In June 2025, the FATF sounded the alarm on complex schemes enabling the financing of weapons of mass destruction (WMDs), with serious global security and financial implications. While the focus remains on DPRK and state actors like Iran and Russia, the report emphasizes that weak AML/CFT/CPF controls in third-party countries are a critical vulnerability.
Why this matters for the Global South
Many countries in Africa, Asia, and Latin America are being unknowingly used as intermediaries in sanctions evasion, through shell companies, weak customs regimes, and underregulated virtual asset systems. The report stresses the urgent need for capacity building, better inter-agency coordination, and improved access to beneficial ownership data to safeguard financial systems from being weaponized.
The call to action: Align local AML/CFT efforts with global standards, strengthen cross-border cooperation, and invest in risk-based oversight, especially in high-risk sectors like shipping, trade, and crypto.