Criminal Finances Act 2017
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CHAPTER 7
Terrorist financing and terrorist property
Introduction
7.1 As the UK’s 2017 national risk assessment recognises, tackling financial activity and making greater use of financial intelligence is a major priority for law enforcement in the fight against domestic and global terrorism. Between October 2014 and September 2015, just 1,899 of the 381,882 suspicious activity reports (SARs) received by the National Crime Agency (NCA) were linked to terrorism.1 This is perhaps because large-scale, coordinated terrorist financing is not the norm in the UK. Instead, financial support of terrorism is varied and typically low-level,2 making it all the more difficult to detect. The movement of funds may be directed at supporting a small group planning on joining terrorist groups abroad. Recent experiences also show they may be directed at supporting a low-cost unsophisticated domestic attack perpetrated by just one or two individuals. 7.2 In the UK at least, a common method of terrorist fundraising is not identifiable.3 Funds intended to be used to support terrorism may have been legitimately earned or may constitute personal savings. Equally, they may constitute the proceeds of a fraud orchestrated to raise funds to aid terrorism or comprise some of the profits of an organised criminal activity, such as drug trafficking, which seems unrelated to terrorist aims. Whilst the movement of terrorist funds can and does involve large financial institutions, depending on the end destination money may also be routed through money service businesses (MSBs) and personal couriers. 7.3 Against this backdrop, the CFA 2017 introduces several amendments to the Terrorism Act 2000 (TACT 2000) and the Anti-Terrorism, Crime and Security Act 2001 (ATCSA 2001) directed at further combating terrorist financing. The key measures comprise:- disclosure orders
- an information-sharing framework for persons in the regulated sector
- further information orders
- expanded provisions for the civil recovery of terrorist property
- powers to freeze and forfeit money held in bank accounts.
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Disclosure orders
7.5 Originally only used in property civil recovery and confiscation investigations,4 a disclosure order is an order permitting law enforcement to issue any person considered to have information relevant to the investigation with a written notice compelling them to answer questions, disclose specified information and produce specific documents. The order is made by a Crown Court judge. 7.6 Section 35, together with Schedule 2, of the CFA 2017 introduce a framework for the making of a disclosure order in the context of a terrorist-financing investigation. The provisions entered into force on 31 January 2018. Appearing in Schedule 5A of the TACT 2000, the framework is very similar to the provisions for a disclosure order in a property confiscation investigation or, since the entry into force of sections 7 and 8 of CFA 2017, which was also on 31 January 2018, a money laundering investigation in Part 8 POCA.Making the application
7.7 On application to a Crown Court judge, a disclosure order may be made in the context of a terrorist-financing investigation against any person. Applications may be made by a constable or counter-terrorism financial investigator subject to the authorisation of a senior police officer with the minimum rank of superintendent. Almost always they will be made ‘on the papers’ or without notice to a judge in chambers. 7.8 Where an order is made on the papers, there is no legal duty on the court to give reasons.5 7.9 In terms of procedural requirements of the application, the applicant must state in the application that a person or property is subject to a ‘terrorist-financing investigation’ and the order is sought for the purposes of the investigation: Schedule 5A(9) TACT 2000. The person against whom the disclosure order is sought need not be the subject or a subject of the investigation. 7.10 Part 1 of Schedule 5A of the TACT 2000 defines a ‘terrorist-financing investigation’ as an investigation into:- the commission, preparation or instigation of an offence under sections 15–18 of the TACT, namely offences of terrorist fundraising, possession of funds or property for
the purposes of terrorism, being concerned in an arrangement for the purposes of terrorism, payments under an insurance contract for the purposes of terrorism, and being concerned in an arrangement to facilitate terrorist property; andPage 59
- the identification of terrorist property or its movement or use.6
Terrorism
7.11 The definition of ‘terrorism’ is found in section 1 of the TACT 2000. It has, in essence, three strands:- use of action or a threat to use action which involves serious violence against a person, serious damage to property, endangering of another person’s life, serious risk to the health or safety of the public or a section of the public or which is designed to seriously interfere with or disrupt an electronic system;
- such use of action or threat of action is designed to influence the government, an international governmental organisation or to intimidate the public or a section of the public; and
- such use or threat is made for the purpose of advancing a political, religious, racial or ideological cause.
Terrorist property
7.13 As for ‘terrorist property’, this is defined broadly in section 14 of the TACT 2000 and comprises money or other property likely to be used for the purposes of terrorism, proceeds of acts of terrorism and proceeds of acts carried out for the purposes of terrorism. 7.14 Proceeds can include any property that wholly or partly represents the proceeds of an act of terrorism, including payments or other rewards.Requirements to be satisfied
7.15 The making of a disclosure order for the purposes of a terrorist-financing investigation is subject to the Crown Court judge being satisfied of the following four cumulative requirements appearing in Schedule 5A(10) of the TACT 2000:Requirements for making of disclosure order