CPF (Counter Proliferation Financing)

Counter Proliferation Financing is increasingly recognised as a crucial component of financial crime prevention, alongside AML and CTF efforts. It focuses specifically on preventing the financing of activities related to nuclear, chemical, or biological weapons, as well as their means of delivery and related materials. For accountants, CPF obligations are often integrated with existing AML/CTF frameworks but require specific attention to different risk indicators and typologies.

The role of CPF has become more prominent as international authorities have recognised that proliferation networks often abuse legitimate business structures to facilitate their activities. Key aspects that accountants need to consider include:

• Monitoring for transactions involving dual-use goods (items that can have both legitimate and WMD-related applications)
• Screening clients against proliferation-related sanctions lists
• Being alert to transactions involving high-risk jurisdictions known for proliferation activities
• Understanding specific trade patterns and financial flows that might indicate proliferation financing
• Identifying front companies or complex ownership structures that might be used to disguise proliferation activities

Effective CPF measures require accountants to:

• Understand the nature of their client's businesses, particularly those involved in international trade
• Be familiar with export control regulations and restricted goods lists
• Maintain awareness of current proliferation financing typologies and risk indicators
• Apply enhanced due diligence to higher-risk clients and transactions
• Report suspicious activities that might be related to proliferation financing

This area of compliance is particularly relevant for firms dealing with clients involved in international trade, manufacturing, or technology sectors.

‍

‍