T errorists require money to operate.

Without funding, they cannot purchase weapons, equipment,

supplies, or services. The source of terrorist funds may be licit or illicit, and funding often takes the form
of multiple small donations, rather than one large sum of money. Terrorist groups may be directly or
indirectly linked to organized criminal groups and may engage in criminal activities, including drugs or
arms trafficking, extortion, and kidnapping for ransom. Terrorism financing is a global phenomenon that
not only threatens Member States’ security, but can also undermine economic development and financial
market stability. It is therefore of paramount importance to stem the flow of funds to terrorists.

Building on the International Convention for the Suppression of the Financing of Terrorism (1999),
Security Council resolution 1373 (2001), calls on States to prevent and suppress the financing of
terrorism, inter alia, by criminalizing the collection and provision of funds for terrorist purposes, and urges
them to set up effective mechanisms to freeze funds and other financial assets of persons involved in or
associated with terrorism, as well as to prevent those funds from being made available to terrorists. The
Financial Action Task Force (FATF) has also developed detailed recommendations on countering
terrorism financing. The significant sums raised by terrorist organizations such as the Islamic State in
Iraq and the Levant (ISIL, also known as Da’esh) and the funding of foreign terrorist fighters (FTFs)
underscore the importance of targeting terrorist resources. In its resolution 2178 (2014), the Security
Council urges Member States to disrupt terrorist-financing activities linked to FTFs and to criminalize the
finThe freezing of terrorist assets is a highly effective way for Member States to stem the flow of funds. It
can also act as a deterrent to further engagement in terrorist activity. However, in conducting
assessments on behalf of the Counter-Terrorism Committee, the Counter-Terrorism Committee Executive
Directorate (CTED) has become aware of the many challenges faced by Member States in implementing
effective freezing mechanisms. As a facilitator of technical assistance delivery, CTED organizes expert
workshops around the world to help States establish effective freezing mechanisms that are consistent
with international standards and obligations, including relevant human rights obligations. CTED also helps
States to counter the misuse of non-profit organizations (NPOs) and alternative remittance systems
(ARS) for terrorist-financing purposes and to detect and prevent illicit cross-border transportation of
currency (a significant problem in cash-based economies).

In order to tackle terrorism financing effectively, it is essential that Member States cooperate regionally
and internationally, including through the exchange of operational information by relevant entities,
especially national financial intelligence units (FIUs). It is also essential that investigation of terrorism
cases at the national level include the terrorist-financing element.

In carrying out its tasks, CTED works closely with relevant United Nations entities and coordinates its
activities with those of external partners, including FATF and the FATF-Style Regional Bodies (FSRBs).
Within the framework of the Counter-Terrorism Implementation Task Force (CTITF), CTED is a member of
the Working Group on Countering the Financing of Terrorism.
Terrorist Financing
The importance of combating terrorist
financing
Terrorists need money and other assets, for weapons but also
training, travel and accommodation to plan and execute their
attacks and develop as an organisation. Disrupting and preventing
these terrorism-related financial flows and transactions is one of
the most effective ways to fight terrorism. Not only can it prevent
future attacks by disrupting their material support, the footprints of
their purchases, withdrawals and other financial transactions can
provide valuable information for ongoing investigations.
Countering terrorism financing is therefore an essential part of the
global fight against terror threat. As terrorists and terrorist groups
continue to raise money with use of various means, countries must
make it a priority to understand the risks they face from terrorist
financing and develop policy responses to all aspects of it.

