ABSTRACT
This chapter focuses on private terrorist funding, defined as funding that operates without the complicity, encouragement, or knowing toleration of any government. Official terrorist finance may pass through the formal financial sector or it may be drawn from secret government funds that are transferred by such means as couriers or the diplomatic pouch. Private terrorist financing makes use of multipurpose undocumented payment and settlement systems operating out of sight of regulatory and tax authorities in the vast majority of the world’s countries, including all G8 countries. Terrorist financing is more likely to resemble a series of retail operations with a variety of clients from across the economic spectrum. Money laundering moves through more centralised financial channels than private terrorist finance. Compared with money-laundering transactions, the scale of individual terrorist financings tends to be small. A mosque in Cologne accepts a charitable contribution, some of which it intends to divert to terrorist causes.
