01481 225824 fiu@gba.gov.gg

What is Terrorist Financing?

Terrorist financing provides funds for terrorist activity. It may involve funds raised from legitimate sources such as personal donations and profits from businesses and charitable organisations, as well as from criminal sources such as, drug trafficking, fraud, smuggling of weapons and other goods, kidnapping and extortion.

Terrorists use techniques like those of money launderers to evade authorities' attention and to protect the identity of their sponsors and the ultimate beneficiaries of the funds. Terrorist financing may also be directly linked to money laundering if the proceeds of crime are used to fund terrorist activities.  However, financial transactions associated with terrorist financing tend to be in smaller amounts than is generally the case with money laundering. When terrorists raise funds from legitimate sources the detection and tracking of these funds becomes more difficult.

To move their funds terrorists use; the formal banking system, informal value-transfer systems, Hawalas and Hundis and, the oldest method of asset-transfer, the physical transportation of cash, gold and other valuables through smuggling routes.

The face of terrorism has changed over recent years. The nature of attacks has become simpler with the emergence of terrorist cells and the lack of essential intricate networks and command structures seen with organised terrorist groups.

The more recent attacks are lone actors or small cells and Financial Intelligence Units can be crucial in identifying or detecting the purchases of materials that could be used in a terrorist attack. Financial indicators help detect relevant transactions prior to an attack.

Share this page