Comparison: Terrorist Financing, Money Laundering, and Financing the Proliferation of Weapons of Mass Destruction

Summary

This is a JFSC guidance document presenting a comparison table that explains the differences and similarities between Terrorist Financing (TF), Money Laundering (ML), and Financing the Proliferation of Weapons of Mass Destruction (PF). It is intended to help regulated industry understand these three types of financial crime so they can better identify and mitigate them as part of AML, CFT and CPF efforts.

• Motive: Compares the underlying purpose of TF (supporting terrorism), ML (making crime proceeds appear legitimate), and PF (enabling proliferation of weapons of mass destruction).
• Source of funds: Describes typical legitimate and illegitimate funding sources for each type, including examples such as crowdfunding, natural resource exploitation, drug sales, and state or non-state sponsorship.
• Money trail and stages: Contrasts the linear nature of TF and PF fund flows with the circular nature of ML (placement, layering, integration).
• Monetary value, sectors and conduits: Notes typical transaction sizes, exposed sectors (e.g. cash-intensive businesses, luxury goods, dual-use items), and preferred channels (formal financial system, informal value transfer, crypto assets).
• Red flags and cross-jurisdictional complexity: Sets out illustrative red flags for each crime type and notes that all three commonly involve cross-jurisdictional elements and differing timing relative to the underlying criminal or terrorist act.

The document is explanatory and educational in nature; it does not itself create new compliance requirements, filing duties, or deadlines, but is intended to support firms in applying existing AML/CFT/CPF obligations more effectively.

Applies to

financial services industry