How Terrorists Move Money Through Banks: Ways To Detect And Stop Terrorist Financing

The importance of combating terrorist financing

Terrorists need money and other assets, for weapons but also training, travel and accommodation to plan and execute their attacks and develop as an organisation. Disrupting and preventing these terrorism-related financial flows and transactions is one of the most effective ways to fight terrorism. Not only can it prevent future attacks by disrupting their material support, the footprints of their purchases, withdrawals and other financial transactions can provide valuable information for ongoing investigations.

Countering terrorism financing is therefore an essential part of the global fight against terror threat. As terrorists and terrorist groups continue to raise money with use of various means, countries must make it a priority to understand the risks they face from terrorist financing and develop policy responses to all aspects of it.

Terrorist Financing Operational Reports brochure

FATF's global efforts on combating terrorist financing

Combatting terrorist financing has been a priority for the FATF since 2001. However, in 2015, the scope and nature of terrorist threats globally intensified considerably, with terrorist attacks in many cities across the world, and the terrorist threat posed by the so-called Islamic State of Iraq and the Levant (ISIL/Da'esh), and by Al-Qaeda and their affiliated terrorist organisations.

Since then, the terrorism threats have continued to evolve, from large terrorist organisations, to returning terrorist fighters and right-wing extremists. Despite its loss of territory, ISIL continues to have access to resources enabling it to carry out or inspire terrorist attacks around the world. Al-Qaeda and affiliate terrorist organisations continue to pose threats. Funds flow cross-border to providing resources for nationally designated organisations, and many jurisdictions continue to suffer from persistent attacks from small cells and radicalised lone actors, drawing inspiration from a range of dangerous ideologies.

The FATF plays a central role in global efforts in combatting terrorist financing, through its role in setting global standards to combat terrorist financing, assisting jurisdictions in implementing financial provisions of the United Nations Security Council resolutions on terrorism, and evaluating countries' ability to prevent, detect, investigate and prosecute the financing of terrorism. Yet many countries have not yet implemented the FATF Standards effectively. They do not understand the nature of TF risks they face, nor have effective means to combat them.

The FATF Strategy on Combating Terrorist Financing sets out the broad objectives for FATF's work in this area. Under this strategy, the FATF, in close collaboration with the regional FATF-style regional bodies and other partners such as the UN, the FATF has completed work to support countries around the world in combatting terrorist financing.

		Improve and update theunderstanding of terrorist financing risks, in light of the dynamic way in which the risks are changing in different regions around the world. The understanding of risk is a key part of jurisdictions' counter-terrorist financing regime, as understanding the risks allows countries to allocate resources to detect or disrupt terrorist financing. Ethnically or Racially Motivated Terrorism Financing, July 2021 Terrorist Financing Risk Assessment Guidance, July 2019 Terrorist Financing Disruption Strategies , October 2018 Financing of Recruitment for Terrorist Purposes, January 2018 Terrorist Financing in Central and West Africa, October 2016 Emerging Terrorist Financing Risks, October 2015 Risk of Terrorist Abuse in Non-Profit Organisations, June 2014 Other typologies reports
		Ensure that the FATF Standards provide the framework for countries to be able to identify and disrupt terrorist financing activity. Key recent revisions have included the explicit inclusion of the need to criminalise the financing of travel for the purpose of the perpetration, planning, preparation of or participation in, terrorist acts, or providing or receiving terrorist training. FATF Recommendations 2012 , February 2012 (last updated October 2018) Methodology 2013 , February 2013 (last updated February 2019)
		Ensurecountries are appropriately and effectively implementing the FATF Standards, to identify and disrupt terrorist financing activity. This includes guidance (both public and confidential) to help public and private sectors effectively implement these tools. Guidance on Criminalising Terrorist Financing, October 2015 Best Practices Paper on Combating the Abuse of Non-Profit Organisations (Recommendation 8), June 2015 Mutual Evaluation Reports, in particular Recommendations 5-9, Immediate Outcomes 9-10
		Identify and take measures in relation to any countries with strategic deficiencies for terrorist financing. Global safeguards to combat terrorist financing are only as strong as the jurisdiction with the weakest measures, with terrorist financiers able to circumvent weak AML/CFT controls to successfully move assets to finance terrorism through the financial system. A key objective of the FATF is to continually identify jurisdictions with significant weaknesses in their AML/CFT regimes, and to work with them to address those weaknesses. High-risk and other monitored jurisdictions
		Promote moreeffective domestic coordination and international cooperation to combat the financing of terrorism. This includes the FATF working closely with the FATF Regional bodies, and other key partners such as the UN. Consolidated standards on information sharing , November 2017 Private Sector Information Sharing, November 2017 FATF President's Paper: Anti-money laundering and counter terrorist financing for judges and prosecutors, June 2019

Key statements:

21 October 2021 - FATF Public Statement on the Financing of ISIL, Al Qaeda and Affiliates
21 October 2021 - FATF Public Statement on the Situation in Afghanistan
21 June 2019 - FATF Actions to Identify and Disrupt ISIL, Al-Qaeda and Affiliates' Financing
22 February 2019 - Current Efforts by the FATF to Monitor and Take Action against Terrorist Financing
23 February 2018 - FATF Actions taken under the 2016 counter-terrorist financing operational Plan
14 December 2015 - the FATF leads renewed global effort to counter terrorist financing
27 February 2015 - FATF Action on terrorist finance
14 October 2014 - FATF Action on the terrorist group ISIL