Overview

What is Money Laundering?

Money laundering (ML) is the processing of criminal proceeds to disguise their illegal origin. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention.

This is the “traditional” ML model, there are more “modern” methods of ML now beginning to emerge. Rather than getting caught up in trying to establish whether the activity relates to a particular phase of the traditional model, the relevant person should ask themselves – “Do I know, suspect or have reasonable grounds to suspect that the property in question is criminal property?”

For more information on money laundering, find the fact sheet here.

What is the Financing of Terrorism?

In general terms, the financing of terrorism (FT) is the financial support, in any form, of terrorism or those who encourage, plan or engage in terrorism. FT differs from money laundering in that the source of funds can either be legitimate, such as an individual’s salary, crowdfunding or charity donations, or illegitimate, often the proceeds of crimes such fraud, drug trafficking or kidnap for ransom.

Usually, the focus of scrutiny for potential FT activity will be the end beneficiary and intended use of the money or assets. A terrorist financier may only need to disguise the origin of the property if it was generated from criminal activity but in the vast majority of cases they will seek to disguise the intended use i.e. the act of terrorism. This can make terrorist property sometimes difficult to identify.

For more information on the financing of terrorism, find the fact sheet here.

What is Proliferation Financing?

Proliferation financing refers to the act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materials (including both technologies and dual- use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligation.

- Financial Action Task Force (FATF) 2012

For more information on proliferation financing, find the fact sheet here.