Introduction to Combating the Financing of Terrorism (CFT)
Combating the Financing of Terrorism (CFT) is known as a set of government laws, regulations, and other practices meant to restrict access to funding and financial services for those whom the government characterizes as terrorists. By tracing down the source of the funds that support terrorist activities, law enforcement may stop some of those activities from occurring.
CFT is also recognized as Counterfinancing of Terrorism or even Countering the Financing of Terrorism.
Understanding Combating The Financing Of Terrorism (CFT)
- As anyone who presents money willfully to carry out a terrorist act, whether directly or indirectly, is considered guilty of financing terrorism, individuals and groups who finance terrorism need to hide how the money will be utilized and where it originated.
Terrorists use various methods to finance their activities and cover their financing sources by means precise to their local economy, so the financial market regulators and law enforcement must follow a variety of techniques to catch hold of these criminals.
The funds may appear from legal sources, such as legitimate businesses, government funding, and religious organizations, or illegal sources, such as drug trafficking, kidnapping for ransom, and even government corruption. The funds may also arise from an unlawful source but appear to come from a legal source through money laundering.
CFT policies include investigating and analyzing suspicious financial flows and routine surveillance and collecting vast amounts of data concerning transactions across the economy. CFT efforts may concentrate on charities, informal banking activities, and registered money service businesses, among other things. However, most CFT policies and regulations by requirement apply to entire populations and financial markets.
Benefits Of Combating The Financing Of Terrorism (CFT)
- The obvious, dedicated benefit of CFT is to disrupt and positively prevent the incidence of terrorist attacks. An added reason for CFT is that the financial system's effectiveness by criminals involved in money laundering and terrorist financing is deemed a threat to the financial system's stability. The public may not trust the financial system's integrity if the system cannot detect illicit activities.
- CFT also imposes high costs on society. The most important of these is that CFT policies usually lower or eliminate privacy and anonymity in financial and other transactions for all the people in society. Whether or not they are involved in financing terrorism, everyone has to give up their financial privacy, according to the advocates of CFT.
