FATF ¦ R.6 Tar­get­ed Fi­nan­cial Sanc­tions re­lat­ed to Ter­ror­ism and Ter­ror­ist Fi­nan­cing

Recommendation 6: From Designation to Communication, Make Every Second Count against Terror Financing

Recommendation 6 is a cornerstone of the international counter-terrorist financing framework. It requires countries to implement targeted financial sanctions to comply with United Nations Security Council resolutions (UNSCRs) focused on terrorism and terrorist financing. Practically, this means freezing funds or other assets without delay and prohibiting their use by designated persons and entities—those named by the UN (under resolutions linked to 1267/ 1989 for Al-Qaida and 1988 for the Taliban) or designated at the national level under UNSCR 1373. This regime is preventive by design. It complements, but does not replace, freezing, seizure, and confiscation in criminal, civil, or administrative proceedings. Effective implementation depends on robust designation processes, rapid communication to the private sector, immediate freezing by all persons and entities, and rules that safeguard due process and the rights of bona fide third parties.

Designation: Who Decides and on What Basis

There are two main pathways for designation:

• UN designations: The 1267/1989 Committee (Al-Qaida and associates) and the 1988 Committee (Taliban and related threats to Afghanistan) designate under Chapter VII of the UN Charter. Countries must be able to propose names to these committees, backed by sufficient identifying data and a releasable statement of case detailing the grounds for listing.
• National designations under UNSCR 1373: Countries identify and designate persons and entities that meet the resolution’s criteria, either acting on their own motion or responding to another country’s request. The receiving country must determine — according to its legal principles — that reasonable grounds or a reasonable basis exists to suspect or believe the person or entity meets the designation criteria.

For both tracks, countries need clear legal authority, competent bodies (or courts) assigned responsibility, and mechanisms to collect and analyze information from relevant sources. The evidentiary threshold is “reasonable grounds” or “reasonable basis”, applied consistent with the country’s legal system. Critically, designation must not be contingent upon criminal proceedings and should be able to proceed ex parte.

Bastian Schwind-Wagner_Follow "Recommendation 6 requires immediate, targeted financial sanctions to prevent funds from reaching terrorists and their support networks. Effective implementation hinges on swift designation, freezing, communication, and due process safeguards across both UN and national regimes."

What Must Be Frozen — and How Fast

The core obligation is to freeze, without delay and without prior notice, all funds or other assets:

• Owned or controlled by a designated person or entity (not limited to assets linked to a specific terrorist act).
• Wholly or jointly owned or controlled, directly or indirectly, by designated parties.
• Derived from assets owned or controlled by designated parties.
• Belonging to persons and entities acting on behalf of, or at the direction of, designated parties.

Equally important, all persons and entities within the jurisdiction must be prohibited from making funds, economic resources, or services available, directly or indirectly, to or for the benefit of designated parties, their owned/controlled entities, and their proxies — unless expressly licensed or authorized consistent with the relevant UNSCRs.

To make this real, countries must immediately communicate designations to the financial sector and DNFBPs (designated non-financial businesses and professions), issue clear operational guidance, and require reporting of assets frozen, prohibited dealings, and attempted transactions. Systems must protect bona fide third parties acting in good faith from undue harm.

De-Listing, Unfreezing, and Access to Funds

A credible sanctions regime includes mechanisms to correct errors, provide relief for legitimate needs, and respect due process:

• De-listing from UN lists: Countries must have public procedures to submit de-listing requests to the 1267/1989 or 1988 Committees when a person or entity no longer meets listing criteria. When a committee de-lists, the freeze obligation ceases. For Al-Qaida listings, countries should inform designated persons of the UN Ombudsperson process.
• National de-listing under UNSCR 1373: Countries need legal authority and procedures to de-list and unfreeze when criteria are no longer met, including judicial or independent review of designation decisions upon request.
• False positives: Where non-listed parties are inadvertently affected due to name similarity, there must be timely, publicly known procedures to verify and unfreeze.
• Humanitarian and basic needs: Access to frozen funds may be authorized for basic expenses, fees, service charges, and extraordinary expenses consistent with UNSCR 1452 and successor resolutions.
• Similar licenses may be granted for national freezes under UNSCR 1373 and as reflected in UNSCR 1963.

United Nations Criteria: Who Can Be Listed

Designation criteria are expressly defined in the UNSCRs:

• Al-Qaida (UNSCRs 1267/1989 and successors): Anyone participating in financing, planning, facilitating, preparing, or perpetrating acts or activities of Al-Qaida or any cell, affiliate, splinter group, or derivative; supplying arms; recruiting; or otherwise supporting such acts. Also, any undertaking owned or controlled, directly or indirectly, by such persons or entities, or persons acting on their behalf or at their direction.
• Taliban (UNSCRs 1267/1988 and successors): Anyone participating in or supporting acts or activities of individuals, groups, undertakings, and entities associated with the Taliban that pose a threat to the peace, stability, and security of Afghanistan; plus undertakings owned or controlled by such designees or their proxies.
• National designations (UNSCR 1373): Anyone who commits or attempts to commit terrorist acts, participates in or facilitates them; any entity owned or controlled, directly or indirectly, by such persons; and any person or entity acting on their behalf or at their direction.

Governance and Implementation: What Good Looks Like

Strong national frameworks share common features:

• Clear legal basis: Statutes or regulations confer authority to designate, freeze, prohibit dealings, license exceptions, and de-list, as well as to communicate and enforce obligations across all persons and entities.
• Competent authorities: Named bodies (or courts) are empowered to propose UN listings, adopt national listings under 1373, issue licenses, review challenges, and oversee compliance.
• Swift operationalization: Immediate communication channels to banks, securities firms, insurers, MVTS, fintechs, and DNFBPs; standardized reporting on freezes and attempted transactions; and public lists kept up to date.
• Information management: Procedures to collect, validate, and analyze identifiers and evidence; standardized “statement of case” packages for UN proposals; protocols to assess and act on foreign 1373 requests rapidly.
• Safeguards: Protection of bona fide third parties; review mechanisms; transparency of de-listing/unfreezing processes; and respect for human rights and the rule of law.

Practical Takeaways for Financial Institutions and DNFBPs

• Screen immediately against current UN and national lists, including aliases and unique identifiers, and monitor changes in near-real time.
• Freeze assets without delay, without notifying the customer beforehand; block transactions and prevent any movement, conversion, or use.
• Prohibit any direct or indirect provision of funds, economic resources, or services to designated parties and their owned/controlled entities or proxies, unless licensed.
• Report freezes and attempted transactions to the competent authority as required; maintain detailed records to support audits and inspections.
• Implement processes to identify and resolve false positives quickly, with escalation paths to competent authorities.
• Maintain controls for licensed releases (basic or extraordinary expenses), ensuring strict adherence to license terms and reporting obligations.

Bottom Line

Recommendation 6 demands fast, precise, and legally sound action to disrupt terrorist financing. Countries must be able to designate, freeze, prohibit, communicate, and correct — consistently with UN obligations and national law. The financial and professional sectors are the frontline executors: their ability to screen, freeze, report, and manage exceptions — without delay — determines whether terrorist funds are stopped in practice, not just in principle.

Dive deeper

• FATF ¦ The FATF Recommendations ¦ Link