Book Description

This report examines the global framework for countering terrorist financing developed by the Financial Action Task Force (FATF) and other international law enforcement bodies. The report includes a thorough examination of the impact of FATF's 'Special Recommendation VIII' on countering the threat of terrorist financing said to be posed by non-profit organizations (NPOs). Developed out of a G7 initiative in 1990, the FATF's '40+9' Recommendations on combating money laundering (AML) and countering the financing of terrorism (CFT) are now an integral part of the global 'good governance' agenda. More than 180 states have now signed up to what is in practice, if not in law, a global convention. The report argues that a lack of democratic control, oversight and accountability of the FATF has allowed for regulations that circumvent concerns about human rights, proportionality and effectiveness. Countries subject to the FATF's Anti Money Laundering (AML)/Counter Terrorism Financing (CFT) requirements must introduce specific criminal laws, law enforcement powers, surveillance and data retention systems, financial services industry regulations and international police co-operation arrangements in accordance with FATF guidance. Participating countries must also undergo a rigorous evaluation of their national police and judicial systems in a peer-review-style assessment of their compliance with the Recommendations. Developed out of World Bank and IMF financial sector assessment programs, this process significantly extends the scope of the Recommendations by imposing extraordinarily detailed guidance on the measures states must take to comply with the 40+9 Recommendations. The rewards for FATF compliance are being seen as a safe place to do business; the sanctions for non-cooperation are designation as a 'non-cooperating territory' and international finance capital steering clear.