According to critics and terrorism analysts, what are some of the weaknesses in FATF?

Question

What will be an ideal response?

Answer 1

The first has little to do with financing and reverts to the problem of defining terrorism.
Debates about the meaning of terrorism allow funds to flow to terrorist groups. For example, a government may consider a paramilitary group to be a terrorist organization, but another nation might see the same group as a legitimate revolutionary or liberation movement. The first nation outlaws the group because it practices terrorism, and the second nation supports the group as an ally. International prohibition of terrorist financing is impossible without a standard definition, and as W. A. Tupman (2009) notes, there is still no standard definition of terrorism, and nobody is close to providing one.
There are other shortcomings in FATF. Critics note a widespread absence of laws allowing the seizure of assets used to support terrorism. Much of FATF is aimed at informal financial systems, but transactions in these markets take place in secret, where government regulations do not apply. Criminals using these markets are likely to keep informal networks secret, and the majority of people who use them have no criminal intention. They simply do not have access to institutions such as banks. Even when the formal system is discussed, many countries have neither the means nor the will to enforce the recommendations (Thony and Png, 2007).
Enforcement efforts aimed at underground networks are ineffective and often counterproductive in developing countries. In fact, informal systems may well be the thriving sector of an undeveloped nation, and its people may view them as normal and acceptable. Informal exchanges usually take place in cash so that there are few records, which makes transactions difficult to trace. Many people see FATF as an attempt to impose regulation of traditional economies, and the recommendations often violate cultural, social, and religious practices. FATF is ill suited for many areas of the world (Trautsolt and Johnson, 2007).
Critics also have concerns about due process. Assets can be seized and frozen based on the suspicion of terrorist activity. This means that a government may take action before prosecuting a suspect. It also implies that a person can lose assets because he or she is associated with a person or organization engaged in suspicious activity. For example, assume that a charity is financing a terrorist group. A large donor might have assets seized simply because he or she is associated with the charity. This could happen
without formal charges or criminal prosecution (Plachta, 2014). The United Nations tried to remedy this by allowing individuals to petition the government for a formal hearing if assets are frozen.