Terrorist Financing: Terrorism and Terrorist Financing

The purpose of this Section is to provide financial institutions with information relative to various aspects of terrorist financing to assist them in identifying and reporting related suspicious activity. Issues 4 and 5 of The SAR Activity Review, SAR Bulletin Issue 4?The Aspects of Financial Transactions Indicative of Terrorist Funding, and FinCEN Advisory Issue 33? Informal Value Transfer Systems (IVTS) discussed the vulnerabilities of a financial system to terrorist financing. The last two editions of The SAR Activity Review provided statistical data and information concerning terrorist-related SARs.

FinCEN has continued to examine the SAR database to determine the extent to which SARs have been filed by institutions that suspect certain activities may relate to terrorism and terrorist financing. A recent review identified several interesting trends. First, the number of SARs submitted from financial institutions reporting terrorism or terrorist financing has continued to decline steadily since the events of September 11, 2001. Secondly, of all SARs filed referencing terrorism, one-third were filed as a result of names appearing on government lists [Office of Foreign Assets Control (OFAC) or other watch lists] or Section 314(a) Information Requests. Finally, the remaining two-thirds of all SARs reviewed appeared to be submitted as a direct result of proactive initiatives by institutions, which are becoming more aware of possible indicators of financial activity and transactions by suspected terrorists and terrorist organizations. In other words, institutions are becoming less dependent on specific lists and are identifying suspicious activity as being potentially terrorist-related on their own. This section will offer a synopsis of SAR statistical data for the recent review period and will identify the general types of activities being reported in terrorist-related SARs.

The following chart represents SARs filed relating to terrorism for the 18-month period (by CY quarters), commencing October 1, 2001 and ending March 31, 2003.



Excerpted from SAR Activity Review Issue 8, page 3