FATF seeks greater G20 efforts to check money laundering

As Prime Minister Narendra Modi and other world leaders debate the global economic and geopolitical scenario here at the G20 Summit, an international inter-governmental organisation has sought greater coordination among countries to tackle the menace of money laundering and terror financing.
The Financial Action Task Force (FATF), which is tasked with formulating global best policies for countering money laundering and terrorist financing, has submitted a report to the G20 leaders on areas where it is already working and where it is seeking to work with the support of the G20.
These areas include strengthening its institutional basis, governance and capacity; countering terrorist financing, transparency and availability of beneficial ownership information and correspondent banking and remittances.

The FATF said countering terrorist financing continues to be a key issue for the integrity of the financial system and international security.
Under the German Presidency, the G20 has reaffirmed its commitment to tackling all sources, techniques and channels of terrorist financing and has called for swift implementation of FATF standards worldwide.
The FATF said it has revised its standard on the criminalisation of terrorist financing to ensure it applies to the travel of foreign terrorist fighters and it includes economic and natural resources used by terror groups like ISIS.

It further said all countries must implement robust preventive measures to combat terrorist financing through mutual evaluations and an ongoing programme to follow up on any weaknesses in such laws.

Till date, the FATF has surveyed the legal framework to criminalise terrorist financing and impose United Nations terrorism-related targeted financial sanctions of 205 jurisdictions.
Since 2015, over 36 countries passed new legislation and many committed to doing so. Seven jurisdictions identified as having fundamental deficiencies also passed new legislation to address their technical gaps, and others are at varying stages of drafting or adopting legislation or regulations to rectify the deficiencies.
However, it did not identify the countries.
The FATF said it has produced a detailed research on the methods and trends of terrorism financing, notably a detailed study on risk indicators of terrorist financing, to help identify the same more effectively and studies of the financing of terrorist groups in West and Central Africa.

It is also in the process of identifying ways in which financial intelligence units (FIUs) can contribute even more effectively to counter financing terrorism efforts.
Going forward, the FATF has initiated a project on Financing of Recruitment for Terrorist Purposes, which looks at different models of terrorist recruitment and their associated costs.
The project will also identify potential sources of funding and methods to move funds and identify good practices for inter-agency cooperation in identifying opportunities to disrupt the financing of recruitment for terrorist purposes and using financial intelligence to detect lone actors and small terrorist cells.
The FATF said identifying beneficial ownership remains a highly important issue, both as a money laundering and terrorist financing vulnerability and as a priority on the international agenda.

It further said the remittances sector is vulnerable to misuse for terrorist financing and other criminal activities. These risks need to be adequately addressed through effective implementation of FATF standards by remitters and effective supervision and enforcement by authorities.
The FATF asked the G20 to take a coordinated approach to clarifying regulatory expectations by amending supervisory approaches and national rules and regulations, if needed.