40 FATF 40 Recommendations
7

Recommendation 7 · Group C · Terrorist Financing & Proliferation

Targeted sanctions — proliferation

Recommendation 7 requires every country to implement targeted financial sanctions to comply with United Nations Security Council resolutions on the prevention, suppression and disruption of proliferation of weapons of mass destruction and its financing — most notably resolutions targeting North Korea (DPRK) and Iran. Designated persons and entities must have their funds frozen without delay, and providing funds or financial services to them is prohibited.

Who must comply?

  • Banks, financial institutions and DNFBPs
  • Virtual Asset Service Providers (VASPs)
  • Customs, export control authorities, immigration
  • Government bodies responsible for sanctions implementation

Key requirements

  1. 1

    Implement UN proliferation-financing sanctions

    Countries must freeze, without delay, funds or other assets of persons and entities designated under UNSC resolutions on proliferation — including DPRK-related (1718, 1874, 2087, 2094, 2270, 2321, 2371, 2375, 2397) and Iran-related (2231) regimes.

  2. 2

    Coverage of indirect ownership and control

    Sanctions apply to assets owned or controlled directly or indirectly, wholly or jointly, by designated persons — including assets held by entities that are themselves owned or controlled by designated parties.

  3. 3

    Prohibition on providing funds or services

    Nationals and persons within the jurisdiction must not make any funds, financial assets, economic resources or related services available to designated persons or entities, except under UN-authorised humanitarian or basic-needs exemptions.

  4. 4

    Sectoral controls

    Beyond targeted sanctions on persons, countries must enforce sectoral measures including bans on dual-use goods, restrictions on correspondent banking with designated jurisdictions, and limits on insurance and reinsurance for proliferation-related transactions.

  5. 5

    Risk-based sanctions evasion mitigation

    Countries and obliged entities must identify and mitigate the risk of proliferation-financing sanctions evasion — including the use of front companies, complex ownership structures, trade-based misinvoicing and sanctions-evading shipping and insurance practices.

  6. 6

    Communication and screening

    The same screening, freezing and reporting infrastructure as Recommendation 6 applies — designated lists must be communicated to obliged entities and screening must occur in real time.

Practical example

Example: shipping fuel to a DPRK-linked vessel

A Mexican fuel-trading company receives an order routed through a Singapore intermediary. The system flags the ultimate consignee — a vessel name found on the UN 1718 Committee designation list as DPRK-linked. The transaction is blocked, no funds change hands, and the case is reported to the UIF within 24 hours. The Singapore intermediary is also reported because Recommendation 7 covers indirect dealings. Without this screening the trader could face enormous penalties from OFAC, the UN sanctions committee and Mexico's domestic AML supervisor.

How Mexico implements it

Country-specific section in Spanish — Mexican regulatory references (LFPIORPI, CNBV, SAT, UIF).

México implementa la R.7 mediante un esquema integrado con la R.6:

Lista de Personas Bloqueadas (LPB) — incluye proliferación

La LPB de la SHCP incorpora designaciones de los regímenes ONU sobre RPDC e Irán. Cotejo obligatorio para todos los sujetos obligados, sin distinción entre R.6 (terrorismo) y R.7 (proliferación).

Controles de exportación de bienes de uso dual

La Secretaría de Economía y la Secretaría de la Defensa Nacional regulan exportaciones de bienes y tecnologías de uso dual susceptibles de uso militar o de proliferación.

Cooperación internacional

México participa en regímenes multilaterales (Grupo de Australia, Régimen de Control de Tecnología de Misiles, Grupo de Suministradores Nucleares) y comparte información vía R.40 (otras formas de cooperación internacional).

Milestones

  1. 2008

    FATF mandate expanded to include proliferation financing

  2. 2012

    Recommendation 7 created in the consolidated framework

  3. 2017

    Updated to incorporate UNSC resolution 2375 (DPRK)

  4. 2020

    Linked to Recommendation 1 risk-assessment carve-out

  5. 2025

    October 2025 update tightens sanctions-evasion mitigation expectations

Related Recommendations

Other Recommendations in Group C — Terrorist Financing & Proliferation

5 R.5 Terrorist financing offence 6 R.6 Targeted sanctions — terrorism 8 R.8 Non-profit organisations

Official citation

FATF (2012-2025), International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation, Recommendation 7, FATF, Paris, France. Last updated October 2025.

Read the official text on fatf-gafi.org