Combatting financing of terrorism

The meaning of Terrorism

Whilst no acceptable international definition on terrorism exists, it is generally described as the execution of acts of violence against persons or property, or a threat to use such violence, with the intent to intimidate or coerce a Government, the public, or any section of the public to achieve or promote any tribal, ethnic, racial, political, religious or ideological objectives.

What is financing of terrorism?

Financing of terrorism involves the provision of funds to commit terrorism or terrorist activity. It may involve funds raised from legitimate sources, such as personal donations and profits from businesses and charitable organizations, as well as funds derived from criminal activity, such as drug trafficking, illegal diamond smuggling, the smuggling of weapons and other goods, fraud, kidnapping and extortion.

How is financing of terrorism committed?

Terrorists use techniques similar to those used by money launderers in order to evade the attention of the authorities and to protect the identity of their sponsors and of the ultimate beneficiaries of the funds. Financial transactions associated with terrorist financing tend to be in smaller amounts than is the case of money laundering, and when terrorists raise funds from legitimate sources, the detection and tracking of these funds are difficult. Those involved in acts of terrorism or financing of terrorism, move their funds by using the formal banking system, money transfer services, informal value-transfer systems like the Hawalas and Hundis and the physical cross border transportation of cash, uncut diamonds, gold and other valuables. Some countries reported that, in what seems to be an effort to conceal the final destination of funds suspected of being used for terrorist financing, money is moved to countries that has major financial hubs.