Officially, the FATF rarely threatened punishment against listed countries; such efforts were reserved for major problems such as North Korea and Iran. Unofficially, however, the list was a signal for global banks. Listed countries began to face higher banking costs or delays in trade financing. The FATF might have called for few explicit consequences, but banks were stepping in to enforce FATF standards. Panama’s listing, for example, led some international banks to suspend their relations with Panamanian banks. In Thailand, the country’s listing meant diplomats struggled to cash checks.

So while defense officials were planning and carrying out invasions in Iraq and Afghanistan, Treasury officials were busy transforming the financial system into a place where banks everywhere would screen for illicit flows.

In 2009, more than 80 percent of countries had either no laws criminalizing terrorist financing, or laws with significant holes. Today, nearly every country has a complete legal framework in place. The FATF accomplished what law and unilateral coercion could not: a drastic shift in the way countries approach terrorist financing.