On 20 March 2024, the Wolfsberg Group published a statement on countering terrorist financing (CTF).  The statement replaces the Wolfsberg Group’s first statement on the topic published in 2002. It describes the role of financial institutions in CTF and the key controls which seek to mitigate and manage the risk of a financial institution being abused for the financing of terrorism, as part of a risk based financial crime compliance programme. The statement outlines four priorities: a risk-based approach, customer due diligence, monitoring and screening and global cooperation.

Risk-based approach

In alignment with the Financial Action Task Force’s Financing Risk Assessment Guidance, the Wolfsberg Group is committed to implementing and sustaining a risk based approach to current threats and vulnerabilities. It emphasises that a CTF framework should be informed by guidance from relevant competent authorities, which will include the identification of sectors, activities and jurisdictions more frequently associated with the financing of terrorism. The statement suggests that such a framework should also incorporate specific policies and procedures on risk-based due diligence for acceptance of business from customers engaged in such sectors or activities, and increased monitoring of activity of customers who meet the relevant acceptance criteria.

Customer due diligence

In addition to the continued application of existing customer identification, acceptance, and due diligence procedures, the Wolfsberg Group outlines its commitment to:

  • Maintaining policies and procedures to screen customers and applicable beneficial owners against sanctions or other applicable lists and handling alerts by taking reasonable and practicable steps to determine whether a person or entity involved in a prospective or existing business relationship appears on such a list.
  • Reporting to the relevant authorities the positive matches from screening against lists of known or suspected terrorists or terrorist organisations consistent with applicable laws and regulations regarding the disclosure of customer information.
  • Implementing trigger event reviews/customer reviews.
  • Record-keeping/storing customer information to facilitate the timely retrieval of such information, cognisant of data privacy restrictions and data retention obligations.

Monitoring and screening

The Wolfsberg Group highlights its objectives to:

  • Screen customer names and transactions against sanctions for potential involvement of known or suspected terrorists.
  • Perform monitoring for suspicious and/or unusual customer activity.
  • Provide highly useful information to relevant government agencies in defined priority areas.

Global cooperation

The statement advocates for financial services industry co-operation with law enforcement and government agencies in their efforts to combat the financing of terrorism. This is supported by the Wolfsberg Group’s 2022 paper on Effectiveness through Collaboration, describing the elements of successful engagement in public-private partnerships.