Sentrient Blog

The 6 Ways That Terrorism Is Financed

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 the 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:

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:

5. Self-funding

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

Examples:

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 This means the payment collection terminals require no network access, as funds can be withdrawn and deposited straight from the card.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 provides 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 at 1300 040 589 or visit our website at https://www.sentrient.com.au today.

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