FATF highlights terror financing risks in digital age; flags Pakistan as high-risk jurisdiction

Global terror financing watchdog, Financial Action Task Force (FATF), has underlined the potential threats where money can be misused in a rapidly digitalising world. The FATF said money can be misused to support terrorism, hide illegal earnings, or fund activities that can harm global peace. It highlighted that to protect the world’s financial systems, FATF works with countries around the globe.
 
The FATF also underlined its two reports published in June and July this year, named Complex Proliferation Financing and Sanctions Evasion Schemes and Comprehensive Update on Terrorist Financing Risks. The FATF said, the first report extensively covers advanced methods, including the manipulation of beneficial ownership information to mask the identities of sanctioned individuals and entities, the misuse of virtual assets and cryptocurrencies, and leveraging maritime sectors and shipping industries to bypass international regulations.
 
Meanwhile, the report is named Comprehensive Update on Terrorist Financing Risks. This comprehensive update provides in-depth insights into Terrorist Financing (TF) methods and emerging risks, including the increasing involvement of state-sponsored terrorism. A case study contributed by India highlights the proliferation concerns for the South Asian region arising from the state-owned National Development Complex in Pakistan, which is sanctioned in multiple jurisdictions for proliferation financing concerns. It said Pakistan remains a high-risk jurisdiction in the region for proliferation financing. India, in its National Risk Assessment for Money Laundering and Terrorist Financing 2022, has identified Pakistan’s state sponsorship of terrorism as a high-risk Terror Financing source.