Public Consultation on Complex Proliferation Financing and Sanctions Evasion Schemes project

Paris, 26 February 2025 - 

In October 2020, the FATF adopted amendments to Recommendations 1 and 2 (R.1 and R.2) and their Interpretive Notes (INR.1 and INR.2) to require countries, financial institutions, designated non-financial businesses and professions (DNFBPs) and virtual asset service providers (VASPs) to identify, assess, and understand their proliferation financing risks i.e. the risk of potential breaches, non-implementation or evasion of the targeted financial sanctions (TFS) detailed in R.7, and to take effective mitigation measures which are commensurate to the identified risks.

The FATF is undertaking a study aimed at improving country and private sector understanding of current Proliferation Financing (PF) risks. This study will detail the evasion techniques used by those evading the targeted financial sanctions detailed in Recommendation 7, which is required by the FATF Standards, as well as other national and supranational sanctions that are not covered by the FATF Standards. The resulting report will focus on providing a comprehensive up-to-date understanding of typologies in complex sanctions evasion schemes relevant to PF and identifying enforcement challenges and best practices, which helps to inform countries’ PF risk assessment and risk mitigation.

To assist the production of the final report, the FATF is seeking input from the private sector and civil society on best practices in mitigating PF risk. Specifically, the FATF is seeking answers to the following questions:

1. What are your unique products or services, including correspondent banking (if applicable), most vulnerable to exploitation by sanctions evaders and PF actors?
2. How do you manage risk related to vulnerable products or services and/or high-risk countries for sanctions evasion and/or PF activity?
3. Can you share any best practices of any measures (such as setting STR rules) that effectively detect potential sanctions evasion activity?
4. Do you use the same tools and mechanisms to detect individuals and entities on the UN Sanctions List vs. national or regional sanctions lists?
5. What are some best practices for information sharing with the public and/or private sectors?
6. What are the biggest challenges for information sharing with the public and/or private sectors?
7. What public information can the FATF provide to assist the private sector, academia, and civil society in mitigating PF risk?
8. In what form and how often should the FATF provide it?

Please provide your responses to the questions set out above by completing the online form by COB Paris time, Friday 21st March, 2025. Your comments will also be shared with the FATF delegations in the course of this work unless you indicate otherwise. The FATF will, however, not share this information with third parties without your consent.

If you have any questions, please contact (RTMG@fatf-gafi.org).

We thank you for your input in advance.