How is terrorism financed?

A number of channels are likely to pose an increased risk of being misused for terrorism financing. One significant difference between terrorism financing and other crime types, is that most terrorism financing in Australia originates from legitimate sources and activities.

1. Banking and remittance

Banking and remittance use bank, interbank and wire transfers to fund individuals engaged in foreign insurgencies and conflicts, some of whom are also suspected of engaging with terrorist groups.

In Australia, the banking and remittance sectors are used more frequently than other channels for terrorism financing.

2. Charities and non-profit organisations

Charities and non-profit organisations may be used to raise funds for groups engaged in foreign conflict and as a cover to transfer funds offshore.

Funds for legitimate humanitarian aid may also be diverted in country, or offshore, and used to support terrorist groups.

3. Cross-border movement of cash

Cross border movement of cash is when someone carries money with them across a border.

Examples:

  • when someone carries money with them across a border when on transport such as a plane, train, or use of their own automobile.
  • when someone sends or receives money to or from overseas via mail or shipping, which may also be through the engagement of a private courier, shipping, or logistics company.

4. Online payment systems

Online payment systems from a website, both illegitimate and legitimate, may be used to collect donations and transfer funds to extremists.

Examples:

  • use of legitimate online payment systems may correspond with the use of social media by terrorist groups and extremists to radicalise, recruit and communicate with sympathisers.
  • use of phishing emails and internet scams, set up by terrorist groups, to trick people into online payments to fund terrorist activity.

5. Self-funding

Self-funding is when legitimate sources are used for terrorism funding.

Examples:

  • family and associates who knowingly or unknowingly transfer their own legitimately obtained funds to persons engaged in conflict.
  • legitimate funding to pay travel and living expenses for individuals to fight alongside terrorist groups overseas.

6. Stored-value cards

A stored-value card is a payment card with a monetary value stored on the card itself, not in an external account maintained by a financial institution. This means no network access is required by the payment collection terminals as funds can be withdrawn and deposited straight from the card.

Find out how you can access online learning on anti-money laundering and counter terrorism financing now.

Sentrient provide an online AML and CTF course that enables a Reporting Entity to deliver robust training for its staff that has been legally endorsed and covers legislation for all states and territories in Australia.

For more information contact us on 1300 040 589 or visit our website at https://www.sentrient.com.au today.