FATF Recommendation 6

1. FATF Recommendation 6 Overview of Technical Requirements Lauren Hirsh APG Secretariat June 2019

2. FATF Recommendation 6 6. Targeted financial sanctions related to terrorism and terrorist financing Countries should implement TFS regimes to comply with UNSCRs relating to the prevention and suppression of terrorism and terrorist financing. The resolutions require countries to freeze without delay the funds or other assets of, and to ensure that no funds or other assets are made available, directly or indirectly, to or for the benefit of, any person or entity either: • designated by, or under the authority of, the UNSC under Chapter VII of the Charter of the UN, including in accordance with resolution 1267 (1999) and its successor resolutions; or • designated by that country pursuant to resolution 1373 (2001)

3. R.6 Technical Requirements FATF Methodology (updated Feb 2019) Pg 32-35 Interpretive Note to R.6, FATF Recommendations (updated Oct 2018) Pg 37-44 International Best Practices: TFS related to terrorism and TF (2013)

4. Identifying and designating • Clear authorities and procedures for identifying and designating persons or entities • Competent authority • Evidentiary standard: reasonable grounds or basis • Identifying information

5. Freezing/Prohibitions • Implement TFS “without delay” • Asset freeze – without delay and without prior notice • Prohibitions • Communication to FIs/DNFBPs • Reporting • Rights of bona fide third parties

6. Funds and other assets “The term funds or other assets means any assets, including, but not limited to, financial assets, economic resources (including oil and natural resources), property of every kind, whether tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such funds or other assets, including, but not limited to, bank credits, travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts, or letters of credit, and any interest, dividends or other income on or value accruing from or generated by such funds or other assets, and any other assets which potentially may be used to obtain funds, goods or services” FATF Methodology, Glossary, pg 162

7. Sanctions Recommendation 35 A range of proportionate and dissuasive sanctions, whether criminal, civil or administrative, available to deal with natural or legal persons that fail to comply with the AML/CFT requirements of Recommendation 6

8. Delisting, unfreezing, authorisations • Review of designations • Delisting and unfreezing • False positives • Authorisations

9. Supervision • No specific technical requirement in R.6 • R.35 requires sanctions for non-compliance • IO.3 assesses effectiveness of supervision incl. of TFS obligations • IO.10 requires countries to demonstrate effective implementation of TFS

10. Common deficiencies • No mechanism for accepting/reviewing requests from other countries • Scope of asset freeze/prohibitions • Delays in implementation • Lack of publicly known procedures • Delisting • Unfreezing • False positives • Sanctions not proportionate/dissuasive • Lack of guidance

11. Levels of Compliance - APG C = compliant LC = largely compliant PC = partially compliant NC = non-compliant

12. Levels of Compliance – Global Network

13. Questions?