The Role of the UN Security Council in the Context of Combating Money Laundering and the Financing of Terrorism

Griaznov Artem Student, Department of International Law, Russian Foreign Trade Academy 119285, Russia, Moscow, Vorobyovskoe highway, 6A GryaznovArtemE@yandex.ru

Until 2001, the United Nations (UN) system paid very limited attention to the problems of terrorism and money laundering. Terrorism, which was of a national nature ^[1], was not on the agenda in the UN Security Council (UNSC) and was mainly under the jurisdiction of the Sixth (legal) The Committee of the United Nations General Assembly (UNGA). Closer to the 1990s, the situation began to transform — the number of victims of terrorist attacks increased, and terrorism acquired a global character. In 1989, after the Lockerbie terrorist attack, the international community reacted to the terrorist act for the first time by a decision of the UN Security Council. On June 14, 1989, Resolution 635 "Marking plastic or sheet explosives for the purpose of detection" was adopted, where terrorism was declared a "threat to international security". Despite the very restrained reaction of the Security Council, this document can be considered a breakthrough, since it is thanks to it that the UN will subsequently embark on a full-fledged path of the war on terrorism ^[2] and begin to realize its statutory goals in a new guise.

The terrorist acts committed by Al-Qaeda militants on September 11, 2001 in the United States gave a strong impetus to the development of international anti-terrorism law and attracted the special attention of the world community to countering money laundering and terrorist financing (AML/CFT). Measures to prevent money laundering, developed in the 1990s by the Financial Action Task Force on Money Laundering (FATF), were subsequently transformed into international AML/CFT standards. The FATF, which previously dealt exclusively with the problem of money laundering after the attacks on the US embassies in Kenya, Tanzania and the September 11 attacks, expanded its mandate, transforming into an organization that also counteracts international terrorism. One of the crucial roles of the FATF in the fight against terrorism and money laundering was subsequently recognized by the UN.

The role of the Security Council in the context of the global AML/CFT system has previously been studied by one of the leading experts in this industry, Professor Norman Mugarura, who gave in his article "An Appraisal of United Nations and Other Money Laundering and Financing of Terrorism Counter—Measures" a brief overview of the main UN Security Council resolutions on money laundering and terrorist financing He noted the relationship between the documents of this organization and the popularization of the 40+9 FATF Recommendations, but overlooked the activities of the subsidiary bodies of the Security Council. Hilde Haland Kramer and Steve A. Yetiv, who traced the transformation of the UN Security Council after the Lockerbie terrorist attack in the work "The UN Security Council's Response to Terrorism: Before and After September 11, 2001", did not fully disclose the legal side of the issue due to the political nature of the study. At the same time, it should be recognized that, since more than 10 years have passed since the writing of these works, some of the arguments given in the articles have lost their relevance and should be adjusted.

In the context of this article, it is advisable to clarify once again the main features of the legal status of the UN Security Council and recall the fundamental goals of its functioning. In accordance with Article 24 of the UN Charter, the Security Council, as the backbone organ of this international organization, performs functions for the maintenance of international peace and security and, according to Article 39 of the Charter, determines the existence of any threat to peace, any violation of peace or act of aggression and makes recommendations or decides what measures should be taken to maintain or restore international peace and security. It is important to note that the decisions of the UN Security Council in accordance with Article 25 of the Charter are binding sources of international law. As noted in the academic literature, the inability of the relevant state to fulfill its obligations under the UN Charter may become a pretext for the application of economic and military sanctions against this country ^[3]. However, non-compliance by the state with such soft-law norms as the FATF Recommendations, although formally not a violation of international law, but in practice contribute to the emergence of tension in relations between countries. Thus, the deterioration of the state's position as a participant in the international economic system may lead to its inclusion in the "black" and "gray" FATF lists.

After the terrorist attacks in Nairobi and Dar es Salaam in 1998, for which the United States blamed Osama bin Laden and the Taliban, the UN Security Council adopted Resolution 1267 (1999), according to which the "1267 Committee" was established. The provisions of Resolution 1267 (1999), the work of the Committee and the norms of Resolution 1333 (2000) subsequently adopted by the Security Council are aimed at freezing the assets of the Taliban, Osama bin Laden, Al-Qaeda and others identified by the Committee. In order to simplify the mechanism for the implementation of these documents, on July 30, 2001, the UN Security Council adopted Resolution 1363. This source of international law creates mechanisms for the implementation of Resolutions 1267 and 1333, establishes a monitoring group of five experts accountable to the 1267 Committee and 15 sanctions compliance specialists. Article 8 of the Document, among other things, contains an insistent call on UN member States to implement, through legislative or administrative mechanisms, measures to implement the norms introduced by the aforementioned Resolutions.

