Evaluating the Effectiveness of the Financial Action Task Force’s War on Terrorist Financing
Keywords:counter-terrorism, financial regulation, international organizations, terrorism, war on terror
The Financial Action Task Force (FATF), an intergovernmental body accountable to the Finance Ministers from its member states, has been at the forefront of the war to counter terrorist financing (CTF). It has issued nine recommendations and “named and shamed” those who have failed to comply. While this strategy has convinced all states or countries, except North Korea, to cooperate, the effectiveness of the recommendations still remains unclear. This article seeks to answer the question: is compliance with the FATF recommendations associated with a) fewer terrorist attacks and b) a lower proportion of attacks using expensive weaponry? Through analysis of 138 countries’ records of FATF compliance and terror attacks, this article finds neither a statistically significant relationship between compliance and the number of attacks nor between compliance and the cost of attacks. These results cast doubt upon the FATF recommendations’ effectiveness recommendations and the global war on terrorist financing.
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