How do terrorists finance their activities?

But how can these illicit financial flows be identified? What are the methods and indicators for effectively detecting terrorist financing? This article explores the strategies put in place to combat this threat and strengthen financial security, as well as highlighting these different financial mechanisms in order to combat them more effectively.

Terrorist financing is divided into two main areas

First, there is the financing of specific terrorist operations, which includes the direct costs associated with carrying out individual attacks. These costs are typically low when compared to the extensive damage and disruption such acts can cause.
Next, structural expenditure help to expand and maintain an organization and spread a the ideology of the group. However, it is essential to point out that the diversity of funding requirements for terrorist organizations does not allow them to be grouped into a single typology.

What are the factors for detecting terrorist financing?

The various factors
Embezzlement Donations are collected under a humanitarian pretext, such as aid for orphans, but some or all of the funds are actually redirected to terrorist groups. This detour can take place within a legitimate charitable organization, while at the same time carrying out fraudulent activities.	Use of fictitious organizations Fraudulent entities pose as genuine charities to conceal financial flows to terrorist groups.
Operating a legitimate structure A charity carries out a humanitarian action, such as distributing food to vulnerable populations, but collaborates with an entity designated as terrorist, thus legitimizing its operations.	In some cases It is individuals with direct access to the funds who divert them to terrorist ends. However, it also happens that an entire charity is used as a front to defraud donors and finance illicit activities.

Financing terrorist movements through criminal activities

Among the crimes frequently exploited are drug trafficking, credit card fraud, cheque fraud and extortion. Drug trafficking is a lucrative source of funding for terrorist groups, enabling them to generate considerable sums of money. The growth of this activity as a means of financing terrorism has intensified with the decline in state support for these groups.

This development has gradually blurred the line between terrorist organizations and drug trafficking networks. The role of CRSs (cash remittance services) in the financing of terrorism consists of primarily as an "end-user" gateway. This facilitates the transfer of funds, whether newly acquired or already stored, to the operational cells.

What are the issues and questions surrounding the financing of terrorism?

How can terrorist financing be detected?

RSIII (Collection of Indicator Signals and Information) serves a preventive objective, requiring states to identify elements of terrorist support networks based on a reasonable standard of proof. Its primary aim is to prevent terrorists and other criminals from freely using wire transfers to move funds, while also enabling the detection of potential misuse.

With this in mind, the FATF has developed an effective four-pronged strategy to prevent and combat the exploitation of charities for terrorist purposes. This approach is based on :


More specifically, it ensures that essential information on the issuer of wire transfers is immediately accessible to the authorities in charge law enforcement and judicial authorities to facilitate the detection, investigation and prosecution of terrorists and other criminals, as well as the tracing of their assets.

This information must then be passed on to financial intelligence units, which analyze suspicious transactions and disseminate the relevant information (CTIF in Belgium) in order to facilitate the identification and reporting of suspicious transactions.