However, as noted in a number of academic sources ^{[2, 4]}, it is Resolution 1373, which became the reaction of the world community to the September 11 attacks, that is the second breakthrough document adopted by the UN Security Council in order to combat terrorism. This decision of the Security Council radically contrasted with the 13 conventions previously adopted by the UN General Assembly, since it imposed a number of uniform mandatory obligations on all states, seriously limiting the financing of terrorism and money laundering. In accordance with the Resolution and Chapter 7 of the UN Charter, States undertake to prevent and suppress the financing of terrorist acts, undertake to criminalize the intentional provision or collection of funds with the intention or with the knowledge that such funds may be used to commit terrorist acts. In addition, States block funds and other financial assets or economic resources of those persons who commit or attempt to commit terrorist acts, or participate in the commission of terrorist acts, facilitate their commission, organizations owned or controlled by other persons, as well as other persons and organizations. According to subparagraph (d) of paragraph 1 of the Resolution, the UN Security Council decides that States are obliged to prohibit their citizens from providing any funds or assets, relevant economic funds or financial services for use in the interests of persons who commit or attempt to commit terrorist acts, or assist or participate in their commission.

Interestingly, UN Security Council Resolution 1373 not only established a fairly wide list of obligations of states, but also established, in accordance with paragraph 6 of the Resolution, an appropriate supervisory body — the UN Security Council Counter-Terrorism Committee (CTC) ^[5].

The Committee consists of all Council members and oversees the implementation of the provisions of Resolution 1373. According to paragraphs 6 and 7, the CTC determines its own tasks within 30 days from the date of adoption of the document, as well as develops programs for a period of 90 days for the implementation of the Resolution.

However, Resolution 1373 is often criticized for not explicitly stating the strict need to respect human rights. Academic sources indicate that the absence of the concepts of "terrorism" and "terrorist act" in the document creates the basis for the introduction by States of openly discriminatory measures against their own citizens. In his work "Anti-Terrorism Resolutions: The Security Council's Threat to the UN System" Fraser Galloway points to the Indian experience of implementing Resolution 1373. The 2002 Law on the Prevention of Terrorism, adopted in hot pursuit, led to multiple human rights violations, including discrimination against national and religious minorities, restrictions on the right to freedom of speech and assembly, illegal detention and other infringements ^[6].

Subsequently, statements were made within the framework of the UN Security Council CTC that verification of compliance with international norms in the field of human rights protection goes beyond its powers, and the Committee is unable to define international terrorism, since this would also be considered interference with the competence of other UN bodies.

At the same time, the Committee still plays a significant role in the international system of countering money laundering and terrorist financing.

The activities of the UN Security Council CTC on interaction with states are reduced to three main stages:

1. Verification of the existence of effective national anti-terrorism legislation related to the implementation of the provisions of Resolution 1373;

2. Direct implementation of the provisions of Resolution 1373 to prevent active and passive support for terrorists and relevant groups, including through the creation of law enforcement, intelligence, customs, immigration and other services;

3. Study of progress on the implementation of the norms of the Resolution by the Committee ^[7].

The Work Programme of the Counter–Terrorism Committee for the period October 1 - December 31, 2003 (S/2003/995) is recognized as one of the most significant programs within the framework of the UN Security Council CTC. According to paragraph 2 (b) of the Programme, the Chairman undertakes to provide a report on the problems faced by States and the Committee itself in implementing Resolution 1373 (2001). On January 26, 2004, the report of the Chairman of the CTC was published, in which it was concluded that in implementing the Resolution, this subsidiary body of the UN Security Council faces a number of serious problems both at the state level and at the level of the CTC itself.

Subsequently, CPC Chairman Inocencio F. Arias provided a Proposal to revitalize the work of the CTC (S/2004/124), where he proposed not only to reform the structure of the subsidiary body by adding an Executive Directorate (CTED) to the structure of the CTC, but also to expand the mandate of the Committee.

According to the reference information of the Russian Foreign Ministry (Ministry of Foreign Affairs of the Russian Federation: [website]. URL: https://www.mid.ru/ru/foreign_policy/un/prochie_programmy_i_organy_oon/1603231 /) , at the moment , the work of the CTC and the CTED covers the following areas:

1. Monitoring progress on the implementation of the provisions of Resolution 1373 (2001);

2. Providing technical assistance in connecting to existing technical, financial and regulatory assistance programs;

3. Listening to country reports in order to obtain a complete picture of the situation in the field of counter-terrorism;

4. Encouraging countries to apply best practices in combating terrorism;

5. Assistance in the development of interaction.

The CTC's mandate covers specific areas of concern in the field of countering terrorism, including counter-terrorism strategy, combating the financing of terrorism, border protection and illegal arms trafficking, law enforcement, legal aspects of counterterrorism, human rights, integrating gender perspectives into counterterrorism, countering violent extremism and terrorist narratives, information and communication technologies, cybersecurity and countering foreign fighters.

