First Step
Black-Listing Terrorists (Sanctioning),
Second Step
Disrupting Terrorist Finance
Third Step
Monitoring-Reporting Terrorist Activities (day and night),
Fourth Step
Destroying/Prosecuting Terrorist(s). No Mercy Policy for Terrorist Financing Business and Activities.
Logic Behind Terrorist Financing:
Motivation:
Ideological/Political
Source of Funds:
1. Internally from self-funding cells (increasingly centered
on criminal activity).
2. Externally from benefactors and fundraisers.
Conduits:
Favors cash couriers or informal financial systems such as Hawala and Currency Exchange Firms.
Detection Focus:
Suspicious relationships, such as wire transfers between seemingly unrelated parties.
Transaction Amounts:
Small amounts usually below reporting thresholds.
Financial Activity:
No workable financial profile of operational terrorists exists, according to U.S. 9/11 Commission.
Money Trail:
Linear — money generated is used to propagate terrorist group and activities.
Suspicious Activity that May Indicate Terrorist Financing
Activity Inconsistent with the Customer’s Business
- Funds are generated by a business owned by persons of the same origin or by a business that involves persons of the same origin from high-risk countries (e.g., countries designated by national authorities and FATF as non-cooperative countries and territories).
- The stated occupation of the customer is not commensurate with the type or level of activity.
- Persons involved in currency transactions share an address or phone number, particularly when the address is also a business location or does not seem to correspond to the stated occupation (e.g., student, unemployed, or self-employed).
- Regarding nonprofit or charitable organizations, financial transactions occur for which there appears to be no logical economic purpose or in which there appears to be no link between the stated activity of the organization and the other parties in the transaction.
- A safe deposit box opened on behalf of a commercial entity when the business activity of the customer is unknown or such activity does not appear to justify the use of a safe deposit box.
- A large number of incoming or outgoing funds transfers take place through a business account, and there appears to be no logical business or other economic purpose for the transfers, particularly when this activity involves high-risk locations.
- Funds transfers are ordered in small amounts in an apparent effort to avoid triggering identification or reporting requirements.
- Funds transfers do not include information on the originator, or the person on whose behalf the transaction is conducted, when the inclusion of such information would be expected.
- Multiple personal and business accounts or the accounts of nonprofit organizations or charities are used to collect and funnel funds to a small number of foreign beneficiaries.
- Foreign exchange transactions are performed on behalf of a customer by a third party, followed by funds transfers to locations having no apparent business connection with the customer or to high-risk countries.
- Transactions involving foreign currency exchanges are followed within a short time by funds transfers to high-risk locations.
- Multiple accounts are used to collect and funnel funds to a small number of foreign beneficiaries, both persons and businesses, particularly in high-risk locations.
- A customer obtains a credit instrument or engages in commercial financial transactions involving the movement of funds to or from high-risk locations when there appear to be no logical business reasons for dealing with those locations.
- Funds are sent or received via international transfers from or to high-risk locations.
- Insurance policy loans or policy surrender values that are subject to a substantial surrender charge.
