Terrorist financing

Terrorism financing refers to activities that provides financing or financial support to individual terrorists or terrorist groups. A government that maintains a list of terrorist organizations normally will also pass laws to prevent money laundering being used to finance those organizations.

Laws against money laundering and terror financing are used around the world. In the United States, the Patriot Act was passed after the September 11 attacks, giving the government anti-money laundering powers to monitor financial institutions. The Patriot Act has generated a great deal of controversy in the United States since its enactment. The United States has also collaborated with the United Nations and other countries to create the Terrorist Finance Tracking Program.

Laws attempt thwarted the financing of terrorism (CFT) and anti-money laundering. Initially the focus of CFT efforts was on non-profit organizations, unregistered money services businessess (MSBs) (including so called underground banking or ‘Hawalas’) and the criminalisation of the act itself. The Financial Action Task Force on Money Laundering (FATF) made nine special recommendations for CFT (first eight then a year later added a ninth). These nine recommendations have become the global standard for CFT and their effectiveness is assessed almost always in conjunction with anti-money laundering.

The FATF Blacklist (the NCCT list) mechanism was used to coerce countries to bring about change.

Often linked in legislation and regulation, terrorism financing and money laundering are conceptual opposites. Money laundering is the process where cash raised from criminal activities is made to look legitimate for re-integration into the financial system, whereas terrorism financing cares little about the source of the funds, but it is what the funds are to be used for that defines its scope.

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Wikipedia