FATF report identifies vulnerabilities in counter proliferation financing

The Financial Action Task Force (FATF) has published a report and accompanying press release, highlighting significant vulnerabilities in the global financial system's ability to combat proliferation financing (PF) and sanctions evasion. The report finds that only 16% of assessed jurisdictions are effectively implementing targeted financial sanctions. It discusses, amongst other things, trends and methods of sanctions evasion, challenges and good practices in mitigating PF risk and identifies four recommendations for further FATF work on counter proliferation financing.

This includes:

• Updating the understanding of threats, vulnerabilities and typologies periodically, given the varying levels of risk awareness across the public and private sectors.
• Encouraging more meaningful information sharing to enhance the public and private sectors' ability to detect PF and sanctions evasion, especially given the reliance on suspicious activity reports and transaction reports to trigger investigations.
• Introducing an official definition of weapons of mass destruction PF into the FATF General Glossary within five years to overcome jurisdictional differences that hinder international cooperation.
• Conducting a horizontal review of PF risk assessments across the FATF Global Network within three years to identify good practices, once countries have had sufficient time to evaluate their PF risks.

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