In the UK, Part 3 of the Terrorism Act 2000 criminalises terrorist financing and makes it an offence to:
use, possess, or raise funds for the purposes of terrorism, or enter into arrangements to provide funds or property for that purpose.
The Anti-Terrorism Crime and Security Act 2001 allows for the seizure of terrorist cash.
Terrorists need money, not only to fund attacks but also to fund the travel, false documents, safe houses, food, bribery, training, and recruitment which a terrorist organisation needs to function.
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 the drug trade, the smuggling of weapons and other goods, fraud, kidnapping and extortion.
Sources of Terrorist Funding
Terrorist financing may originate from both legitimate business and criminal activity, some examples:
Donations from wealthy individuals and companies
Community solicitation and fundraising appeals in the name of charitable, relief or religious organisations
Proceeds derived from legitimate commercial enterprises
Gifts from family members
Proceeds from seemingly unrelated criminal enterprises
Remember that both Money Laundering and Terrorist Financing involve the movement of money in such a way as to separate the source and ultimate destination of funds.
Example Methods of Money Laundering and Terrorist Financing
Cash Structuring - “Smurfing”
Cross-Border Bulk Cash Smuggling
Mingling of Illicit and Legitimate Funds Rapid Movement of Funds
Trade Based (Overvaluing/Undervaluing goods)
Hawala (Alternative Remittance Systems)