FATF’s global efforts on combating terrorist financing

Combatting terrorist financing has been a priority for the FATF since 2001. However, in 2015, the
scope and nature of terrorist threats globally intensified considerably, with terrorist attacks in many
cities across the world, and the terrorist threat posed by the so-called Islamic State of Iraq and the
Levant (ISIL/Da’esh), and by Al-Qaeda and their affiliated terrorist organisations.
Since then, the terrorism threats have continued to evolve, from large terrorist organisations, to
returning terrorist fighters and right-wing extremists. Despite its loss of territory, ISIL continues to
have access to resources enabling it to carry out or inspire terrorist attacks around the world. Al-
Qaeda and affiliate terrorist organisations continue to pose threats. Funds flow cross-border to
providing resources for nationally designated organisations, and many jurisdictions continue to suffer
from persistent attacks from small cells and radicalised lone actors, drawing inspiration from a range
of dangerous ideologies.
The FATF plays a central role in global efforts in combatting terrorist financing, through its role in
setting global standards to combat terrorist financing, assisting jurisdictions in implementing financial
provisions of the United Nations Security Council resolutions on terrorism, and evaluating countries’
ability to prevent, detect, investigate and prosecute the financing of terrorism. Yet many countries
have not yet implemented the FATF Standards effectively. They do not understand the nature of TF
risks they face, nor have effective means to combat them.
The FATF Strategy on Combating Terrorist Financing sets out the broad objectives for FATF’s work
in this area. Under this strategy, the FATF, in close collaboration with the regional FATF-style
regional bodies and other partners such as the UN, the FATF has completed work to support
countries around the world in combatting terrorist financing.
Improve and update the understanding of terrorist financing risks, in light of the
dynamic way in which the risks are changing in different regions around the world.
The understanding of risk is a key part of jurisdictions' counter-terrorist financing
 regime, as understanding the risks allows countries to allocate resources to detect or
disrupt terrorist financing.
● Terrorist Financing Risk Assessment Guidance, July 2019
● Financing of Recruitment for Terrorist Purposes, January 2018
● Terrorist Financing in Central and West Africa, October 2016
● Emerging Terrorist Financing Risks, October 2015
● Other typologies reports
Ensure that the FATF Standards provide the framework for countries to be able
to identify and disrupt terrorist financing activity. Key recent revisions have included
the explicit inclusion of the need to criminalise the financing of travel for the purpose
of the perpetration, planning, preparation of or participation in, terrorist acts, or
providing or receiving terrorist training.
● FATF Recommendations 2012 , February 2012 (last updated October 2018)
● Methodology 2013 , February 2013 (last updated February 2019)

Ensure countries are appropriately and effectively implementing the FATF

Standards, to identify and disrupt terrorist financing activity.
This includes guidance (both public and confidential) to help public and private
sectors effectively implement these tools.
● Guidance on Criminalising Terrorist Financing, October 2015
● Mutual Evaluation Reports, in particular Recommendations 5-9, Immediate
Outcomes 9-10
Identify and take measures in relation to any countries with strategic deficiencies
for terrorist financing. Global safeguards to combat terrorist financing are only as
strong as the jurisdiction with the weakest measures, with terrorist financiers able to
circumvent weak AML/CFT controls to successfully move assets to finance terrorism
through the financial system. A key objective of the FATF is to continually identify
jurisdictions with significant weaknesses in their AML/CFT regimes, and to work with
them to address those weaknesses.
● High-risk and other monitored jurisdictions
Promote more effective domestic coordination and international cooperation to
combat the financing of terrorism. This includes the FATF working closely with the
FATF Regional bodies, and other key partners such as the UN.
● Consolidated standards on information sharing, November 2017
● Private Sector Information Sharing, November 2017
● FATF President's Paper: Anti-money laundering and counter terrorist
financing for judges and prosecutors, June 2019

AML Professionals and Addressing the Challenges

of Combatting Terrorist Financing
—an ACAMS Resource
Terrorist financing is the process by which terrorists fund their operations in order to
perform terrorist acts. Terrorists need financial support to carry out their activities
and to achieve their goals. There is little difference between terrorists and other
criminals in their abuse of the financial system. While different from money
laundering, terrorists often exploit similar weaknesses in the financial system.

Terrorist organizations come in many forms, ranging from small, underground

networks to large, regional bodies. Most recently, the terrorist group Islamic State in
Iraq and the Levant (ISIL, or sometimes referred to as ISIS) has garnered attention
for its particularly ruthless attacks and its unique funding streams. Generating
capital by way of bank robbery, pirating oil fields, and robbing other economic
assets, ISIL has access to approximately a half billion dollars’ worth of financing. As
with most terrorist organizations, the actual acts of terrorism are relatively low-cost
compared to the damage they inflict; however, the operational costs of sustaining
an organization are significant.

Terrorist cells exercise several methods to raise and “clean” their money, ranging from
illegal activities like organized fraud or narcotics, to legitimate funding sources, including
charitable organizations or legitimate businesses. With ISIL/ISIS, and sadly so many
other terrorist groups, their revenue streams are diversified and far-reaching.
Regardless of how they raise their capital, the end goal is to ultimately disguise the
funds by exploiting global financial systems.

Detecting and reporting terrorist financing red flags is the most effective
way to combat terrorist financing and stop the flow of funds.
ACAMS has created this resource page as a tool to help AML and counter terrorist
financing professionals find topical news articles, research papers, government
organizations, and recorded conference sessions to assist in identifying terrorist
financing schemes, blocking their funding, and ultimately halting terrorists’ plans.