According to the Wolfsberg Group's Statement on the Suppression of the Financing of Terrorism1, a compliance officer should include the following three procedures in revising an institution's CTF efforts:
* Consulting applicable lists and taking appropriate actions to determine if customers appear on such lists. This procedure is important to prevent terrorist organizations from accessing the financial services of the institution and to comply with the sanctions and regulations imposed by competent authorities.
The compliance officer should implement procedures for checking the customers against the lists of known or suspected terrorists or terrorist organizations issued by relevant authorities and taking reasonable and practicable steps to verify the identity and status of the customers.
* Reporting matches from lists of known or suspected terrorists to relevant authorities. This procedure is important to assist the authorities in their efforts to detect and disrupt terrorist financing and to fulfill the legal obligations of the institution. The compliance officer should report to the relevant authorities any matches from the lists of known or suspected terrorists or terrorist organizations consistent with the applicable laws and regulations regarding the disclosure of customer information.
* Maintaining customer information to facilitate timely retrieval of such information. This procedure is important to enable the institution to respond promptly and effectively to the enquiries and requests from the authorities and to enhance the quality and accuracy of the customer data. The compliance officer should explore ways of improving the maintenance of customer information to facilitate the timely retrieval of such information.
References:
* Wolfsberg Statement on Anti-Terrorism Financing
UNUSUAL CUSTOMER IDENTIFICATION CIRCUMSTANCES
* Customer furnishes unusual or suspicious identification documents or declines to produce originals for verification."

Money laundering can have negative effects on a country's currencies and interest rates, as it distorts the allocation of resources and the demand and supply of money. According to the IMF1, money laundering can also adversely affect currencies and interest rates as launderers reinvest funds where their schemes are less likely to be detected, rather than where rates of return are higher. This can create artificial fluctuations and imbalances in the exchange and interest rates, and undermine the effectiveness of monetary policy. For example, if launderers invest in low-yield assets such as government bonds or real estate, they may drive up the prices and lower the yields of these assets, while reducing the availability of funds for more productive investments. This can also affect the inflation and growth prospects of the country.
References:
* 1: Macroeconomic Implications of Money Laundering by Peter J. Quirk, IMF Working Paper, 1996
* 2: Understanding Money Laundering: How It Impacts the Global Economy by Tookitaki, 2019
* 3: Money Laundering by U.S. Department of the Treasury, 2021
* 4: The Consequences of Money Laundering and Financial Crime by John McDowell and Gary Novis, U.
S. Department of State, 2001

Explanation/Reference:

According to the FATF Procedures for the Fourth Round of AML/CFT Mutual Evaluations1, jurisdictions that are determined to have strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing are subject to the FATF's International Cooperation Review Group (ICRG) process. The ICRG process involves the following actions for such jurisdictions:
Demonstrate a high-level commitment to swiftly resolve the identified deficiencies in the FATF mutual evaluation report. This commitment should be made in writing to the FATF President and should include an action plan with specific deadlines and milestones to address the deficiencies.
Report to FATF on the implementation of their progress under the enhanced follow-up mechanism. The FATF will monitor the progress of the jurisdiction through regular reports and on-site visits, and will decide whether the jurisdiction has made sufficient progress to exit the ICRG process or whether further actions are required, such as public statements, counter-measures, or suspension of membership.
The other options are not resulting actions for jurisdictions with strategic deficiencies, as they are either not part of the FATF procedures or not consistent with the FATF's objectives and principles. For example, the FATF does not issue private statements regarding the level of compliance of a jurisdiction, nor does it allow a jurisdiction to appeal for a technical compliance re-rating based on its own criteria. The FATF also does not grant extensions of deadlines for jurisdictions to improve their regimes, as this would undermine the credibility and effectiveness of the mutual evaluation process.
References:
1: Mutual Evaluations - Financial Action Task Force
2: Procedures for the FATF Fourth Round of AML/CFT Mutual Evaluations
Reference:
https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitor