FinCEN AML/CTF Priorities Part 3: Terrorist Financing

Maren Draper, CAMS
July 21, 2021
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Key Priority: Foreign and Domestic Terrorist Financing

Among FinCEN's first list of key priorities for AML/CFT policy is detecting, reporting, and preventing foreign and domestic terrorism.

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As part of the Financial Crimes Enforcement Network’s (FinCEN) first national priorities list for anti-money laundering and countering the financing of terrorism (AML/CFT) policies, one important priority continues to be detecting, reporting, and preventing terrorist financing.

The Sept. 11 terrorist attacks were a significant driver in the development and implementation of many internal processes we see at banks throughout the US and beyond, aimed at ensuring we properly identify customers and deter bad actors. With such a serious and complex nature, this activity seems as it would be subject to large, international banks. Unfortunately, that is not the case. Financial institutions of all sizes are more likely than ever to see activity related to terrorist financing.

While we have long considered terrorism to be an international matter, domestic terrorism has been on the rise in recent years. In June 2021, the White House released the first rendering of the National Strategy for Countering Domestic Terrorism1, a strong indicator that it is time for us all to be paying closer attention to this matter.

While there is no doubt you feel a sense of responsibility in your role, protecting your institution from being an unwilling pass-through for terrorist financing, you may also be questioning your ability to be a part of the solution. Your time may already be stretched thin with a jam-packed calendar, a long list of tasks and obligations. What can we reasonably do to offer meaningful actions from our individual positions? We educate ourselves as often and as best we can, ensure we are familiar with red flags should they ever present themselves, and converse with our peers and leaders whenever possible.

Stay up-to-date on the latest FinCEN priorities. See Part I: Implications for Community Financial Institutions.
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Continuing education

Know emerging trends and red flags for terrorist financing

Continuing education is vital to our profession and resources for learning are numerous. Participate in learning opportunities as often as possible to stay informed about emerging trends, red flags, and case studies.

  1. If you are a member of a professional association or group, regularly check in on available webinars and online training. While there are certificates and training that can be purchased on countering terrorism, many also offer free or low-cost sessions that you can tune into on your own.
  2. If you have browsed podcast options recently, you know there is content available on nearly every topic imaginable, and financial crime is no exception. There are reputable sources that offer relevant and intriguing content that you can listen to during your commute.
  3. Chances are you already receive enough emails to keep a small army busy, but it is certainly worthwhile to ensure you are subscribed to the press releases of the US Department of the Treasury. They issue content on a consistent basis with a focus on terrorist financing. You may find their 2020 publication of the National Strategy for Combating Terrorist and Other Illicit Financing2 to be quite informative. Other government organizations also offer content. For example, a joint report is issued annually by the FBI, the Secretary of Homeland Security, and the Director of National Intelligence that assesses domestic terrorism and related data.3 The latest report was issued in May 2021 and includes summary of significant terrorist incidents that have occurred in the US in recent years.
Know the red flags

Warning signs of terrorist financing

In order to be in a position to identify potential terrorist financing activity, you need to know what it looks like. The Financial Action Task Force (FATF) offers valuable information on the red flags of terrorist financing, a list that is also referenced in the FFIEC AML/BSA Manual.4 This list is regularly being evaluated and updated as the world around us changes. Engage with the provider of your risk management software to ensure you are utilizing scenarios to their potential, to help identify red flag activity, and ensure thresholds are aligned with your institution’s profile.

Productive conversations and content sharing with your peers can be very rewarding when it comes to staying ahead of emerging trends. If you are not already, consider becoming a member of the local chapter of your professional organization or association. Dust off your log-in credentials and connect with industry peers on LinkedIn. There are many opportunities present on this platform to attend discussion groups and see posts from informed sources.

At the end of the day, we know it is our responsibility to be attentive to financial crime activity and to be proactive in preventing it in our institutions. However, doing your best work doesn’t have to be a manual process or a tedious burden. By working together and taking advantage of our system's current potential, we can truly maximize the impact we have in combating terrorist financing.

 

References

1National-Strategy-for-Countering-Domestic-Terrorism.pdf (whitehouse.gov)

2National Strategy for Combating Terrorist and Other Illicit Financing 2020 (treasury.gov)

3See Overview of Reporting Requirement, Strategic Intelligence Assessment and Data on Domestic Terrorism — FBI

4FATF https://www.fatf-gafi.org/publications/methodsandtrends/documents/virtual-assets-red-flag-indicators.html, FFIEC https://bsaaml.ffiec.gov/manual/Appendices/07

About the Author

Maren Draper, CAMS

Manager, Financial Investigations Unit
Maren Draper is a Financial Investigations Unit Manager with the Abrigo Advisory Services team. She is a current member of the national Association of Certified Anti-Money Laundering Specialists (ACAMS), a member of the ACAMS Carolinas Chapter, and she is also a Certified Community Bank Compliance Officer. With nearly 15 years

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About Abrigo

Abrigo enables U.S. financial institutions to support their communities through technology that fights financial crime, grows loans and deposits, and optimizes risk. Abrigo's platform centralizes the institution's data, creates a digital user experience, ensures compliance, and delivers efficiency for scale and profitable growth.

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