FATF Issues New Guidance on Mitigating Proliferation Financing Risk

It is crucial for authorities to work together to stop the spread of weapons of mass destruction. The FATF has issued guidance to help countries, financial institutions and the non-financial sector assess and reduce the risks of proliferation financing➡️https://t.co/queWjbtNOh pic.twitter.com/2Dk14H3bp7

— FATF (@FATFNews) June 29, 2021

Instructions included in the guidance are related to how countries, financial institutions, Designated Non-Financial Businesses and Professions (DNFBP) and VASPs (Virtual Asset Service Providers) can take proper risk assessment measures for their proliferation risk, and how they can mitigate this once identified. 

An updated list of indicators is included in the guidance for detection of the potential breach, non-implementation, or evasion of proliferation financing targeted financial sanctions. 

Here’s a list of the measures that have been highlighted in the FATF’s guidance:

• Need for robust customer onboarding measures 
• Ongoing monitoring of customers
• Employee training
• Effective risk assessment 
• Proper sanction screening systems 
• Regular and flexible screening procedures
• Strong compliance structure

The guidance also lays down a warning against combined efforts of businesses and individuals to outwit targeted financial sanctions through the use of shell companies, dummy accounts, fraudulent intermediaries, and middlemen. Advice has been provided for supervisors and self-regulatory bodies to ensure proliferation risks are being properly identified and assessed. 

The guidance is available here.

Suggested Read: 40 recommendations of FATF – Shaping the future of your business