Counter Terrorism Financing (CTF) refers to the measures taken to prevent financial support for terrorism by detecting, disrupting, and suppressing the financing of terrorism.
The legal definition of CTF varies by jurisdiction but generally involves measures to prevent, detect, and suppress the financing of terrorism, including regulations and laws that require financial institutions to implement anti-money laundering (AML) and countering the financing of terrorism (CFT) programs.
CTF originated after the September 11th terrorist attacks in the United States and has since become a global issue.
CTF is used globally and is implemented by governments, financial institutions, and other entities involved in the financial sector.
CTF compliance is necessary for entities subject to CTF regulations as it helps to prevent and mitigate the financing of terrorism. However, certification in CTF is not a requirement, but some organizations may choose to become certified to demonstrate their commitment to CTF and to show their compliance with regulations.
Examples of transactions that would be classified as a CTF transaction include:
- Transferring funds to a designated terrorist organization
- Using a front company to launder money to support terrorism
- Providing financial support to a known terrorist individual or entity.
CTF regulations and guidelines are often developed and implemented by international organizations such as the Financial Action Task Force (FATF) and the United Nations (UN). These organizations work to standardize CTF measures and promote their implementation globally.
Financial institutions, including banks, money services businesses, and other entities involved in the financial sector, play a critical role in CTF by implementing AML and CFT programs, including customer due diligence procedures, transaction monitoring, and reporting suspicious activity.
In summary, CTF is a crucial component in the fight against terrorism and helps to prevent the financing of terrorism through the implementation of regulations and guidelines by international organizations and the efforts of entities involved in the financial sector.
This page was last updated on January 29, 2023.