AML glossary · UK

Terrorist financing

Definition

Terrorist financing is the provision or collection of funds with the intention or knowledge that they will be used, in whole or in part, to carry out a terrorist act. Unlike money laundering — where the underlying funds are criminal in origin — terrorist financing can involve legitimately sourced money. Both money laundering and terrorist financing are covered by MLR 2017 and the Terrorism Act 2000.

In practice

the PEP and sanctions screening process helps identify clients connected to designated terrorist organisations or individuals. Suspicion of terrorist financing must be reported to the NCA immediately.

For every role

How different roles use Terrorist financing

A good definition should change the next action for the person reading it.

Partner or director

Check whether this term affects acceptance risk, fee scope, supervision exposure, or sign-off responsibility.

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MLRO or compliance lead

Map the term to evidence, escalation, monitoring, training, and inspection readiness.

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Client-facing team member

Use the plain-English explanation to ask better client questions and write clearer file notes.

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Related terms

Other terms that go with Terrorist financing

Sanctions screening

Sanctions screening is the process of checking clients, their beneficial owners, and associated parties against official sanctions lists maintained by bodies such as the UK Office of Financial Sanctions Implementation (OFSI), the United Nations Security Council, the European Union, and the US Office of Foreign Assets Control (OFAC). Acting for a sanctioned individual or entity is a criminal offence.

Suspicious Activity ReportSAR

A Suspicious Activity Report is a formal disclosure made to the National Crime Agency (NCA) when a person in a regulated sector knows or suspects that someone is engaged in money laundering or terrorist financing. Filing a SAR provides a defence against money laundering offences. Failure to file when there is grounds to do so is itself a criminal offence.

Before you treat Terrorist financing as handled

  • Confirm which regulation, policy, or internal procedure the term maps to.
  • Document the decision or evidence trail in the client file, not only in email or chat.
  • Escalate where the term indicates higher risk, sanctions exposure, PEP status, suspicion, or missing evidence.
  • Keep the wording consistent across onboarding, review notes, training material, and inspection packs.

Put Terrorist financing into practice with Certivus

Knowing the term is the first step. Certivus gives you the workflows — client intake, CDD, EDD, PEP and sanctions screening, audit-ready records — to apply it across every client.

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