The Financial Action Task Force (FATF) has issued a report that highlights the evolving challenges in combating terrorist financing. The organization warns about the gaps in countries’ ability to understand and respond effectively to these trends.

FATF’s Comprehensive Report on Terrorist Financing Risks

The report discusses how terrorists continue to exploit the international financial system for their activities and attacks, highlighting the need for adaptive counter-terrorist financing (CFT) measures. It covers a 10-year period and includes contributions from over 80 jurisdictions in the FATF Global Network, along with research and submissions from the private sector, academia, and think tanks.

Main Findings of the FATF Report

Despite efforts by many countries to address terrorist financing (TF), the FATF found that 69% of assessed jurisdictions face significant or structural issues in investigating, prosecuting, and convicting TF cases. The report stresses that both the public and private sectors must enhance their compliance to mitigate vulnerabilities exploited by those seeking to finance terrorism.

Key Trends in Terrorist Financing

• The mixed use of diverse financing methods along with digital technologies has increased complexity in TF activities.
• Terrorist operations are becoming more decentralized, with regional financial hubs and self-financed cells playing a crucial role.
• Lone individuals, often younger and using microfinancing strategies, pose a growing threat by drawing from licit sources and petty crimes, supported by technology like gaming and social media features.
• Challenges in tracing financial trails are particularly acute for ethnically, racially, or politically motivated attacks.
• Terrorist financing schemes are increasingly converging with organized crime.

FATF Recommendations

The report recommends improving international cooperation and fostering targeted public-private partnerships to better understand and address TF. It also offers practical indicators for competent authorities, the private sector, and other stakeholders to help detect and mitigate terrorist financing, such as analyzing patterns in payments, travel activities, and social media behavior.