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In October 2020, the FATF revised its Standards (Recommendation 1 and its Interpretive Note) to require countries, financial institutions, designated non-financial businesses and professions (DNFBPs) and virtual asset service providers (VASPs) to identify, assess, understand and mitigate their proliferation financing risks. The FATF Guidance on Proliferation Financing Risk Assessment and Mitigation, published in June 2021, aims to help countries, financial institutions, DNFBPs and VASPs effectively implement these new FATF requirements.

The Guidance benefited from engagement with various stakeholders and reflects the input from a public consultation in March 2021. It explains how both public and private sectors should conduct risk assessments in the context of proliferation financing, and how they can mitigate the risks they identify. It provides an updated list of indicators of the potential breach, non-implementation or evasion of proliferation financing targeted financial sanctions.

The Guidance includes advice to supervisors and self-regulatory bodies responsible for ensuring that proliferation financing risks are being properly assessed and mitigated. The Guidance emphasises the need for supervisors, financial institutions, and other relevant entities to apply the new obligations in a manner that is proportionate to the risks identified, in order to avoid contributing to de-risking or financial exclusion.