FINANCIAL ACTION TASK FORCE PRESIDENT BRIEFS CTC

UNCLAS USUN NEW YORK 000963 SIPDIS E.O. 12958: N/A TAGS: PREL PTER EFIN SUBJECT: FINANCIAL ACTION TASK FORCE PRESIDENT BRIEFS CTC ¶1. Summary: Paul Vlaanderen, President of the Financial Action Task Force (FATF),briefed the Counter-Terrorism Committee (CTC) of the Security Council on October 26. Vlaanderen recounted the history of the FATF and explained the FATF standards, which consist of forty recommendations for combating money laundering and nine for tackling terrorism financing. Currently, the FATF consists of thirty-five members (South Korea joined on October 14) with India as the sole observer. Most countries are not direct members of the FATF, but rather linked through an FATF-Style Regional Bodies (FSRB). End Summary. ¶2. According to Vlaanderen, the FATF cooperates well with the CTC and Counter-Terrorism Committee Executive Directorate (CTED). For example, the FATF has been involved in recent CTED missions to Morocco, India, and Azerbaijan. The FATF recently produced an international best practices paper on freezing terrorist assets in line with Security Council Resolutions 1267 and 1373 and has also issued guidance papers on Resolutions 1540, 1737 and 1803. In April 2008, the FATF slightly expanded its mandate to include proliferation financing and a FATF project team is currently studying the issue with the 1540 committee. The FATF periodically assesses member countries and publishes their reports online. These reports serve to ensure compliance and identify any gaps in legislation. Non-compliance could lead to the termination of membership to FATF and also has an effect on States' financial sectors. It has established the International Cooperation Review Group to deter non-compliance. ¶3. The recent G-20 meeting in Pittsburgh called on FATF to produce a list of high risk jurisdictions by February 2010. In 2003, the forty money-laundering standards were revised to make them applicable to both money laundering and the financing of terrorism. In 2005, it was determined that a review of the standards should include whether they have been implemented effectively by all concerned stakeholders. In 2009, 129 jurisdictions had been assessed. Of these 129, thirty had successfully implemented the resolutions, with only twenty-one with effective systems to freeze terrorism-related assets. ¶4. Vlaanderen explained the FATF typology exercises which study cases and methods and serve as a check for the FATF on the effectiveness of anti-money laundering and terrorist financing policy. In addition, he explained FATF's cooperation with the private sector. ¶5. USUN LegOFF asked what other measures the FATF takes with members who are in non-compliance (other than just expulsion from the FATF) and whether there was anything he recommended the CTC could do to enhance compliance. Vlaanderen responded that the FATF was not in the business of technical assistance as it did not have the resources (less than twenty professionals on staff) and that it needed to focus its resources on its "core business." Vlaanderen responded similarly when Austria asked about increased coordination such as workshops. Austria also asked if the FATF had any insight on how the private sector deals with the lack of identifiers with regards to 1267 listing and the freezing of assets. Vlaanderen replied that the issue of identifiers is far from the core mandate of the FATF but offered that the private sector (banks) is reluctant to take action without clear identifiers. In response to a question from the Libyan Arab Jamahiriya, Vlaanderen noted that he was not aware of any major problems between FATF and its sister organizations. When asked by Burkina Faso if he saw an increased role for regional or sub-regional groups in compliance, Vlaanderen said that these groups could help in improving the quality of the reviews by FSRBs as the 180 or so reviews differ greatly in content. Rice