Terrorism financing

Terrorism financing is an activity that provides financial support to designated terrorist groups. A government that maintains a list of designated terrorist organizations will also use 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 other powers, like the European Union, creating the Terrorist Finance Tracking Program.

Laws attempt thwarting the financing of terrorism (CFT) and anti-money laundering (AML). 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.