Combating terrorist financing in the information age
The explosion of the information world has been a benefit for our organisation, but has raised its own set of new problems.
The Financial Action Task Force (FATF) is an inter-governmental policymaking body, with a ministerial mandate to establish international standards for combating money laundering and the financing of terrorism and proliferation.
It relies on building networks, accessing information and issuing reports. We use tools such as a blacklist which helps to put peer pressure on countries to step up their fight against terrorist financing and money laundering.
With the Internet, more people can access our work, and more people can consult with us too. Also, the impact of our announcements and awareness of the FATF and what it means has probably been heightened by the likes of social media, particularly retweets. But while we welcome increased transparency and openness, for the FATF to be effective, it remains necessary for us to maintain confidentiality and discretion. This need has been a hallmark of work at the OECD too. Deciding on the balance between transparency and discretion, communication and confidentiality, is a matter of judgement.
We do not operate by blazing lights, but by soft pressure and building confidence and trust. Real actions sometimes depend on discretion and patience, and the fast speed of real time communications can add unwanted pressures.
There is also another challenge: improved IT has made it easier for people to finance terrorism and created opportunities to cover up money laundering activities. The FATF has recognised the need to address the risks posed by new technologies being used by criminals to launder money and finance terrorism. The FATF standards require countries to assess the risks posed by new products and delivery methods, and we have conducted studies into emerging money laundering and terrorism financing techniques to ensure that its standards remain up-to-date.
There has been a significant rise in recent years in the number of transactions and the volume of funds moving through new and innovative payment methods such as prepaid cards, mobile payments and Internet-based payment services. The rapid development and dynamic nature of these new payment methods has created challenges for countries and private sector institutions to ensure that these products and services are not misused by criminals. The risks of money laundering and terrorist financing vary depending on the functionality of the service and the presence of measures to prevent criminal misuse.
The Internet and related technologies such as Twitter and Facebook have contributed to strengthening the role and the image of the FATF’s Global Network. Over 190 countries have committed to implementing the FATF Recommendations and protecting the international financial system from misuse by criminals and terrorists. These countries are part of the FATF’s Global Network through their membership of the FATF and/or one of the FATFstyle regional bodies. This structure is represented in our new website which has been designed as a gateway to these bodies too. So when you see our website, you see the FATF Global Network.
©OECD Observer No 293 Q4 November 2012
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