What is combating the financing of terrorism (CFT)?
CFT refers to the legal and regulatory measures designed to prevent funds from being channelled to terrorist organisations or used to finance terrorist activities. Under the FATF framework, CFT obligations are closely integrated with AML requirements, as the detection methods - including customer screening, due diligence, and suspicious activity reporting - overlap significantly.
How CFT differs from AML
While AML focuses on detecting the proceeds of crime being laundered into the legitimate economy, CFT addresses a different flow: legitimate or illegitimate funds being directed toward terrorist purposes. Amounts involved in terrorist financing can be very small, making detection particularly challenging. All non-financial institutions must screen against terrorism-related sanctions lists.
Related terms