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Money Laundering and Financing of Terrorism (From Understanding and Responding to Terrorism, P 242-251, 2007, Huseyin Durmaz, Bilal Sevinc, et al., eds. -- See NCJ-224814)

NCJ Number
Suleyman Aydin
Date Published
10 pages
After noting the importance of financing for terrorist groups, this paper identifies the methods by which these funds are raised and funneled into terrorist activities, followed by recommendations for countering these methods.
Since financing is essential for terrorist groups to conduct their operations, one of their operational objectives is to establish an effective and enduring financial infrastructure. Toward this end, terrorist groups are continually looking for new financial sources, ways to conceal funds obtained, and ways to channel the funds to various operations. Sources of terrorist funds include conventional criminal activities, funds from wealthy individuals or institutions, states that benefit from terrorist activities, funds supplied by other groups, fees collected from members, racketeering, and commercial activities by bogus companies. In order to channel the money obtained from various sources to fund the purchase of weapons and other resources needed for terrorist operations, terrorists must hide the origin of their money as well as the criminal nature of the operations from which it comes and to which it goes. This involves money laundering. Some of the money-laundering methods used by terrorist organizations include alternative remittance (transmission of money or value through an informal money or value transfer system), wire transfers, nonprofit organizations, and cash couriers. This paper outlines the Financial Action Task Force’s Recommendations on Terrorist Financing, which address the aforementioned money-laundering methods, the ratification and implementation of United Nations Instruments, the criminalizing of the financing of terrorism and associated money laundering, the freezing and confiscation of terrorist assets, the reporting of suspicious transactions related to terrorism, and international cooperation. 18 references