An updated Terrorism Financing Risk Summary has been released by the DIA.

The guidance is intended to assist reporting entities in understanding terrorism financing and how their business could be used for that purpose.

Terrorism financing is slightly different to money laundering, in that legitimate funds can also be used, making it harder to identify such transactions occurring in your business. If a reporting entity does identify terrorism financing, they do not need to prove that the funds were used for terrorism activity when reporting their suspicions.

The guidance is split into several parts, with sections that focus on the obligations of reporting entities and how they should approach these.

1. Common vulnerabilities for regulated sectors, such as anonymity, ease of access, and new technologies.
2. Key legislative requirements for reporting entities that need to be considered within AML/CFT Risk Assessments and Compliance Programmes.
3. Examples of red flags associated with terrorism financing, which could be reflected in customer behaviours, transaction monitoring findings, and dealing with high-risk jurisdictions.

There are a few areas that reporting entities should pay close attention to:

• The information in your AML/CFT Risk Assessment and Compliance Programme. The sector supervisors expect reporting entities to specifically consider terrorism financing, rather than considering it alongside money laundering only.
• Red flags that are specific to the reporting entity’s sector. Some may be more applicable than others, so careful consideration is key.
• Staff training is very important, to maintain and update staff awareness of the dynamic nature of terrorism financing risk.

Looking for consulting or training on your terrorism financing risk? Get in touch with our team here.

 

Louise Coad, Senior Consultant, MA, CAMS

Louise originally started her career in IT Managed Services and transitioned into the AML space in 2018. She has worked in other AML consultancy firms in New Zealand, and was a Senior Regulator at the Department of Internal Affairs. In her time in the AML sector, Louise has carried out consultancy for Phase 2 entities, undertaken audits and inspections, training, and written AML/CFT documentation for all types of reporting entities.

Louise undertakes audits, health checks, and development of compliance documentation, looking for pragmatic and clear ways towards compliance that bear the business’s needs in mind. She has a Master of Arts, specialising in Defence and Security, and also holds a CAMS qualification.