What is terrorist financing?

• A. Provides funds for terrorist activity.
• B. Funding of legitimate charities.
• C. Banking regulation to prevent money laundering.
• D. A method to launder money.

Answer: (A)

Terrorist financing is providing funds or assets to support terrorist activities, including planning, recruitment, travel, or carrying out attacks. The crucial point is the purpose: the money is used to enable terrorism, regardless of whether the funds originate from illegal or legitimate sources. It’s about funding those acts, not merely hiding where the money came from.

This differs from money laundering, which focuses on disguising the illegal origin of funds rather than funding terrorist operations. It also isn’t simply about funding legitimate charities unless that funding is misused to support terrorism. And it isn’t about banking regulation itself—that would be the rules designed to prevent such activity, not the activity of financing it.