[Answered] Critically analyse the role and effectiveness of FATF (Financial Action Task Force) in combating the financing of terrorism.

The Financial Action Task Force (FATF) is an inter-governmental body which was established to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.  It is a policy-making body which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

Role of FATF in combating terrorism financing:

1. The FATF is the global standard-setter for combatting money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction (WMD).
2. The role of the FATF is to protect the integrity of the financial system, and enhance its transparency, which contribute towards global security.
3. The FATF conducts and publishes expert operational and strategic studies on risks, trends, and methods; develops and sets global policies, standards, best practice, and guidance.
4. It evaluates FATF member countries and oversees in close cooperation with the FATF-style regional bodies.
5. The FATF has developed a series of recommendations that are recognised as the international standard for combating of money laundering and the financing of terrorism and proliferation of weapons of mass destruction. They form the basis for a co-ordinated response to these threats to the integrity of the financial system and help ensure a level playing field. 
6. The FATF monitors the progress of its members in implementing necessary measures, reviews money laundering and terrorist financing techniques and counter-measures. 
7. In collaboration with other international stakeholders, the FATF works to identify national-level vulnerabilities with the aim of protecting the international financial system from misuse.

Effectiveness of FATF:

1. Over a period of time the FATF has gained perceptible credibility as a professional organisation, which has succeeded in not only increasing awareness regarding the challenges being faced by the global financial system, but also human security issues like terrorism.
2. The FATF has been at the forefront of international efforts to fight money laundering and combating finance to terrorism. Its efforts have been in conjunction with relevant resolutions of the United Nations Security Council (UNSC).
3. It has gained considerable influence over the regulatory framework that deals with financial transactions, in an attempt to make it less liable to exploitation by both profiteers and terrorists.
4. Terrorist financing investigation and prosecution ensures that terrorist financing offences and activities are investigated and persons who finance terrorism are prosecuted and subject to effective, proportionate and dissuasive sanctions.
5. FATF has become one of the major factors for countries like Pakistan being pressurised to take requisite action against terrorists operating from its soil. Terrorist financing preventive measures & financial sanctions require that terrorists, terrorist organisations and terrorist financiers are prevented from raising, moving and using funds, and from abusing the non-profit sector.
6. The naming and shaming policy of the FATF has a corrective underlying principle. A country can be placed on a list and then removed thereafter on receipt of assurance from the highest political authority, along with a judgment on the progress made to implement the guidelines, has ensured an improvement in the overall CFT standards.

Thus FATF played an import role of acting as a standard body to put pressure on terrorism funding and money laundering. Any blacklisting of country cuts the lifeline of terrorist activity supported by state through blockage of funds. Thus FATF act as a pressure group helping in combating terrorism and money laundering.