Differences between anti-money laundering and counter-terrorist financing practice

Although modern counter terrorist financing practices have drawn on the techniques developed by anti-money laundering specialists with notable success, there are differences in the aims of terror groups and criminal gangs that must be considered by Regulated firms whose AML training is intended to identify both threats.

Rico Carisch, a financial consultant who has worked as an advisor to the United Nations, argues in his contribution to the book Terrornomics that the central distinction between the two groups is that a criminal pursues wealth, whereas a terrorist needs to acquire funds to achieve a further aim, "the exploding bomb".

If the further aim is given precedence, it means that the terrorist may deliberately avoid criminal acts before a planned attack; detection of a relatively minor offence could prevent the main aim, which means, in Carisch's argument, that terror groups are likely to keep their funding licit as far as possible. Without crime, there are no proceeds of crime to identify.

He also takes care to differentiate between larger terrorist organisations and small-scale cells; whereas the former may have to develop illegal sources of funding and therefore money laundering procedures to fund expenses such as training camps, the latter may be able to operate without these warning signs. It has been noted that several recent terror attacks could have been funded for less than the cost of an average high street bank loan.

While Carisch fears that the successful use of money laundering law to strangle large organisations will lead to "small and cheap attacks from an information void", that is a matter for politicians. Regulated firms that are bound by the laws set upon them by those politicians must ensure that their actions comply with the relevant sections of the Terrorist Act 2000, the Proceeds of Crime Act 2002 and the Money Laundering Regulations 2007.

Between these three pieces of legislation, Regulated firms are presented with an onerous checklist of compliance tasks. As politicians develop and amend these acts to keep up with changes - such as the fracturing of terror groups feared by Carisch - that checklist is further complicated by the need to ensure all relevant staff and principals are aware of their current obligations.

Supporting counter-terrorist financing measures with training
ML Solutions 4U offers accredited training to all members of Regulated firms, from office juniors to the Money Laundering Reporting Officer, that assists firms in meeting their compliance requirements. All material is alert to developments in the relevant legislation and its application to businesses in specific areas of the Regulated sector, and can be refined to meet the individual needs of a client.

Our services are designed to be both efficient and cost-effective, taking advantage of modern technology where applicable. For more information about the ways in which ML Solutions 4U can help your firm comply with its counter-terrorist financing obligations, please complete our enquiry form or call an advisor on 0845 402 0001.

Money Laundering Information » Counter Terrorist Financing and AML Training