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QUESTION

What is the Countering/Combating the Financing of Terrorism Act?

ANSWER

Countering (or Combating) the Financing of Terrorism Act (CFT), refers to the prevention, tracing and recovery of illicitly-acquired assets that are the proceeds of criminal activities, alongside with the disruption and dismantling of the global terrorist financial and criminal laundering operations. This term is often related to AML due to the similarities of the illegal activities and an individual who may be guilty of breaching an AML procedure may be found guilty of violating the CFT Act. In simpler terms, terrorist funding refers to the process by which terrorists fund their operations in order to perform terrorist acts, and while different from money laundering, terrorists often exploit similar weaknesses in the financial system.

Terrorist cells raise and “clean” their money from illegal activities like organized fraud or narcotics, to legitimate funding sources, including charitable organizations or legitimate businesses. With ISIS, and 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.

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