Terrorist Financing
The Terrorism Act 2000 (‘TA 2000’), as amended, sets out specific obligations to combat terrorist financing, which largely mirror the obligations to combat money laundering.
The movement of terrorist property and the laundering of criminal property can be similar; however, there are some key differences. First, terrorism often only requires small sums, increasing the difficulty of tracking terrorist property. Second, terrorism can be financed from legitimate sources, and it can be difficult to identify the stage at which legitimate funds become terrorist property.
Legal and regulatory framework
The legal and regulatory framework in the UK includes the Terrorism Acts of 2000 (‘TA 2000’) and 2006, the Counter-Terrorism Act 2008, the Criminal Finance Act 2017, the Economic Crime and Corporate Transparency Act 2023 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 which make provision for criminal and civil liability in relation to terrorist financing.
TA 2000 prescribes several terrorist financing offences including fundraising, use and possession, funding arrangements, laundering terrorist property and, like PoCA 2002, included a complex consent and disclosure regime affording defences to the principal terrorist financing offences in specified circumstances.
The MLR’s established the regulatory framework for thousands of businesses in the UK including financial institutions and those seen as gatekeepers to the financial system: auditors, legal advisers, insolvency practitioners, external accountants, tax advisers, estate agents, casinos, high value dealers and trust or company service providers. The MLR’s require businesses to have in place policies, controls and procedures to mitigate and manage the risks of money laundering and terrorist financing. The MLR’s enabled supervisory authorities to impose sanctions, including pecuniary penalties and to consider the use of HMRC and FCA powers to commence criminal proceedings.
Defending an allegation of terrorist financing
The key to defending terrorist financing allegations is early and ongoing expert intervention. In practical terms, this involves deploying a multi-disciplinary team of litigators and consultants including specialist barristers, forensic accountants and compliance experts.
Punishment
The maximum punishment for a person who is guilty of terrorist financing is a term of imprisonment of 14 years.
Terrorist Financing in the UK
The scale of Terrorist Financing is markedly lower than the scale of money laundering. According to the UK Financial Intelligence Unit Annual Statistical Report for the year ending March 2023, only 914 Suspicious Activity Reports (‘SARs’) were filed under TA 2000 and only 342 defence against terrorist financing (‘DATF’) SARs were filed. In contrast, some 74.431 defence against money laundering (‘DAML’) SARs were filed during the same period.
Counter terrorist financing efforts in the UK are aligned with anti-money laundering efforts and are largely based on intelligence and information sharing between the public and private sectors through Suspicious Activity Reports (‘SARs’).
How can we help?
We can deploy a multi-disciplinary team of expert lawyers to conduct internal and external investigations and devise and execute bespoke strategies to expedite outcomes, minimise reputational damage and protect business continuity.
We benefit from a wealth of in-house expertise in several disciplines including criminal defence, regulatory and dispute resolution. We also enjoy enduring relationships with leading consultants, including compliance experts, specialist fraud barristers, forensic accountants and industry experts.
We provide regulatory and compliance advice to individual and business clients in relation to terrorist financing, including in relation to the submission of SARs.
Free Initial Discussion
If you have been notified of an allegation of terrorist financing or an impending investigation or prosecution into allegations of terrorist financing, it is critical that you contact us as soon as possible.
Contact our lawyers by calling us on 0203 987 0222 or complete our enquiry form and one of our team will call you back.
