Thematic examination programme 2023 - LCBFT

Feedback - countering the financing of terrorism and proliferation financing

Over the course of 2023, we assessed the extent to which supervised persons had implemented effective measures to counter terrorist financing (TF) and counter proliferation financing (PF), collectively referred to in this paper as “TF/PF”.

TF/PF risk, along with the linked risk of facilitating sanctions evasion, must be identified and managed throughout the operation of a supervised person’s business. This includes, but is not limited to:

• › documenting its TF/PF risk exposure in a business risk assessment (BRA)
• › maintaining adequate and effective systems and controls which cover TF/PF at the
• appropriate points
• › assessing the risk of a business relationship involving TF/PF
• › monitoring for potential TF/PF activity
• › delivering adequate training to employees
• Where TF/PF controls are not adequate, the effectiveness of a supervised person’s wider financial crime controls will be impacted, potentially exposing them to a heightened risk of being used to facilitate financial crime.