Financial Action Task Force report finds 69% of assessed jurisdictions have major deficiencies in investigating and prosecuting terrorist financing

The Financial Action Task Force (FATF) published its “Comprehensive Update on Terrorist Financing Risks”, warning that terrorist financing (TF) risks are evolving faster than many countries’ ability to understand TF trends and respond effectively. The report finds that 69% of jurisdictions assessed by the FATF and its Global Network show major or structural deficiencies in effectively investigating, prosecuting and convicting TF cases. The analysis highlights terrorists’ continued exploitation of the international financial system and the need for risk-based counter-terrorist financing measures. It describes a widening set of TF methods, including cash transportation, hawala and similar providers, money value transfer services, online payment services, formal financial services, digital platforms such as social media and crowdfunding features, virtual assets, and abuse of legal entities including shell companies, trusts and non-profit organisations (NPOs). Key trends include greater mixing of digital and conventional techniques, more decentralised operations with regional hubs and self-financed cells, rising lone-actor threats relying on microfinancing from licit sources and petty crime, and convergence with organised crime; the report also flags challenges in tracing finances linked to ethnically, racially or politically motivated attacks and highlights risks of humanitarian aid diversion for TF alongside the need for proportionate measures that safeguard NPO activity in line with international law. Recommendations include strengthening international cooperation, developing targeted public-private partnerships, and using practical risk indicators tied to payment patterns, travel activity and social media activity. FATF will host a webinar on 22 July 2025 to help stakeholders understand and respond to the risks identified in the report.