The financing of terrorist activities is a global problem that requires a coordinated effort to combat. Counter Financing of Terrorism (CFT), also known as Counter Terrorist Financing (CTF) is an important part of this effort, aimed at preventing terrorists from using financial systems to fund their activities. Counter Financing of Terrrorism measures are designed to disrupt the flow of funds to terrorists and to identify and stop those who are financing terrorism.
Financial institutions are key players in implementing CFT measures. They are required to put in place a range of controls and procedures to detect and prevent terrorist financing. These controls include conducting customer due diligence (CDD), transaction monitoring for suspicious activity, and reporting any suspicious transactions to relevant authorities.
In addition, financial institutions are required to freeze the assets of individuals or organisations suspected of being involved in terrorist activities. They are also expected to cooperate with law enforcement agencies by sharing information and providing support in investigations.
CFT measures are not only implemented by financial institutions but also by governments and international organisations. Governments around the world have enacted laws and regulations that require financial institutions to implement CFT measures. International organisations such as the Financial Action Task Force (FATF) have also developed standards and guidance on CFT.
What is CFT in AML?
CFT is closely related to Anti-Money Laundering (AML), which is the set of measures and regulations aimed at preventing the use of financial systems for money laundering. While AML and CFT have some similarities, they have different goals and objectives. AML focuses on detecting and preventing the conversion of illicit funds into legitimate ones, while CFT focuses on disrupting the financing of terrorist activities. Financial institutions must comply with both AML and CFT regulations.
In summary, CFT is a critical component of the global effort to combat terrorism. Financial institutions, governments, and international organisations all play a key role in implementing CFT measures to prevent terrorists from using financial systems to fund their activities.