FATF ¦ IO9 TF In­ves­ti­ga­tion & Pro­se­cu­tion

Immediate Outcome 9: Investigating, Prosecuting and Sanctioning Terrorist Financing

Immediate Outcome 9 assesses whether a jurisdiction effectively detects, investigates and prosecutes terrorist financing (TF), and whether those who finance terrorism face effective, proportionate and dissuasive sanctions. The objective is straightforward: the certainty of detection, conviction and punishment should deter TF activity, and financial investigations should meaningfully support counter‑terrorism goals. This outcome ties to FATF Recommendations 5, 30, 31 and 39 and intersects with other recommendations (for example, customer due diligence, intelligence sharing and international cooperation). Evaluating IO9 exposes whether criminal justice systems are functioning coherently to mitigate TF risks and whether non‑criminal tools are used appropriately when prosecutions are impracticable.

Identifying and prioritising TF activity

An effective system first recognises where TF risk exists and channels that recognition into investigations. The methodology highlights a range of TF indicators and sources that should spark inquiries: suspicious transaction reports, parallel financial investigations, open‑source information and domestic or foreign intelligence. Assessors must look at how countries prioritise TF cases — whether there are clear mechanisms to identify major threats quickly and direct investigative resources appropriately. Timely access to financial intelligence and the capacity to link transactions to wider terrorist networks are central. Where TF activity is embedded in larger terrorism investigations, jurisdictions should be able to distinguish the specific role of the financier and treat TF as a distinct criminal focus when appropriate.

Investigations, prosecutions and convictions: scope and effectiveness

IO9 examines how often TF investigations lead to prosecutions and convictions, and what kinds of TF cases are being pursued. This includes prosecutions for financing travel of foreign terrorist fighters, direct funding of attacks, or channeling funds through legal persons and intermediaries. Assessors should consider both domestic and transnational cases and whether financial investigations are routinely integrated into counter‑terrorism procedures. The methodology asks for quantitative and qualitative evidence: numbers of investigations and prosecutions, the share of investigations that result in TF charges, case studies of significant prosecutions, and observed trends in TF methods and techniques. Importantly, where countries use non‑TF offences (for example, general proceeds of crime, fraud or money laundering statutes) to disrupt or punish the same conduct, assessors must evaluate whether that approach achieves the TF outcome or whether it masks weak TF enforcement.

Sanctions and deterrence

Sanctions imposed after TF convictions must be effective, proportionate and dissuasive. IO9 expects assessors to compare TF sentences and penalties with those for comparable crimes, looking at levels and consistency of punishment. The methodology also recognises that criminal prosecution is not always feasible. Where convictions for TF are impracticable, the use of other criminal, regulatory or administrative measures to disrupt financing activity should still contribute to the IO9 objective — provided those measures are used strategically, are aligned to risk, and their application is transparent and justifiable. Assessors should therefore weigh the impact of alternative measures (asset restraints, licensing restrictions, targeted financial measures) on the disruption of TF networks.

Bastian Schwind-Wagner _Follow

"Terrorist financing investigations must start from precise risk identification and timely access to financial intelligence. Prioritisation mechanisms that channel resources to major TF threats improve the chances of meaningful disruption and lead investigations toward prosecutable cases.

Effective prosecution and sanctioning require specialised capacity and legal tools that treat TF as a distinct criminal activity when appropriate. Where convictions are impracticable, well-designed alternative criminal or administrative measures can still disrupt financing networks and contribute to national counter‑terrorism goals."

Coordination and intelligence use across counter‑terror efforts

Effective TF enforcement relies on tight coordination among law enforcement, FIUs, prosecutorial services, counter‑terrorism units and intelligence agencies. IO9 emphasises the need for mechanisms that enable rapid sharing of financial intelligence and case information for both criminal prosecution and broader national security goals, such as identifying and designating terrorists or dismantling support networks. Assessors should examine whether intelligence gathered through TF probes is systematically fed into national counter‑terrorism strategies, used to inform designations, and leveraged to disrupt financing chains domestically and across borders.

International cooperation and cross‑border cases

TF often has a cross‑border dimension: funds, assets, facilitators and beneficiaries can span jurisdictions. The methodology instructs assessors to consider the assessed country’s engagement in international cooperation — whether authorities seek and obtain appropriate mutual legal assistance, share intelligence with foreign counterparts, and participate in joint investigations. Effective cross‑border coordination increases the chance of successful prosecutions and enhances the reach of sanctions and asset restraints.

Operational challenges and resources

IO9 asks hard questions about practical impediments: are prosecutors and investigators sufficiently resourced and trained to handle complex TF cases? Are there dedicated units or personnel for TF investigations, and if resources are shared, are prioritisation criteria transparent and aligned with TF risk? Assessors must also consider legal or procedural barriers that hinder TF prosecutions — evidence collection constraints, restrictions on use of intelligence in court, or gaps in financial investigation tools. Where such obstacles exist, even robust detection systems may fail to translate into convictions or meaningful disruption.

Measuring success: indicators and evidence

To determine whether the outcome is achieved, assessors use both quantitative indicators (numbers of TF investigations, prosecutions and convictions; sanctions imposed; timeliness of responses) and qualitative evidence (case studies showing financial investigations supporting terrorism prosecutions; examples where alternative measures achieved disruption). The methodology highlights the need to show how investigations identify financiers’ roles, how many cases are pursued under TF statutes versus other offences, and whether sanctions are comparable to penalties for similarly serious crimes.

Conclusions for policymakers and practitioners

Countries seeking to strengthen IO9 should ensure clear pathways from detection to prosecution:

• timely access to financial intelligence;
• specialised investigative and prosecutorial capacity;
• legal frameworks that allow TF to be prosecuted as a distinct offence when warranted; and
• proportionate sentencing regimes that deter offenders.

Where convictions are not feasible, jurisdictions must demonstrate that alternative criminal, regulatory or administrative measures effectively disrupt TF networks and are applied in line with assessed risk. Strong coordination among domestic agencies and active engagement with international partners are essential to address cross‑border financing. Finally, routine collection and analysis of TF case data and lessons learned should inform national counter‑terrorism strategies, enabling continuous improvement in detection, disruption and deterrence.

Dive deeper

• FATF ¦ The FATF Recommendations ¦ Link
• FATF ¦ Luxembourg’s measures to combat money laundering and terrorist financing ¦ Link