G20 china_web

Regulating finance
KEY TAKEAWAYS
The FATF framework provides tools
to deprive terrorists of their funds
It has identified large-scale misuse
of legal persons and arrangements
Fighting money
laundering and
terrorist financing
The Financial Action Task Force’s global framework and
standards are relevant to and can be implemented by
the G20, writes Juan Manuel Vega-Serrano
The persistent terrorist threat and
the recently highlighted largescale
abuse of corporate vehicles
demonstrate once again how
critically important the work of
the Financial Action Task Force (FATF) is in
protecting the integrity of the international
financial system.
The FATF has developed a global
framework of standards to combat money
laundering, terrorist financing and
proliferation financing. At the highest
level, 198 jurisdictions have committed
to implement them fully. The FATF also
analyses the methods criminals and
terrorists use to launder and raise their
funds. We conduct peer reviews to assess
how effectively countries are implementing
the global standards. We identify countries
with strategic deficiencies that pose risks to
the international financial system and take
action to make sure they fix those problems.
As a result, most countries now have the
tools necessary to deprive criminals and
terrorists of their funds. But many still fall
short of implementing them and enforcing
them effectively.
Terrorist groups may benefit from access
to the international financial system. A
global effort is required to deny them that
A lack of money
can limit the
capability of
terrorist groups to
prepare or carry
out attacks
access. Preventing and disrupting terrorist
financing creates a hostile environment
for terrorism. A lack of money can limit the
capability of terrorist groups to prepare or
carry out attacks and financial intelligence
can reveal the structure and activities of
terrorist groups, and their logistics and
facilitation networks.
Using tools effectively
The FATF’s top priority is to reinforce
international measures to combat terrorist
financing. Earlier this year we adopted
a consolidated strategy focused on
maintaining an up-to-date understanding
of the changing terrorist financing risks,
ensuring that the FATF standards provide
effective tools to identify and disrupt
terrorist financing. The aim is to ensure
countries are using these tools effectively,
and promoting better domestic coordination
and easier international cooperation to
combat the financing of terrorism.
In April, the large-scale misuse of legal
persons and arrangements was exposed.
The FATF had introduced standards in
2003 to prevent the misuse of companies
and trusts and to ensure transparency
about their true owners. As a result, most
countries now require their financial
144 G20 China: The Hangzhou Summit • September 2016 G7G20.com