Terrorism Financing and the Governance of Charities
The exploitation of charities for terrorism finance purposes was indicated by the Financial Action Task Force in October 2001, and three categories of potential abuses have since been identified. The first involves terrorist organisations posing as legitimate entities. The second is the exploitation of charities as conduits for terrorism financing. The third involves concealing the clandestine diversion of funds to terrorist purposes, often arising from humanitarian work abroad. Two key questions will be tackled in this chapter. First, how have legal interventions and wider governance mechanisms averted terrorism funding by charities? Second, what have been the intended or unexpected practical consequences of the regulatory interventions? Unexpected consequences include processes of ‘de-risking’ or ‘de-banking,’ which have severely hampered charitable work in conflict zones and fragile states.