The importance of urgent action to implement FATF's measures to counter terrorist financing and help defeat ISIL

UN Secretary-General Ban Ki-moon and
FATF President Je-Yoon Shin 

Address by Je-Yoon Shin
FATF President 

Special Session of the United Nations Security Council meeting of Finance Ministers
New York, Thursday 17 December

[As prepared for delivery]

Thank you for this unprecedented opportunity to address you; and to highlight the importance of countries taking urgent action to implement the FATF standards to counter terrorist financing and help defeat ISIL.

Terrorism needs money.  ISIL operates as a state and provides all the services a state is expected to provide.  Therefore ISIL needs more money than other terrorist groups. Money is its biggest vulnerability.

Preventing and disrupting financial flows must be at the centre of any successful strategy to defeat ISIL.

Disrupting the finances of ISIL damages its ability to recruit fighters. 

ISIL needs access to the financial system to move money and pay for supplies.

ISIL misuses charities and money remitters and needs to physically move large quantities of cash.

And financial intelligence can reveal the structure of terrorist groups, the activities of individual terrorists, and their logistics and facilitation networks. 

 

So how does the FATF help and what has it achieved?

The FATF has put in place a global framework of standards to combat the financing of terrorism, based on UN Security Council Resolutions.

Almost all jurisdictions have committed to implement the FATF standards and are being assessed by their peers.

We publicly name those that fail to take action. This warns other jurisdictions and banks of the risks and deters foreign investment. So far FATF has put over 80 jurisdictions through this process, and publicly identified 58 of them.  Of these 58, 43 have since made the necessary reforms.

Our aim is to protect the integrity of the financial system and the broader economy. To make sure there are no safe havens for terrorist financing.

In the last 6 months, the FATF has reviewed the implementation of counter-terrorist financing measures in 196 jurisdictions. 

Almost all have criminalised terrorist financing and can apply targeted financial sanctions. 

In the last two months alone, half of those where we found serious problems have tabled urgent laws to address them.

But this is not enough, only 33 jurisdictions have secured convictions for terrorist financing. And most jurisdictions implement UN asset freezes too slowly, with delays of between 2 days and 1 month.

All jurisdictions must now focus urgently on effective implementation of the FATF standards; and not just pass laws and regulations.

 

The value of these measures is clear:

On Saturday, FATF convened a meeting of operational experts from Financial Intelligence Units, Law Enforcement, and Security and Intelligence Agencies.

They explained how financial intelligence from the private sector has helped track down the terrorists behind recent attacks and therefore prevented further attacks.

We also heard about cases where disruption of terrorist financing has undermined a terrorist group’s ability to prepare attacks. 

On Sunday, FATF members, the UN, IMF, World Bank and others came together to learn lessons from the recent attacks.

We focussed on member’s operational capability to counter terrorist financing.

Our most important conclusion is that there is a need for better, more timely, information sharing:

  • between agencies within jurisdictions;
  • between jurisdictions;
  • and with the private sector. 

In the next 6 weeks we will gather information from FATF members on the terrorist financing risks they face, the challenges of sharing financial intelligence, and how they are responding to those challenges.

This will help us work together to overcome the obstacles to information sharing.  We know, for example, that different data protection laws mean that one of our largest sources of intelligence, the banks, are often prevented from sharing information across borders within their own organisations, let alone with each other or with the authorities.

We will also identify and share red flags – indicators of terrorist financing - to help the private sector detect and report suspicious activity.

 

The FATF has always worked in close partnership with the United Nations.

In October we updated our standards to reflect Security Council Resolution 2178 on foreign terrorist fighters.

With a strong mandate from the Security Council today, we will take further action to strengthen these measures throughout the FATF global network.

And we will continue to promote faster, more effective implementation of targeted financial sanctions. 

Visible support from the UN helps us put pressure on members to implement the FATF standards effectively.  

 

Finally, the FATF is a task-force with a time limited mandate.  This focusses our work and can make us responsive and flexible.

But it also means we depend on the goodwill and support of members, to implement and assess the FATF standards, and to share their knowledge of the changing threats.

As Finance Ministers, we need your strong support to carry on our work.

So I will end by thanking Security Council members, and all our members, for their help with our essential work.

 

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