Anti-money laundering

Chapter 7 – terrorism offences

7.1General comments

Terrorist organisations require funds to plan and carry out attacks, train militants, pay their operatives and promote their ideologies. The Terrorism Act 2000 (as amended) criminalises not only the participation in terrorist activities but also the provision of monetary support for terrorist purposes.

7.2Application

All persons are required to comply with the Terrorism Act, although there is a specific offence of failure to disclose within the unregulated sector. The regulated sector is defined differently to the regulated sector for money laundering purposes.

7.3Principal terrorism offences

• 7.3.1Section 15 – fundraising

  It is an offence to be involved in fundraising if you have knowledge or reasonable cause to suspect that the money or other property raised may be used for terrorist purposes. You can commit the offence by:

  • inviting others to make contributions
  • receiving contributions
  • making contributions towards terrorist funding, including making gifts and loans.

  It is no defence that the money or other property is a payment for goods and services.

• 7.3.2Section 16 – use or possession

  It is an offence to use or possess money or other property for terrorist purposes, including when you have reasonable cause to suspect they may be used for these purposes.

• 7.3.3Section 17 – arrangements

  It is an offence to become involved in an arrangement which makes money or other property available to another if you know or have reasonable cause to suspect it may be used for terrorist purposes.

• 7.3.4Section 18 – money laundering

  It is an offence to enter into or become concerned in an arrangement facilitating the retention or control of terrorist property by or on behalf of another person including, but not limited to the following ways:

  • by concealment
  • by removal from the jurisdiction
  • by transfer to nominees

  It is a defence if you did not know, and had no reasonable cause to suspect, that the arrangement related to terrorist property.

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7.4Defences to s15-18

No offence is committed under s15-18 in the following circumstances:

• The act was done with the express consent of a constable, including civilian staff at SOCA.
• You make a disclosure on your own initiative as soon as reasonably practicable after becoming involved in a transaction or dealing with terrorist property.
• The disclosure must be made to a constable or SOCA, and you disclose suspicion or belief that the money or other property is terrorist property.
• You must provide the information on which your suspicion or belief is based.

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7.5Failure to disclose offences

• 7.5.1Non-regulated sector

  Section 19 provides that anyone, whether they are a nominated officer or not, must disclose as soon as reasonably practicable to a constable, or SOCA, if they know or suspect that another person has committed a terrorist financing offence based on information which came to them in the course of a trade, profession or employment. The test is subjective.

• 7.5.2Regulated sector

  Section 21A, inserted by the Anti-Terrorism Crime & Security Act 2001, creates a criminal offence for those in the regulated sector who fail to make a disclosure to either a constable or the firm's nominated officer where there are reasonable grounds for suspecting terrorist funding.

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7.6Defences to failing to disclose

The following are defences to failure to disclose offences under both section 19 and section 21A . Either:

• you had a reasonable excuse for not making the disclosure or
• you received the information on which the belief or suspicion is based in privileged circumstances, without an intention of furthering a criminal purpose

It is also a defence under section 19 if you made an internal report in accordance with your employer's reporting procedures.

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7.7Other terrorist offences in statutory instruments

The Al Qaida and Taliban (United Nations Measures) Order 2006 and the Terrorism (United Nations Measures) Order 2006 create offences of providing funds or economic resources to terrorists. Terrorists can be funded from legitimately obtained income, including charitable donations, so it is difficult to know at what stage legitimate earnings become terrorist assets.

It may be helpful to consult:

• www.bankofengland.co.uk – the consolidated sanctions list of the names of suspected terrorists maintained by the Bank of England.
• www.homeoffice.gov.uk – a list of proscribed organisations maintained by the Home Office.

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