The CTED plays the role of a coordinating body and, in carrying out its tasks, closely cooperates with relevant UN Security Council units and other international institutions, including the Financial Action Task Force on Money Laundering (FATF) and FATF-type regional bodies (ROTF).

In addition to the CTED, the Committee has a Technical Assistance Group that supports the ratification of international conventions, and a Group of independent experts that contributes to the implementation of the CTC's functions in the field of drafting bills, customary law and analysis of law enforcement practice.

At the same time, representatives of the international community at the UN have laid down a number of exceptions in international counter-terrorism law that limit the mass use of anti-terrorist measures. UN Security Council Resolution 1452 (2002) provides for a mechanism for member countries to release certain funds and other economic resources necessary to "cover basic expenses, including food, rent or mortgage, medicines and medical care," etc.

Subsequently, after the adoption of Resolution 1526 (2004), Member countries committed themselves to stemming the flow of funds to international terrorist groups, taking into account international codes and standards in the field of combating the financing of terrorism. In particular, the academic literature mentions that in this way the participating countries were strongly recommended to implement 40+9 FATF Recommendations ^[3].

According to the CTED Newsletter "Countering the Financing of Terrorism (CFT)" (URL: https://www.un.org/securitycouncil/ctc/sites/www.un.org.securitycouncil.ctc/files/ctc_cted_factsheet_cft_oct_2021.pdf) , one of the systemically important documents of the international AML/CFT system is UN Security Council Resolution 2462 (2019). The document emphasizes the central role of the UN Security Council in the fight against terrorism and focuses significant attention on the role of the FATF in setting global standards for AML/CFT/FMT and the role of the ROTF, as well as "urges all states" to comply with international standards enshrined in the 40 FATF Recommendations. Previously, the UN Security Council has repeatedly recommended that States implement the FATF recommendations in a number of documents, starting with Resolution 1617 (2005), where, in paragraph 7, it "urges all Member States to comply with comprehensive international standards embodied in the 40 recommendations of the Financial Action Task Force (FATF) on money laundering, and in 9 special FATF recommendations related to the financing of terrorism." Subsequently, the UN Security Council repeatedly repeated its calls in Resolutions 2253 (2015), 2368 (2017), 2395 (2017) and 2462 (2019).

Resolution 2462 (2019) provided the CTED with the tools necessary to properly assess the efforts of States to counter the financing of terrorism. Starting in 2021, the CTED, together with the UN Counter-Terrorism Office, prepares annual reports on identified gaps and areas requiring more active action to implement key provisions of relevant UN Security Council resolutions. At the time of writing, the CTED has prepared two such documents — in December 2021 and 2022. The annual reports aim to develop technical assistance and capacity-building measures by the international community and States.

Thus, it can be concluded that the UN Security Council has had a tremendous impact on the international system for countering money laundering and terrorist financing. The Security Council has significantly contributed to the development of interstate cooperation in this area and created a mechanism for the implementation of the established legal regimes in national jurisdictions. Soft-law norms developed by many international institutions have become widespread and, through UN Security Council resolutions, have been transformed into generally recognized international standards. Moreover, according to a number of researchers, due to interaction with binding international treaties, these soft-law norms may subsequently "lose their "soft-law" nature and become part of the legal system ^[8]." The refusal of the UN Security Council to define terrorism, a terrorist act and finally transform recommendatory norms into norms of solid law may be justified by the desire to preserve the flexibility of international law ^[9].

Nevertheless, it seems that the efforts of the member States within the framework of the UN Security Council have significantly contributed to the harmonization of national legislation in the field of AML/CFT and the development of appropriate international legal instruments to ensure the proper response of the international community to modern threats to peace. As international terrorism develops and new ways of laundering criminal proceeds are found, the UN Security Council will adopt more and more resolutions that keep pace with the times and respond to the most pressing challenges facing international security. There is no doubt that the documents of this body will also reflect the experience and the most advanced recommendations of international organizations, para-organizations and other institutions countering money laundering and terrorist financing. We can agree with the argument given above and note a certain tendency towards the "crystallization" of recommendations in this area. Given the level of international recognition that the FATF Recommendations have received, for example, there is a possibility of their withdrawal from the status of recommendation norms and consolidation as imperative. In any case, such widespread application of these international standards is one of the most important achievements of the UN Security Council in the context of AML/CFT.