Blocking terrorists' financial flows: Next steps

Remarks by Santiago Otamendi, FATF President
International conference on combating the financing of Daesh and Al-Qaeda "No Money for Terror"
Paris, 26 April 2018

As delivered

Dear Ministers, Heads of international organizations, and colleagues, good morning.

Let me begin these brief remarks by thanking President Macron and the French government for their leadership to reinvigorate global action to counter terrorist financing.

This conference is a unique opportunity to strengthen the collective response.

FATF is THE body that leads global action against terrorist financing by setting the global Standards, assessing their implementation, and identifying, mitigating and sharing information on terrorist financing risks.

This is done in collaboration with its partners including the FATF-Style Regional Bodies, the IMF, World Bank and UN.

The terrorist threat remains high for all of us. Countries that have never experienced a terrorist attack are still vulnerable.

A great deal has been achieved but more needs to be done. This is why in February, the FATF agreed a new Operational Plan on the collective actions necessary.

Today I would like to focus on four actions that you can all take.

First and foremost, every jurisdiction needs to fully and effectively implement the FATF Standards.

Consolidated assessment ratings show that many countries have laws and regulations in place but are not using them.

More than half of countries assessed since 2013 are not effectively implementing targeted financial sanctions, and are failing to investigate and prosecute terrorist financing.

Under my presidency, the FATF has strengthened the engagement of prosecutors and judges, recognizing the importance of successful action to investigate and prosecute terrorist financiers, and to freeze assets.

Effectiveness is often a question of prioritisation and resourcing by national governments, but there is also a need to better coordinate technical assistance and capacity building.

There is a lot of bilateral assistance, and the UN, IMF and World Bank are doing a lot of work. But, more can be done to avoid duplication, and to meet the needs of target countries.

Secondly, there is a clear and present need to improve information sharing and international cooperation.

Cutting off the finances of terrorist organizations and the effective use of financial intelligence is a critical part of any counter-terrorism strategy.

It requires full and timely co-operation between FIUs, law enforcement and intelligence agencies and the Judiciary. And critically, the private sector.

Domestically and across borders, more information needs to be shared, and more rapidly.

The big banks have invested substantially in this area and they want to work with the authorities to improve the quality and use of the information they provide.

Government support for information sharing with the private sector, and to allow banks and others to share information between themselves is critical.

Effective Information Sharing is integral to the FATF Standards. Working with the financial sector, the FATF has recently published new Guidance on Information Sharing . Countries should use this to enhance their response.     

Thirdly, technological innovation in financial services and in the ability to share and analyse large volumes of complex data, provides unique opportunities.

Criminals and terrorists alike are using FinTech. Governments and Fintech providers need to understand and take action to mitigate those risks. And the FATF is bringing them together to do just that.

But FinTech, and its underlying technology, also offers opportunities for following the money behind crime and terrorism, and increasing financial inclusion.

FATF’s research shows a patchwork regulatory response globally to understanding and mitigating these risks, including for virtual currencies or crypto-assets.

With the support of the G20, FATF is in the process of updating its guidance and considering if changes to the standards are required to promote a more consistent and effective approach globally.

At the heart of this is FATF’s commitment to strongly supporting financial innovation that is in line with effective preventive measures.

My final point is to note how, with your support, the FATF itself can achieve more.

For nearly 30 years, the FATF has led global action to protect the integrity of the financial system and contribute to the safety and security of citizens.

As a task force, FATF has been effective in understanding the risks and moving quickly to forge a global consensus on how those risks should be mitigated.

Today FATF is not only evaluating its own 35 member countries. It is also overseeing the evaluation of more than 200 jurisdictions.

The majority of countries now have the tools to do the job. It is time to start using these tools.

Those countries that have the greatest deficiencies and present a strategic risk to the financial system are publicly identified. This has been highly effective in ensuring countries act quickly to take action.

With your support and with the momentum created by this Ministerial Conference and the discussions that we are having, FATF we will be able to build on this success and do even more to ensure there are no safe havens for criminal and terrorist funds.

Thank you for the trust and support you have given to FATF over the years and in the years to come.

Together we can stop terrorist financing.