Editorial: Towards meaningful action against proliferation financing
| DOI | https://doi.org/10.1108/JMLC-03-2023-172 |
| Published date | 02 March 2023 |
| Date | 02 March 2023 |
| Pages | 213-214 |
| Subject Matter | Accounting & finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Louis De Koker |
Editorial: Towards meaningful
action against
proliferation financing
The financial action taskforce (FATF) standards are designed to combatmoney laundering,
terrorist financing and proliferation financing. Threats of Russian employment of nuclear
weapons in its conflict with Ukraine, continuing North Korean ballistic missile testing and
expansion of its intercontinental ballistic missile capacity and concerns about the
availability of uranium on the black market heighten the relevance of effective counter
proliferation financing measures.This is however also the area where FATF standards are
at their weakest, mainlydue to a lack of global consensus among nuclear powers.
Since 1990, the FATF framework secured remarkable standardisation success. More
than 200 jurisdictions committed themselves politically to meeting the FATF standards.
They agreed to be reviewed by their peers for technical compliance with the standards as
well as the effectiveness of their AML/CFT/CPF measures, and they also subjected
themselves to grey-and blacklisting should they fail to meet key requirements.
This level of commitment is not easily achieved at a global level. Leading human rights
instruments of the United Nations, for example, have not achieved similar levels of global
support and implementation. A key driver of this level of agreementand commitment in the
1990s was the high measure of consensus that drug trafficking and organised crime posed
threats that required global,standardised responses.
The events of 9/11 galvanised a similar response to terrorist financing, building off the
international agreement reached two years earlier to suppress the financing of terrorism.
While the International Convention for the Suppression of the Financing of Terrorism was
adopted in December 1999,only a handful of countries had actually signed up to it before the
attacks of 11 September 2001. Within weeks of the attacks, the FATF’s scope broadened to
include combating of financing of terrorists(CFT), and by early 2002, enough countries had
signed the Convention to trigger its entryinto force. At the start of 2023, the Convention had
132 signatoriesand 189 state parties.
From 2007, the FATF began to turn its attention to combating thefinancing of weapons
of mass destruction (CPF). In 2012, the scope of the FATF and its standards were explicitly
expanded to include CFT. The levelof international agreement aboutthe concept of CFT and
the objectives to be attained was, however, much lower than the levels of agreement that
underpinned anti-money laundering and even CFT measures. Some countries, generally
those who do not havenuclear weapons, would want to see all actions financing weaponsof
mass destruction (WMD) covered by the global CFT measures. Certain countries with
nuclear weapons, including United Nations Security Council (UNSC) members with such
weapons,favour a more limited scope that excludedfinancing of their own nuclearprograms.
Broader collaboration may havebeen possible in relation to chemicaland biological weapons,
but theseare clustered with nuclear weaponsunder the WMD proliferationumbrella.
Pre-2012, the FATF members could therefore only agree on project-related working
definitions of CPF. In 2012, for purposes of their incorporation into the FATF standards,
FATF’s CPF concept was finally defined. Disappointingly, the definition limitedthe concept
to support for proliferation-relatedtargeted financial sanctions (TFS) of the UNSC (PF-TFS).
PF-TFS in this context refersin practice to CPF measures supporting the sanctionsimposed
Editorial
213
Journalof Money Laundering
Control
Vol.26 No. 2, 2023
pp. 213-214
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-03-2023-172
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