Terrorist Finance Strategy

The Treasury and the Office of Security and Counter Terrorism in the Home Office are jointly responsible for the UK’s Terrorist Finance Strategy.

This draws together the work being done by both the public and private sector to deter terrorists from using the financial system, detect them when they do and use financial tools to disrupt them.

Terrorism is funded in a variety of ways including through the formal and informal banking system.

It is vital that every effort is made to make the financial system a hostile environment for terrorist finance. The global standards of the Financial Action Task Force (FATF) and the UK’s Money Laundering Regulations 2007 underpin these efforts.

The Treasury also works closely with other governments and international organisations, including FATF, to develop and enforce international standards. And it helps persuade governments to take action against donors and facilitators and increase the capability of key partners to investigate terrorist financing.

The Government’s aim is to reduce the terrorist threat to the UK and its interests overseas by depriving terrorists and violent extremists of the financial resources and systems needed for terrorist-related activity.
The Government’s approach in disrupting terrorist financing is to make it harder for terrorist networks to operate by reducing the resources available for propaganda, recruitment, facilitation, training, and support of families, as well as harder for extremists to mount attacks.
The Government’s focus is on targeting the raising and movement of money in and out of the UK by terrorists and disrupting the funding of bodies such as Al Qa’ida. The Treasury does this by targeting donors, facilitators and the terrorist financial infrastructure.

In addition to the Treasury’s work, there are a wide variety of financial and other disruption tools available to law enforcement, security and intelligence agencies in the UK to identify, investigate, disrupt and prosecute the financing of terrorism.

Action against terrorist finance includes:

safeguards to prevent terrorists using common methods to raise funds, or using the financial system to move money;
financial intelligence and financial investigation tools. These are used to support counter-terrorist investigations; and
asset freezing. This can be used to disrupt the activity of terrorists and their supporters

Collaboration is vital. In particular, the financial sector plays an important role in preventing terrorist abuse by carrying out its customer identification checks rigorously, and reporting suspicious customers or activity to the Serious Organised Crime Agency (SOCA).

Separately, the Charity Commission has also worked with the Treasury and the Home Office to review the safeguards in place to protect the charity sector from terrorist finance abuse, and to implement its comprehensive counter-terrorism strategy.

Other work is also being done across Government to help tackle the threats posed by terrorist finance.

For example, in registering money service businesses, HM Revenue and Customs (HMRC) has introduced a ‘fit and proper’ test to ensure that owners and persons who direct a business cannot abuse it for terrorist financing.

Further steps being taken by HMRC to counter terrorist finance are set out in its Money Service Business Action Plan.

HMRC Money Service Business action plan

Terrorist Finance Strategy

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Anti-money laundering & counter terrorist finance index