Speech by FATF President at 2020 Chairmanship OSCE-Wide Counter-Terrorism Conference

Effective Partnerships against Terrorism and Violent Extremism and Radicalisation that lead to Terrorism
Session 4 - Enhancing Public-Private Partnerships to restrict Logistical and Financial Support to Terrorists and Protect Vulnerable Targets

Speech by 

Dr. Marcus Pleyer
FATF President

15 September 2020

[As delivered]

Introduction

Thank you for inviting me today to share with you about the work of the Financial Action Task Force, the FATF, and its contribution to promoting public-private partnerships in combatting terrorist financing.

What the FATF does to combat terrorist financing

The FATF – as an intergovernmental body - sets standards for combatting money laundering, the financing of terrorism and of the proliferation of weapons of mass destruction. More than 200 jurisdictions across the world have committed to implement our Standards.

They are backed-up in many areas by the legal authority of the UN Conventions and Security Council Resolutions and by strong political support from the G20. But we are not only a standard setting body, but we also evaluate jurisdictions against these standards assessing whether they have implemented the standards technically by introducing the necessary legal and regulatory requirements, but – even more important – assessing whether they have implemented the rules effectively on the ground. If a jurisdiction is assessed below certain thresholds, we publicly identify this jurisdiction on a grey or black list. This sword is a strong motivator for countries to adhere to our standards. We work in close collaboration with nine regional bodies and with partners such as the United Nations and OSCE.

Combatting terrorist financing is a priority of the FATF and we have been leading global action in this area since 2001. All terrorists need money, but terrorist financing takes many forms and exploits different vulnerabilities of the financial system. Combating terrorist financing takes time and expertise. Recognising the challenges faced by countries across the FATF Global Network, we follow a three-pronged approach to strengthen countries’ ability to prevent, detect, disrupt, investigate, and prosecute the financing of terrorism.

• First, Standards – We develop policy - based on evidence to address risks through the provision of global standards, best practice, and guidance.
• Second, Intelligence – We bring together the operational experience of our members to share information on how terrorists raise and access funds.
• Third, Enforcement – We hold countries to account for effective implementation of the standards through FATF’s programme of mutual evaluations.

Public-private-cooperation plays a role in two ways: First of all, in our own way of work and secondly, in our messages to governments and the private sector. In our own work, the FATF organises annual events such as the Joint Experts’ Meeting and the Private Sector Consultative Forum since 2007 to bring together practitioners impacted by the FATF work.

These outreach events provide invaluable opportunities for public sector stakeholders to exchange views on risks and trends; and for private sector stakeholders to discuss and ask questions about new FATF developments. They are vital in promoting continuous partnership. So for example, before FATF set new standards on crypto assets – as the first standard setting body ever – we invited the private sector to our Private Sector Consultative Forum to intensively discuss the policy options on the table.

More importantly on the second issue: our messages to the public and private sector: The FATF has developed a consolidated strategy and an operational plan on combatting terrorist financing, and a key part of this Strategy is to promote more effective domestic coordination and international cooperation; and to improve information sharing. It stresses the ongoing need for better and more timely information sharing between different agencies within each country; between different countries; and between governments and the private sector.

Partnership with the private sector has shown its value repeatedly, and is a key theme running through our Strategy. Under this Strategy, the FATF has published a number of reports emphasising the importance of public-private partnerships.

One example is the Private Sector Information Sharing which sets out the potential benefits of partnerships, and more recently, when providing technical guidance to our members, we include dedicated content and case studies on public-private partnership.

Last year, we published Terrorist Financing Risk Assessment GuidanceTerrorist Financing Risk Assessment Guidance highlighting the need for collaboration between public and private sectors during all stages of risk assessment. Work is underway to finalise Guidance on Investigating and Prosecuting Terrorist Financing, which will include practical advice for our members on supporting investigations through engagement with the private sector.

The terrorist threat does not stand still, so neither can we. Going forward, the FATF will focus on a range of initiatives under my Presidency, including Digital Transformation of AML/CFT; Environmental Crime; Illicit Arms Trafficking; and Financing of Right Wing Terrorism, a theme also of this conference. The FATF project aims to improve understanding of transnational links and in particular the domestic and international financial flows with regard to this threat. It will identify common structural characteristics and patterns, recommend best practices to authorities on how to counter this threat, and to raise awareness amongst the public about this issue. All these priorities are all trans-national security issues requiring international cooperation at both public and private levels.

I want to briefly highlight the initiative of Digital Transformation, and use it to illustrate how technological advancements to AML/CFT offers huge opportunities, and that public-private partnerships to use those opportunities could help us to more effectively fight terrorism finance.

Financial institutions have made an unprecedented level of investment in information technology, and there is a huge and growing amount of data, available in real time, which can help authorities identify and disrupt terrorist financing. But Governments have to transform the capability of their financial intelligence units and law enforcement agencies, to make better use of this data that flow in from the private sector.

They need to create an enabling environment where private sector partners can also leverage this information to protect against terrorist financing while maintaining a high level of data protection.

Through this initiative, we will identify regulatory obstacles to the successful adoption of new technologies. We will also identify opportunities for public authorities in the use of digital solutions to facilitate secured, effective, and efficient information sharing between public and private sectors. Undoubtedly, public-private partnerships help enhance the quality and use of the information, thereby allowing stronger understanding of evolving risks, and early detection and investigation.

Conclusion

To conclude, I cannot emphasise enough the importance of public-private partnerships in combatting terrorist financing. Many of us in Europe, the Americas, and the Asia Pacific region have witnessed a number of high profile terrorist attacks in the last few years. The establishment of trust and confidence between public and private sectors is therefore fundamental in this fight against terrorist financing. Public-private partnerships must be established before the need for a terrorist financing investigation arises.

On a final note, I am aware that the OSCE has introduced over the years a wide-range of capacity building initiatives, providing tools and resources to public and private sectors on combatting terrorist financing. We look forward to the OSCE to expanding these programmes to connect stakeholders in public and private sectors in the OSCE participating States. At the same time, the FATF will complement these efforts to step up our training activities across the FATF Global Network.

Thank you the OSCE again for the opportunity to share the work of the FATF, and for your continued support for enabling a more joined-up approach to tackling terrorist financing.

Now, I am looking forward to exchanging views with you. Thank you!