The world's top money laundering watchdog on Friday called on countries to intensify measures to combat the financing of terrorism in the wake of the UK bomb plot and called Britain's efforts exemplary.

Alain Damais, executive secretary of the Paris-based Financial Action Task Force (FATF), said the thwarted attack served as a reminder to countries to intensify anti-terror finance measures designed to choke off funds to militants.

This is again a kind of wake-up call for all the countries around the world to implement the measures, Damais said in a telephone interview. The financial system can always be abused.

Earlier on Friday, Britain named 19 people suspected of an Islamist plot to blow up transatlantic airliners and ordered their assets frozen, a day after police said they had foiled murder on an unimaginable scale.

Damais cheered the Bank of England for ordering the freeze, saying it demonstrated that countries now know how to respond to terrorism threats using tools agreed to in recent years by the FATF and adopted by member countries.

The measures taken by the Bank of England were exemplary, Damais said. This is a concrete application and implementation of the FATF standards.

The FATF - launched in 1989 primarily to combat flows of drug money but instrumental since 2001 in the fight against terror finance - groups around 33 countries and sets policies designed to help governments tackle the financing of terrorism and dirty money passing through the global financial system.

UNDER THE MICROSCOPE

In June, the G8 powers attempted to relaunch efforts to combat terrorism financing, calling on countries to adhere to the FATF rules and saying they would fortify systems for freezing assets and cooperation and would develop new financial tools to disrupt criminal activities.

Damais's call comes as a battery of authorities such as the International Monetary Fund, the Basel Committee on Banking Supervision, the G8 group of nations and the European Union call for better standards and practice in combatting illegal money flows.

Damais said FATF experts would likely work with UK authorities to examine the specifics of the bomb plot in the coming weeks or months to determine methods used to finance it.

The information coming out of yesterday's event will likely feed into the process in the next weeks or months so that we can update it, he said.

New methods to transfer money - either electronically, through assets or drugs, or as cash - could create a new typology. The FATF issues regular warnings to members about new, emerging typologies that criminals use to bypass detection.

The physical transfer or smuggling of cash is the typology increasingly used by money launderers as national financial authorities tighten loopholes and increase surveillance of electronic transfers such as those used by banks.

They've come back to cash because the access to banking systems has been made more and more complex for them, he said.

The FATF plans a mutual evaluation or voluntary assessment of the UK's anti-money-laundering and counter-terrorism financing laws and systems in 2007.

Bomb plot wake-up call in terror finance fight

Fri Aug 11, 2006 11:38 AM ET

By Thomas Atkins

ZURICH (Reuters) - The world's top money laundering watchdog on Friday called on countries to intensify measures to combat the financing of terrorism in the wake of the UK bomb plot and called Britain's efforts exemplary.

Alain Damais, executive secretary of the Paris-based Financial Action Task Force (FATF), said the thwarted attack served as a reminder to countries to intensify anti-terror finance measures designed to choke off funds to militants.

This is again a kind of wake-up call for all the countries around the world to implement the measures, Damais said in a telephone interview. The financial system can always be abused.

Earlier on Friday, Britain named 19 people suspected of an Islamist plot to blow up transatlantic airliners and ordered their assets frozen, a day after police said they had foiled murder on an unimaginable scale.

Damais cheered the Bank of England for ordering the freeze, saying it demonstrated that countries now know how to respond to terrorism threats using tools agreed to in recent years by the FATF and adopted by member countries.

The measures taken by the Bank of England were exemplary, Damais said. This is a concrete application and implementation of the FATF standards.

The FATF - launched in 1989 primarily to combat flows of drug money but instrumental since 2001 in the fight against terror finance - groups around 33 countries and sets policies designed to help governments tackle the financing of terrorism and dirty money passing through the global financial system.

UNDER THE MICROSCOPE

In June, the G8 powers attempted to relaunch efforts to combat terrorism financing, calling on countries to adhere to the FATF rules and saying they would fortify systems for freezing assets and cooperation and would develop new financial tools to disrupt criminal activities.

Damais's call comes as a battery of authorities such as the International Monetary Fund, the Basel Committee on Banking Supervision, the G8 group of nations and the European Union call for better standards and practice in combatting illegal money flows.

Damais said FATF experts would likely work with UK authorities to examine the specifics of the bomb plot in the coming weeks or months to determine methods used to finance it.

The information coming out of yesterday's event will likely feed into the process in the next weeks or months so that we can update it, he said.

New methods to transfer money - either electronically, through assets or drugs, or as cash - could create a new typology. The FATF issues regular warnings to members about new, emerging typologies that criminals use to bypass detection.

The physical transfer or smuggling of cash is the typology increasingly used by money launderers as national financial authorities tighten loopholes and increase surveillance of electronic transfers such as those used by banks.

They've come back to cash because the access to banking systems has been made more and more complex for them, he said.

The FATF plans a mutual evaluation or voluntary assessment of the UK's anti-money-laundering and counter-terrorism financing laws and systems in 2007.

United kingdom Terrorism