The Expanding Scope of Financial Crime Compliance Training

For decades, financial institutions have released enterprise-wide, mandated compliance training focused on two core pillars: anti-money laundering (AML) and countering the financing of terrorism (CFT). But as regulatory expectations have evolved, many of these programs have not evolved with them.

A Gradual Shift Has Become an Explicit Expectation

For years, the international community has increasingly incorporated a third area of focus: countering the financing of proliferation (CPF).

• ➤In 2004, the United Nations Security Council adopted Resolution 1540, establishing binding obligations on all states to prevent non-State actors from acquiring nuclear, chemical or biological weapons and their means of delivery. The resolution also requires states to establish domestic controls to prevent proliferation, including controls over related materials and financing that could contribute to proliferation.
• ➤The Financial Action Task Force (FATF) officially expanded its mandate to include countering proliferation financing in 2008, with Recommendation 7 establishing the international standard for targeted financial sanctions relating to the proliferation of weapons of mass destruction.
• ➤In 2020, FATF strengthened the broader risk-based framework by amending Recommendation 1 to require countries, financial institutions and designated non-financial businesses and professions to identify, assess and mitigate risks relating to the potential breach, non-implementation or evasion of proliferation-financing targeted financial sanctions.
• ➤FATF’s 2021 PF guidance explicitly says PF risks can be distributed differently from ML/TF risks and may require supervisors to look at different business units and products than they traditionally examine for AML/CFT. It also calls for regular, in-depth PF training.

Activity in global jurisdictions reflect this focus:

• ➤In 2011, France became one of the first states to specifically criminalize proliferation financing, establishing offenses covering the financing of proliferation involving nuclear, biological and chemical weapons. France subsequently developed its approach further, including through national assessment of proliferation financing risks and engagement with the private sector.
• ➤In 2018, the U.S. Department of the Treasury issued its first National Proliferation Financing Risk Assessment (NPFRA), examining the methods, threat actors and vulnerabilities associated with proliferation financing and its potential exploitation of the U.S. financial system. Treasury subsequently issued updated NPFRA assessments in 2022, 2024, and 2026, demonstrating that PF has been an established component of the U.S. government’s illicit finance risk framework for years.
• ➤Singapore incorporated proliferation financing into its statutory AML/CFT framework in 2019. The Precious Stones and Precious Metals Act 2019 expressly addressed the prevention of money laundering, terrorism financing and the financing of proliferation of weapons of mass destruction. Singapore’s framework has continued to develop since then, with PF now incorporated into the country’s broader AML/CFT/CPF supervisory and risk management framework. Singapore’s 2025 CPF industry best practice paper provides financial and non-financial institutions with PF typologies, risk factors and mitigation practices.
• ➤In 2020, the UAE established requirements for implementing UN Security Council resolutions concerning terrorism, terrorist financing, and the proliferation of WMD and its financing. In 2021, the UAE amended AML law and the UAE’s broader framework continued to incorporate proliferation-related obligations. In 2023, the CBUAE issued Notice No. CBUAE/BIS/2023/5960, under which licensed financial institutions were expected to conduct institutional-level risk assessments that included PF risks. On November 7, 2025, the CBUAE’s dedicated Counter-Proliferation Financing Guidance became effective. It explicitly addresses PF risk assessment, risk-based mitigation, and the distinction between ML, TF and PF. Federal Decree-Law No. 10 of 2025 went further by expressly addressing AML, CFT and proliferation financing in the UAE’s federal legislation, with its implementing regulation effective December 14, 2025.
• ➤The UK published its first National Risk Assessment of Proliferation Financing in September 2021, identifying PF risks and vulnerabilities within the UK. In September 2022, amendments to the Money Laundering Regulations formally required relevant businesses to conduct their own PF risk assessments and establish policies, controls and procedures to manage those risks. HM Revenue & Customs’ updated guidance, published in July 2026, states that supervised businesses must identify and assess the risks of money laundering, terrorist financing and proliferation financing and use those assessments to inform their policies, controls and procedures.

Annual Training Programs Need to Keep Pace

While international standards and regulatory expectations have evolved to encompass AML/CFT/CPF, annual compliance training programs at financial institutions often do not reflect that broader framework.

Over the past several years, financial institutions across multiple jurisdictions have identified gaps in proliferation financing training as part of their regulatory remediation efforts. In our work supporting financial institutions around the world, IFI has seen a consistent pattern: institutions with established AML/CFT training programs are expected to strengthen their coverage of PF—and are turning to dedicated training to address those gaps.

Many organizations provide employees with foundational AML/CFT training but little or no foundational education on PF. Others may mention PF at a high level but treat it primarily as a sanctions screening issue.

CPF is not simply another sanctions screening exercise.

PF can involve legitimate-looking trade, companies, financial institutions, intermediaries and dual-use goods. The funds themselves do not necessarily represent criminal proceeds, which makes the risk fundamentally different from money laundering. Likewise, the financing may have no obvious connection to a terrorist organization.

FATF’s own guidance calls for regular and in-depth training on PF risks, highlighting that PF risks can be distributed differently from ML and TF risks across institutions, business units and products. As a result, effectively addressing PF may require attention to areas of an institution that differ from those traditionally emphasized in AML/CFT programs.

Why This Matters Beyond the Sanctions or Compliance Team

A bank employee in payments, trade finance, onboarding, relationship management, operations or customer service may encounter information relevant to PF risk. They don’t need to become specialists but they should understand:

• ✓ What proliferation financing is
• ✓ How it differs from ML and TF
• ✓ What PF typologies and red flags can look like
• ✓ How sanctions evasion can intersect with PF
• ✓ Why seemingly legitimate transactions can present PF concerns
• ✓ When and how to escalate a concern

As the financial crime compliance landscape evolves, annual training programs must evolve with it. Employees across the institution need to understand not only money laundering and terrorist financing, but also how the institution could be exploited to facilitate proliferation financing.