Financial Action Task Force (FATF)’s recent amendments to Recommendations 1 and 2 and their Interpretive Notes have introduced a new requirement for jurisdictions to conduct a proliferation financing (PF) risk assessment on the national level as well as on the level of financial institutions, designated non-financial businesses and professions (DNFBPs) and virtual asset service providers (VASPs). In order to improve their understanding of the country’s proliferation financing risks, the Czech authorities have requested the Council of Europe’s assistance in developing risk assessment methodological tools as well as to provide advice and support in the National Risk Assessment process.
In 2021, the Economic Crime and Cooperation Division (ECCD) of the Council of Europe has designed a comprehensive Proliferation Financing National Risk Assessment (PF NRA) Methodology with its data gathering and data analysis tools. As agreed with the Czech authorities, the Methodology takes a wider approach by establishing a methodological framework to assess not only risks of potential breach, non-implementation or evasion of the targeted financial obligations as required by the FATF, but also risks of financing of proliferation of weapons of mass destruction (WMD) or dual-use items in general, pursuant to relevant United Nations Security Council Resolutions (UNSCRs).
Following the finalisation of the PF NRA Methodology and its data gathering and data analysis tools, the Council of Europe presented to Czech authorities the practical implementation of the Methodology and the PF NRA process. The event took place on 08 March 2022 in Prague, Czech Republic, and it was attended by representatives of the Financial Analytical Office (FAO, the Czech FIU), Ministry of Interior, State Office for Nuclear Safety, Ministry of Industry and Trade, Czech National Bank, Tax Administration and Ministry of Foreign Affairs. This event also served for an in-depth presentation of existing proliferation financing typologies and case-studies, followed by an expert discussion on current and emerging trends of proliferation financing.
The training was the first step in a wider effort of supporting the Czech Republic in conducting the first PF NRA. As a follow up, the Council of Europe will conduct a series of awareness raising activities to enhance the authorities’, obliged entities’ and private sector’s understanding of PF risks. Moreover, tailored assistance and expert guidance will be ensured throughout the assessment process.
The activity was organised within the framework of the Structural Reform Support Programme initiative on “Enhancing effectiveness of the AML/CFT regime in the Czech Republic”, funded by the European Commission Directorate General for Structural Reform Support (DG REFORM) and the Council of Europe, and implemented by the Council of Europe.