CTF (Counter-Terrorist Financing) refers to measures aimed at detecting and preventing the financing of terrorist activities. Similar to AML measures, CTF regulations require financial institutions to implement risk-based controls, conduct due diligence, and report suspicious transactions potentially related to terrorist financing (Citation: Terrorism Act 2000 – Section 19; UK Money Laundering Regulations 2017 (MLR 2017)).

• Transactions involving individuals or entities listed on national or international sanctions lists (FATF Recommendation 6, Interpretive Note to Recommendation 6, Paragraph 2): Financial institutions should establish and maintain effective systems to screen customers and transactions against national and international sanctions lists, ensuring timely implementation of changes to these lists and conducting ongoing monitoring of existing relationships.

• Transactions with links to terrorist financing hotspots (FATF Recommendation 1, Interpretive Note to Recommendation 1, Paragraph 12): Implement effective risk-based procedures to identify transactions with links to terrorist financing hotspots, and apply enhanced due diligence to customers and transactions originating from or destined to high-risk jurisdictions.

• Donations to non-profit organizations with possible connections to terrorism (FATF Recommendation 8, Interpretive Note to Recommendation 8, Paragraph 7): Conduct ongoing risk assessments of non-profit organizations, monitor donation activities, and apply enhanced due diligence to organizations with potential links to terrorism.

• Transactions involving charities or non-profit organizations with no clear purpose or history (FATF Recommendation 8, Interpretive Note to Recommendation 8, Paragraph 2): Verify the legitimacy of charities or non-profit organizations, assess their purpose, and conduct enhanced due diligence when there is no clear purpose or history.

• Customer has known links to terrorist organizations or individuals (FATF Recommendation 1, Interpretive Note to Recommendation 1, Paragraph 8): Conduct enhanced due diligence and ongoing monitoring for customers with known links to terrorist organizations or individuals.

• Transactions with unusual patterns or amounts inconsistent with customer’s profile (FATF Recommendation 20, Interpretive Note to Recommendation 20, Paragraph 2): Implement transaction monitoring systems to detect unusual patterns or amounts, and investigate and report any suspicious transactions.

• Customer shows excessive interest in terrorist events, materials, or ideologies (JMLSG Guidance, Part 1, Section 4.4.4): Train staff to recognize potential indicators of terrorist interest, and apply enhanced due diligence and ongoing monitoring for customers exhibiting such behaviors.

• Funds transfers to or from high-risk jurisdictions with links to terrorism (FATF Recommendation 19, Interpretive Note to Recommendation 19, Paragraph 1): Apply enhanced due diligence and ongoing monitoring for transactions involving funds transfers to or from high-risk jurisdictions linked to terrorism.

• Transactions involving cash couriers or other informal value transfer systems (FATF Recommendation 14, Interpretive Note to Recommendation 14, Paragraph 2): Monitor transactions involving cash couriers or informal value transfer systems, and apply enhanced due diligence and reporting requirements for suspicious activities.

• Transactions with no clear economic or legal purpose, potentially linked to terrorism financing (FATF Recommendation 10, Interpretive Note to Recommendation 10, Paragraph 21): Conduct enhanced due diligence and ongoing monitoring for transactions with no clear economic or legal purpose, and report any suspicious transactions potentially linked to terrorism financing.