7th FATF Recommendation

The Financial Action Task Force — FATF — among its various responsibilities, promotes legal and operational standards to combat money laundering and terrorism financing. To achieve this goal, it issued the 40 Recommendations. In this article, we will analyze the FATF’s seventh recommendation.

In this standard, the FATF requires states to comply with the international sanctions issued by the United Nations to combat the proliferation of weapons of mass destruction. The Security Council resolutions on this matter require freezing the assets of any individual designated within those provisions.

Chapter VII of the United Nations Charter serves as the legal basis supporting the Security Council’s legitimacy in issuing sanctions.

This Recommendation includes an Interpretive Note that elaborates on its content. The purpose of Recommendation Seven is for countries to correctly implement financial sanctions on weapons of mass destruction proliferation as mandated by UN Security Council Resolutions.

These measures aim to halt the flow of assets destined for the proliferation of weapons of mass destruction. This Recommendation does not replace other International Treaties that combat this issue from other perspectives, such as the Biological Weapons Convention and the Chemical Weapons Convention.

Countries must establish specific procedures to identify and submit proposals for designating individuals or entities subject to sanctions. Additionally, a sufficient legal framework must be structured to enforce sanctions programs aimed at combating the proliferation of weapons of mass destruction. Implementing these sanctions programs will involve:

• Requiring all individuals and entities to freeze the funds of those designated by UN Security Council Resolutions.
• Prohibiting the provision of funds or other assets for the benefit of individuals designated by the United Nations. 
• Establishing national mechanisms to communicate the designations issued by the UN Security Council.
• Requiring the reporting of frozen assets and actions taken in compliance with sanctions programs to the relevant authorities.
• Implementing procedures to submit requests to the Security Council to remove individuals from the list if they no longer meet the designation criteria. 
• For individuals with the same name as someone designated by a sanctions program, publicly known procedures must be implemented to unfreeze erroneously sanctioned funds.

Currently, the Resolution 1718 of the Security Council is the most well-known. This Resolution consolidates sanctions aimed at individuals and entities in the Democratic People’s Republic of Korea — North Korea —. Its primary goal is to target this state’s nuclear weapons development program.