Terrorism financing (TF) and money laundering (ML) are two intertwined activities that involve disguising the movement of funds.
The similarities lie in the procedures, tactics they use, and techniques they apply by both organisations when disguising and transferring funds.
However, the primary distinction between money laundering and terrorism financing is;
๐๐จ๐ง๐๐ฒ ๐ฅ๐๐ฎ๐ง๐๐๐ซ๐ข๐ง๐ ๐ข๐ฌ ๐ญ๐ก๐ ๐ฉ๐ซ๐จ๐๐๐ฌ๐ฌ ๐จ๐ ๐ก๐ข๐๐ข๐ง๐ ๐ฆ๐จ๐ง๐๐ฒ ๐ญ๐ก๐๐ญ ๐ฐ๐๐ฌ ๐๐จ๐ฅ๐ฅ๐๐๐ญ๐๐ ๐ข๐ฅ๐ฅ๐๐ ๐๐ฅ๐ฅ๐ฒ, ๐ฅ๐ข๐ค๐ ๐๐ซ๐ฎ๐ ๐ญ๐ซ๐๐๐๐ข๐๐ค๐ข๐ง๐ , ๐ก๐ฎ๐ฆ๐๐ง ๐ญ๐ซ๐๐๐๐ข๐๐ค๐ข๐ง๐ , ๐จ๐ซ ๐๐ซ๐๐ฎ๐
๐๐๐ซ๐ซ๐จ๐ซ๐ข๐ฌ๐ฆ ๐๐ข๐ง๐๐ง๐๐ข๐ง๐ ๐ข๐ง๐๐ฅ๐ฎ๐๐๐ฌ ๐๐จ๐ญ๐ก ๐ฅ๐๐ ๐ข๐ญ๐ข๐ฆ๐๐ญ๐ ๐๐ง๐ ๐ข๐ฅ๐ฅ๐๐ ๐ข๐ญ๐ข๐ฆ๐๐ญ๐ ๐๐ฎ๐ง๐๐ฌ. ๐๐๐ซ๐ซ๐จ๐ซ๐ข๐ฌ๐ญ๐ฌ ๐ฆ๐ข๐ ๐ก๐ญ ๐ซ๐๐ข๐ฌ๐ ๐ฆ๐จ๐ง๐๐ฒ ๐ญ๐ก๐ซ๐จ๐ฎ๐ ๐ก ๐ฅ๐๐ ๐ข๐ญ๐ข๐ฆ๐๐ญ๐ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ๐๐ฌ, ๐๐จ๐ง๐๐ญ๐ข๐จ๐ง๐ฌ, ๐จ๐ซ ๐๐ฏ๐๐ง ๐๐ฑ๐ญ๐จ๐ซ๐ญ๐ข๐จ๐ง
The 9/11 attacks served as a wake-up call, highlighting the critical link between disrupting terrorist financing and combating money laundering.
๐๐ญ๐๐ ๐๐ฌ:
ML targets the laundering of illegal proceeds, which has three stages: placement, layering, and integration. (Circular)
TF is a linear process focused on acquiring, storing, transferring, and ultimately using funds for terrorist activities. Funds are earned (legitimate) and obtained (illicit) through various channels.
๐๐จ๐๐ฅ:
ML: The goal is to make "dirty money" appear clean. Not collection, but accumulation, is the goal.
TF: Support terrorist activities. To hide how the money is used instead of where it came from. Involves soliciting, collecting, or providing funds.
๐๐จ๐ง๐๐ญ๐๐ซ๐ฒ ๐ฏ๐๐ฅ๐ฎ๐
ML: This typically involves larger sums of money.
TF: Often smaller amounts to avoid suspicion
๐
๐ข๐ง๐๐ง๐๐ข๐๐ฅ ๐๐๐ญ๐ข๐ฏ๐ข๐ญ๐ฒ ๐๐ง๐ ๐ฌ๐๐๐ญ๐จ๐ซ๐ฌ
ML: Focuses on complex structuring and webs of transactions
TF: Deals with the diverse methods terrorists use to fund their activities.
๐๐๐ฌ๐ ๐๐ญ๐ฎ๐๐ฒ: Hawala is an informal money transfer that uses a global system to transfer money without any actual movement of cash. Hawala is an informal and traditional way to send money that makes people anonymous because it works outside of traditiona lbanking and financial systems. This makes it hard to track and control. It is often used for goals that are both legal and illegal.
Similarly, Hawala could be exploited by terrorist organisations to finance their activities. The lack of regulation makes it difficult to track the flow of funds.