Combating the Financing of Terrorism (CFT)

Combating the Financing of Terrorism, or Counter Terrorist Financing (CFT) refers to a multitude of laws and regulations enacted to reign in the financing of terrorist activity. Under these policies, most financial institutions are required to fulfill strict requirements, including monitoring customers’ transactions and behavior, conducting proper due diligence, and maintaining appropriate records.

Frequently asked questions

What is CFT banking?

Combating the financing of terrorism (CFT) for banks focuses on identifying and reporting suspicious transactions that could indicate the use of funds for terrorist activities. These expectations are defined under the Bank Secrecy Act (BSA).

What is CFT in compliance?

Combating the financing of terrorism (CFT) laws are part of the broader scope of regulatory obligations that financial institutions must comply with and meet for all transactions. Along with anti-money laundering (AML) and Know Your Customer (KYC) expectations, CFT aims to reduce the risk of fraudulent activities and illegal operations.

What is CFT in AML?

CFT stands for combating the financing of terrorism. In many ways, CFT obligations overlap with AML compliance in that they both aim to reduce illegal transactions. In practice, CFT often involves identifying potential risk by considering the source of transactions — e.g. are they originating from countries that rank highly for money-laundering activities or terrorist financing?

What is CFT under KYC?

Under know your customer (KYC) obligations, combating the financing of terrorism (CFT) focuses on ensuring that customers are who they say they are. By implementing robust identity verification solutions, companies can help filter out individuals linked with money laundering and terrorism before they can create accounts or complete transactions.

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