CFTCountering the Financing of Terrorism
Also called combating the financing of terrorism. The laws, controls and practices designed to detect and stop funds and other assets from reaching terrorists and terrorist organizations. FATF standards treat AML and CFT as an integrated framework.
Why it matters
Terrorist financing differs from money laundering in an important way: the funds are often small and can come from legitimate sources such as salaries, donations or business income. The risk lies in where the money goes, not where it came from, so threshold-based rules miss much of it.
CFT rests on the 1999 UN International Convention for the Suppression of the Financing of Terrorism, UN Security Council resolutions and the FATF Recommendations. Core obligations include criminalizing terrorist financing, freezing assets under targeted financial sanctions without delay, screening customers and payments against sanctions lists, and reporting suspicious transactions to the financial intelligence unit.
Recent FATF work highlights crowdfunding, social media fundraising, virtual assets and the misuse of nonprofit organizations. Detecting these patterns usually requires combining sanctions screening with behavioral transaction monitoring, because many payments involve no listed party.
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