The European Commission (EC) announced a new action plan this week to fight terrorist financing. Upon implementation, the plan directs EU member states to take a number of steps to include the creation of a blacklist of high-risk countries that maintain “strategic deficiencies in the area of anti-money laundering or countering terrorist financing.” The EC will institute “compulsory enhanced due diligence measures and counter-measures” with regard to the movement of funds into and out of those locales.
The EU’s increased sensitivity to and focus on terrorist financing is heightened in the wake of the Paris attacks. Pressuring countries with weak AML/CFT regimes to do more can be effective, though translating sentiment and directives into results will require a renewed spirit of cooperation between governments and financial institutions. Countering terrorist financing requires capabilities to understand how illicit networks operate, the means to assess risk across jurisdictions and services of concern, and the capability to monitor changes in behavior as pressure is applied.