ANTI-MONEY LAUNDERING AND TERRORIST FINANCING

According to Investopedia, Anti-Money Laundering is the practice of a set of provisions, laws or regulations designed to stop the practice of generating income through illegal actions.In other words, the process of combating money laundering practice in a strategic manner is called Anti-Money Laundering.As stated in the previous article, we know that Financial Action Task Force which was established by the G-7 summit in Paris in 1989, is responsible for setting global standards on anti-money laundering and combating financing of terrorism.India became the 34th member of Financial Action Task Force in 2010.

The functions performed by Financial Action Task Force are;

*Examination of money laundering techniques and trends,

*Review the action which had already been taken at a national or international level,and

*Setting out the measures that are still needed to be taken to combat money laundering.

The responsibility of the Task force was expanded to include Combating the Financing of Terrorism (CFT) post the 2001 attacks.

Terrorist Financing- It is the collection or the provision of funds for illicit purpose terrorism.In the case of Terrorist Financing, funds can stem from both legal as well as illicit sources.In order to facilitate terrorist financing, terrorists use techniques like those of money launderers to elude authorities’ attention and to obscure the identity of their sponsors and of the ultimate beneficiaries of the funds.

An analysis of the retrospect performed by federal law enforcement of the financial activity of Al Qaeda terrorists revealed:
>Addresses used were not permanent and changed frequently.
>Hijackers often used the same address/telephone numbers on the accounts.
>Some accounts directly sent/received wires of small amounts overseas to UAE, Saudi Arabia and Germany.
>Overall transactions were below reporting thresholds.
>Accounts were funded by cash or overseas wires.

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