Stages Of Terrorism Financing

The stages of terrorism financing are usually described as raise, move and use, and only the middle stage resembles money laundering.

Raising. Funds are obtained. This may be entirely lawful, through employment, savings, business income, loans or solicited donations. Nothing at this point looks irregular.

Moving. Funds are transferred toward their destination, often in small amounts, through multiple channels, and sometimes via informal value transfer systems rather than banks.

Using. Funds are applied, frequently to ordinary-looking expenses such as travel, accommodation, vehicles or equipment.

The first and third stages look completely normal in isolation, which is why detection almost always depends on the middle stage and on the relationship between customer, destination and stated purpose.

Training that covers only the laundering stages leaves this uncovered entirely, and the two are regulated together in Australia for exactly that reason.

AUSTRAC publishes guidance. This is general information rather than legal advice, and obligations vary by state and territory.

See Sentrient’s AML/CTF course and AML/CTF articles.