Terrorist Financing Prevention in Norway: A Mixed Bag

Norway has made progress in preventing terrorist financing, but still faces challenges in several areas, according to a recent report by the Financial Action Task Force (FATF).

Strengths

Risk-Based Approach: Norway has implemented measures to assess risk and apply a risk-based approach (R.1), demonstrating its commitment to combating money laundering and terrorist financing.
National Cooperation and Coordination: The country has established national cooperation and coordination mechanisms (R.2) to ensure effective communication and collaboration among various stakeholders.
Targeted Financial Sanctions: Norway has made progress in implementing targeted financial sanctions related to terrorism and terrorist financing (R.6), helping to disrupt the flow of funds to terrorist organizations.

Areas for Improvement

Asset Confiscation: Norway has not fully implemented measures to confiscate assets linked to terrorist financing (R.4), leaving gaps in its ability to seize illegal proceeds.
Comprehensive System for Targeting Financial Institutions: The country has not established a comprehensive system for targeting financial institutions that facilitate proliferation-related activities (R.7), making it harder to identify and disrupt illicit transactions.
Financial Institution Secrecy and Correspondent Banking: Norway’s laws and regulations regarding financial institution secrecy (R.9) and correspondent banking (R.13) need improvement to ensure greater transparency and accountability.

Reporting of Suspicious Transactions

Lack of Information Sharing: Norway has not fully implemented a system for sharing information on suspicious transactions (R.20), making it harder to identify and track illicit funds.
Powers of Supervisors and Law Enforcement Agencies: The country’s powers of supervisors (R.26) and law enforcement agencies (R.30) require strengthening to enable more effective investigations and prosecutions.

Progress in Implementing New Technologies

Wire Transfers and Regulation of Financial Institutions: Norway has made progress in implementing measures related to wire transfers (R.16) and the regulation and supervision of financial institutions (R.26), but more work is needed to ensure its financial system remains resilient against terrorist financing threats.

Conclusion

While Norway has taken some steps to address its vulnerabilities, it must continue to strengthen its laws and regulations to effectively prevent terrorist financing. The country’s progress in implementing measures related to risk assessment, national cooperation, and targeted sanctions is encouraging, but more work is needed to ensure a comprehensive and effective approach to combating terrorist financing.