EFFICIENCY OF FATF IN COUNTERING THE FINANCING OF TERRORISM: THE PROBLEMS OF REGULATION AND CONTROL

Abstract

Purpose. Analysis of the effectiveness of the systems for combating money laundering and financing of terrorism (AML/CFT) at the national and global levels, in accordance with the FATF standards. Methods. The author analyzed the FATF Methodology based on the basic stages of evaluation of national AML/CFT systems, criteria for technical compliance and effectiveness of AML/CFT systems, as well as their correlation with real indicators of countries for each component in the context of the introduction of the risk-oriented approach to counter the financing of terrorism. The article used a systems approach, comparative analysis and synthesis. Results. Based on the analysis the author concluded that shortcomings in the Methodology of the FATF, the problems of implementation of the FATF standards within jurisdictions, taking into account their economic development. To enhance the effectiveness of implementation of the FATF standards the author formulated the requirements for the analysis of the resource base of jurisdictions, the introduction of ml/TF risk index, report on the effectiveness of the global AML/CFT standards of the criteria and threshold amount for reporting financial transactions to the financial intelligence unit. The author notes the need to develop a list of individuals and entities involved in terrorist activities, to enhance the effectiveness of international cooperation on AML/CFT. The author stresses the importance of the simultaneous use of both the indicators describing the direct results of the activities of the competent bodies in the framework of preventing the terrorism financing and end effects of their activities related to the reduction of risks and threats. Scientific novelty. For the first time, an attempt was made to analyze the technical aspect of the FATF standards in relation to the implementation of the FATF standards at the national level, as well as quantitative and qualitative data are presented for each of the key components of the AML/CFT system set out in the FATF recommendations in their latest edition. The author identified the key factors influencing the efficiency, as well as the regulatory and supervisory issues both at the global level by the FATF, and at the level of the jurisdictions within the national AML/CFT systems.