Terrorist financing offences

Terrorist financing offences

Contents

Introduction

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

The principal terrorist financing offences in Sections 15 to 18 (TA 2000) apply to all persons. However, the specific offence of failure to disclose and the two tipping off offences apply only to persons in the regulated sector.

Principal terrorist financing offences

Section 15 - fundraising

It is an offence for a person to be involved in fundraising if they have knowledge or reasonable cause to suspect that the money or other property raised may be used for terrorist purposes. Such person 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.

Section 16 - use or possession

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

Section 17 - arrangements

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

Section 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

Terrorist property means money or other property which is likely to be used for the purposes of terrorism, the proceeds of the commission of acts of terrorism and the proceeds of acts carried out for the purposes of terrorism.

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

Defences to principal terrorist financing offences

The following defences are available:

  • Prior consent defence - a person makes a disclosure to an authorised person before becoming involved in a transaction or an arrangement, and the person acts with the consent of an authorised officer
  • Consent defence - a person is already involved in a transaction or arrangement and makes a disclosure, so long as there is a reasonable excuse for failure to make a disclosure in advance, and the person acts with the consent of an authorised officer
  • Reasonable excuse defence - a person intended to make a disclosure but has a reasonable excuse for failing to do so. See further on The principal money laundering offences.

There are further defences relating to co-operation with the police in Section 21. A person does not commit an offence under Sections 15 to 18 in the following further circumstances:

  • They are acting with the express consent of a constable, including civilian staff at SOCA
  • They disclose their suspicion or belief to a constable or SOCA after they become involved in an arrangement or transaction that concerns money or terrorist property, and they provide the information on which their suspicion or belief is based. They must make this disclosure on their own initiative and as soon as reasonably practicable.

The defence of disclosure to a constable or SOCA is also available to an employee who makes a disclosure about terrorist financing offences in accordance with the internal reporting procedures laid down by their employer.

Failure to disclose offences

Non-regulated sector

Section 19 TA 2000 provides that anyone, whether they are a Money laundering reporting 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.

Regulated sector

Section 21A TA 2000 creates a criminal offence for those in the regulated sector who fail to make a disclosure to either a constable or their nominated officer where there are reasonable grounds for suspecting that another person has committed an offence. This also covers failure to disclose an attempted offence under Sections 15 to 18 TA 2000.

Defences to failing to disclose

A person has a defence to failure to disclose offences under both section 19 and section 21A if either:

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

There is an additional defence for those in the regulated sector. A person has a defence where they are employed or are in partnership with a professional legal adviser or other relevant professional adviser to provide assistance and support and they receive information concerning terrorist property in privileged circumstances.

It is also a defence under section 19 if a person makes an internal report in accordance with their employer's reporting procedures.

Section 21D tipping off offences: regulated sector

  • Section 21D(1) - disclosing a suspicious activity report (SAR). It is an offence to disclose to a third person that a SAR has been made by any person to the police, HM Revenue and Customs, SOCA or a nominated officer, if that disclosure might prejudice any investigation that might be carried out as a result of the SAR. This offence can only be committed:
    • After a disclosure to SOCA
    • If the person knows or suspects that by disclosing this information, they are likely to prejudice any investigation related to that SAR
    • The information upon which the disclosure is based came to the person in the course of business in the regulated sector
  • Section 21D(3) - disclosing an investigation. It is an offence to disclose that an investigation into allegations relating to terrorist property offences is being contemplated or carried out if that disclosure is likely to prejudice that investigation. The offence can only be committed if the information on which the disclosure is based came to the person in the course of business in the regulated sector. The key point is that you can commit this offence, even where you are unaware that a SAR was submitted

Defences to tipping off

Section 21E - disclosures within an undertaking or group

It is not an offence if an employee, officer or partner of a firm discloses that a SAR has been made if it is to an employee, officer or partner of the same undertaking.

An independent legal professional or a relevant professional adviser does not commit an offence if the disclosure is made to another independent legal professional or a relevant professional adviser where both the person making the disclosure and the person to whom it is made are in either an EEA state or a state imposing equivalent anti-money laundering requirements and those persons perform their professional activities within different undertakings that share common ownership, management or control.

Section 21F - other permitted disclosures

An independent legal professional or a relevant professional adviser does not commit an offence if he makes a disclosure to another person of the same kind from a different undertaking but of the same professional standing as himself (including as to duties of professional confidentiality and the protection of personal data) where the disclosure relates to the same client or former client of both advisers and involves a transaction or provisions of a service that involved them both, the disclosure is only made for the purpose of preventing a terrorist financing offence and the disclosure is made to a person in an EU Member State or a State imposing an equivalent money laundering requirements. This means that e.g., an accountant may only disclose to another accountant, and not to a lawyer or another kind of relevant professional adviser.

Section 21G - limited exception for professional advisers

A professional legal adviser or other relevant professional adviser will not commit a tipping off offence if the disclosure is to a client and it is made for the purpose of dissuading the client from engaging in conduct amounting to an offence.

Other terrorist financing offences

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.