Terrorism financing, the United Kingdom, and the Financial Action Task Force: A series of omissions or missed opportunities?

Benton, Dominika and Ryder, Nicholas ORCID: https://orcid.org/0009-0008-8712-2946 2023. Terrorism financing, the United Kingdom, and the Financial Action Task Force: A series of omissions or missed opportunities? Dion, Michel, ed. Sustainable Finance and Financial Crime, Sustainable Finance (SUFI), London: Springer, pp. 353-374. (10.1007/978-3-031-28752-7_18)

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Abstract

In its 2018 and Fourth Mutual Evaluation Report of the United Kingdom’s (UK) compliance with its Recommendations, the Financial Action Task Force (FATF) rated the UK’s laundering (AML) and counter-terrorism financing (CTF) regime as the best in world. In order to achieve this rating, the UK has adopted an aggressive and, at times, holistic strategy towards tackling money laundering and terrorism financing. For the purpose of this paper, the UK’s response was identified by reviewing related legislation and policy developments since the UK’s 2007 Mutual Evaluation Review. The legislative measures included the introduction of a comprehensive AML legislative framework that exceeds the international standards. The UK, unlike many other nation states, has an established approach towards implementing a robust CTF regime, which is identified by the FATF as an example of international best practice. HM Government (HMG) stated, ‘the findings of the Mutual Evaluation Report (MER) showed that the UK has the strongest overall … CTF regime of over 60 countries assessed’. However, the rating has been questioned by the Royal United Services Institute (RUSI) who stated that ‘the UK remains central to global money laundering schemes … [thus it] brings into question the relevance of this evaluation’. HMG dismissed these criticisms and referred to the findings of the 2018 Mutual Evaluation Report, which does not consider, among others, the ramifications arising out of the length of time to report and review. The use of Distributed Ledger Technology (DLT) has the potential of overseeing financial transactions for AML/CTF compliance purposes, which by alleviating the need for manual oversight would limit costs and time owing to the innate qualities of the ledger automatically updating its records, thereby facilitating organisations in meeting their regulatory obligations more efficiently as well as working towards a more sustainable regulatory model. The use of technology overall can be beneficial for gathering intelligence through open sources, including social media as evidenced by the work carried out by the Centre for Strategic Counterterrorism Communications in the USA. This chapter presents evidence that there are inherent weaknesses within the UK’s CTF strategy, related legislation and challenges the findings of the UK’s Fourth MER and considers the ways in which technology can be used to tackle terrorism financing.

Item Type:	Book Section
Date Type:	Published Online
Status:	Published
Schools:	Cardiff Law & Politics Cardiff Centre for Crime, Law and Justice (CCLJ)
Publisher:	Springer
ISBN:	978-3-031-28751-0
Date of Acceptance:	23 June 2023
Last Modified:	21 Feb 2024 09:11
URI:	https://orca.cardiff.ac.uk/id/eprint/161166

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