Counter-Terrorist Financing (CTF, sometimes written as CFT — Combating the Financing of Terrorism) refers to the legal and regulatory measures aimed at preventing funds from reaching terrorist individuals or organisations. Unlike money laundering — where the origin of the funds is illegal — terrorist financing can involve money that is entirely legitimate in origin (for example, donations or business profits), but is intended to be used to fund violent extremist activity. This makes it particularly challenging to detect.
Obliged entities are required to screen their customers and transactions against terrorism-related sanctions lists, monitor for unusual patterns that might suggest funds are being moved toward terrorist purposes, and report any suspicions to the relevant national Financial Intelligence Unit (FIU).
As CFT requires similar screening and client identification measures as AML, these two terms are often found together.
