What is Terrorist Financing?

Blog / What is Terrorist Financing?

For more than a decade, terrorist financing has been a widespread financial crime that the authorities have been trying to destroy. One of the most important problems in world policy is terrorism financing. Terrorists need money for their activities. At this point, terrorist financing provides individual terrorists or non-state actors with training, accommodation, funds to buy weapons, or financial support.

How are Terrorism Funds Provided?

  • Money is obtained by illegal means. 
  • Money obtained by money laundering. For example, smuggling, drug trade, extortion, kidnapping, fraud. 
  • They use money laundering methods to use this illegally earned money more efficiently.

Anti-money laundering is key to Counter-Terrorist Financing. Financial institutions play an important role in combating the financing of terrorism because terrorists often rely on it, especially banks, to transfer money. Therefore, many laws and regulations have been enacted to prevent terrorist financing. It is known as counter-terrorist policies. According to these policies, financial institutions should know their customers closely. It must monitor and keep records of customers’ transactions. In this way, organizations can have sufficient information about their customers and ensure that their customers are not involved in financial crime. If funds are found to support terrorist activities, law enforcement agencies may prevent some of those activities.

THE FATF - Financial Action Task Force 

FATF (Financial Action Task Force) on the Prevention of Money Laundering was established in 1989 by G-7 countries. Comprising 35 governments and two regional organizations, FATF is working to combat money laundering and terrorism financing by creating standardized processes to stop threats to the international financial system. Terrorists can infiltrate the economic system of countries with weak controls. It is difficult to hide the financing of terrorism by establishing standard procedures. The FATF Standards require governments to take legal measures to ensure that the terrorism financing crime, which covers all elements stipulated by the Terrorism Financing Convention, is punished as a separate crime. Moreover, the FATF Standards reflect the measures created to counteract money laundering and ensure the private sector's implementation of preventive measures.

The Terrorism Prevention Branch (TPB) of the United Nations Office on Drugs and Crime (UNODC) works on the legal aspects of the relevant universal legal documents, countering terrorism financing. This law generally includes a review of internal legislation to ensure that Terrorism Financing (1999) and the appropriate punishment of crimes related to the implementation of these international standards, financing of terrorism and the draft legislation, and to improve the capacity of those concerned to investigate, prosecute and prosecute terrorist financing through specialized training.

AML Compliance Solutions

As stated in the regulations, terrorist financing is a crime that can have very bad consequences. These crimes are perceived as financial crimes such as money laundering. All institutions at risk of terrorist financing must comply with global and home country regulations, such as the FATF. Although compliance with these regulations seems complicated, compliance is now much easier by using AML solutions.

Sanction Scanner also offers solutions that facilitate companies' AML compliance. Protect your financial transactions and your customers with our Sanctions, PEP, and Adverse Media Screening tool. Ensure transparency in your business by regularly scanning the PEP and Sanction lists.

In the meantime, if you are having difficulty keeping track of financial affairs like a bank, meet the AML Transaction Monitoring solution of Sanction Scanner. With AML Transaction Monitoring, you can automatically detect high-risk and suspicious activities with your own rules and scenarios without any coding knowledge. Doing this process manually will save you time and increase your risk. By meeting the Sanction Scanner, you can easily integrate our AML solutions, save time, minimize your risk and comply with regulations.

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