Terrorist Financing

Since October 2001, the Financial Action Task Force (FATF) mandate includes terrorist financing.

As a first step, the FATF issued 8 Special Recommendations against Terrorist Financing in October 2001.  A ninth Special Recommendation was added in June 2004.  In addition, in 2003, terrorist financing issues were added to the scope of the 40 FATF Recommendations, where appropriate.

The 9 Special Recommendations against terrorist financing cover a range of measures, which jurisdictions need to implement to effectively fight terrorist financing.  The 9 FATF Recommendations require jurisdictions to:

• Take immediate steps to ratify and implement the relevant United Nations instruments (Special Recommendation I).

• Criminalise the financing of terrorism, terrorist acts and terrorist organisations (Special Recommendation II).

• Freeze and confiscate terrorist assets (Special Recommendation III).

• Report suspicious transactions linked to terrorism (Special Recommendation IV).

• Provide the widest possible range of assistance to other countries’ law enforcement and regulatory authorities for terrorist financing investigations (Special Recommendation V).

• Impose anti-money laundering requirements on alternative remittance systems (Special Recommendation VI).

• Strengthen customer identification measures in international and domestic wire transfers (Special Recommendation VII).

• Ensure that entities, in particular non-profit organisations, cannot be misused to finance terrorism (Special Recommendation VIII).

• Have systems in place to detect and prevent illicit cross-border transportations of cash and bearer negotiable instruments (Special Recommendation IX)