Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What does FATF Special Recommendation on Terrorist Financing, SR Two, emphasize?

1. Freeze and confiscate terrorist assets

2. Criminalize the financing of terrorism and related activities

3. Provide assistance to international financial institutions

4. Develop better reporting standards for financial transactions

The correct answer is: Criminalize the financing of terrorism and related activities

The emphasis of FATF Special Recommendation on Terrorist Financing, SR Two, is on the need to criminalize the financing of terrorism and related activities. This recommendation highlights the importance of imposing legal measures that prohibit individuals and organizations from providing financial support to terrorist groups. By establishing a strong legal framework that explicitly defines and penalizes the act of terrorist financing, countries are better equipped to combat terrorism effectively. Criminalizing terrorist financing serves multiple purposes: it deters individuals from engaging in such activities by imposing consequences, it facilitates international cooperation and information-sharing among jurisdictions to track down and prosecute offenders, and it ultimately contributes to the broader goal of enhancing national and global security. The other options, while relevant to the fight against terrorism, do not capture the primary focus of SR Two. Freezing and confiscating terrorist assets and developing better reporting standards for financial transactions relate to action that can be taken post-financing, while providing assistance to international financial institutions is more about collaboration and support rather than establishing a legal basis for prosecuting terrorist financing. Thus, the essence of SR Two lies in criminalizing these financing activities, making it a critical component of an effective anti-terrorism financing strategy.