing, the FATF will undertake work relating to countries’ compliance with Recommendation 5, which requires countries to criminalize terrorist financing. By holding countries accountable for implementing necessary legislation, the FATF aims to strengthen the global fight against terrorism.
Lastly, the FATF welcomed Indonesia as its 40th member, recognizing the substantial progress made by Indonesia in improving its anti-money laundering and counter-terrorist financing regime. This accession further strengthens the FATF’s global network and collaborative efforts to combat financial crime.
In conclusion, the recent initiatives advanced by the FATF highlight its commitment to strengthening global anti-money laundering and counter-terrorist financing standards. By addressing various aspects such as asset recovery, terrorist financing, and the misuse of citizenship and residency by investment programs, the FATF aims to deny terrorist organizations access to funds, safeguard the global financial system, and enhance collective efforts to address financial crime. These measures play a crucial role in protecting the environment by disrupting the financial networks that support illicit activities harmful to the planet.