FATF issues new proliferation guidance
The Financial Action Task Force (FATF) has issued new guidance for national supervisors, banks and other firms in order ro enable them to mitigate their exposure to proliferating weapons of mass destruction.
Dismantling the global routes for funds used in trafficking weapons of mass destruction requires a major increase in private-public sector engagement, according to FATF.
The new recommendations comes on the back of the FATF’s revisions to its Recommendation 1 and related Interpretative Notes which called on entities and states to bulk up efforts to fight proliferation financing (PF) related to sanctions targets.
According to the revisions, banks and other financial institutions do not need independent PF initiatives, but must have processes in place to identify, assess, monitor, manage and mitigate such risks.
They went on to advise entities to begin their risk assessment by “compiling a list of major known or suspected threats; key sectors, products, or services that have been exploited; types and activities that designated individuals/entities engaged in; and the primary reasons why designated persons and entities are not deprived of their assets or identified.”
“The absence of cases involving known or suspected breaches, non-implementation or evasion of PF-TFS in a particular country does not necessarily mean that a country or a private sector firm faces low or any proliferation financing risk,” the guidance paper said. “Designated persons and entities have made use of diverse and constantly evolving methods to disguise their illicit activities, and the networks they control deliberately spread their operations across multiple jurisdictions.”
The guidance builds on a similar paper published three years ago.