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Financial Action Task Force Report on Terrorist Financing

Published February 29, 2008

The OECD's Financial Action Task Force produced this report on terrorist financing. The executive summary states, "Terrorists use a wide variety of methods to move money within and between organisations, including the financial sector, the physical movement of cash by couriers, and the movement of goods through the trade system. Charities and alternative remittance systems have also been used to disguise terrorist movement of funds. The adaptability and opportunism shown by terrorist organisations suggests that all the methods that exist to move money around the globe are to some extent at risk.

Disrupting funding flows creates a hostile environment for terrorism, constraining overall capabilities of terrorists and helping frustrate their ability to execute attacks. Disrupting terrorist financing involves both systemic safeguards, which protect the financial system from criminal abuse, and targeted economic sanctions informed by counter-terrorism intelligence. The study highlights the links between financial tools and wider counter-terrorist activity: the effectiveness of authorities at both detecting and investigating terrorist activity is significantly enhanced when counter-terrorist intelligence and financial information are used together.

Looking ahead the study identifies four areas which could be the focus of efforts to further strengthen counter-terrorist financing efforts: (1) action to address jurisdictional issues including safe havens and failed states, (2) outreach to the private sector to ensure the availability of information to detect terrorist financing, (3) building a better understanding across public and private sectors and (4) enhanced financial intelligence to exploit the value of financial investigation as a tool in fighting terrorism."