Donation-based crowdfunding the future of terrorist financing or a method counteracted ex-ante by European authorities

Abstract

Purpose

This study aims to analyse the adequacy of current and proposed European legislative measures for the mitigation and prevention of the use of donation-based crowdfunding to enable terrorist-related financing.

Design/methodology/approach

This study examines current and proposed European legislative and academic literature. To provide analysis on the current terrorist financing risks posed by donation-based crowdfunding.

Findings

The activity of European donation-based financing is not in theory completely removed from AML/CFT prevention, mitigation and reporting standards. European credit institutions and payment service providers are required to implement AML/CFT internal controls that target their entire customer base, which includes situations whereby an individual and/or individuals elect to engage in donation-based funds transfer. Current European crowdfunding and proposed crowdfunding AML/CFT standards target investment and consumer credit provision by credit and financial institutions and credit and mortgage intermediaries. Donation-based terrorist financing will likely remain a consideration for subversive groups and lone wolf individuals seeking integrated financing. European credit institutions and payment service providers will be required to cooperate both internally and externally on a national and transnational basis to prevent the materialisation of donation-based financing risks, ex-ante.

Originality/value

A desktop review composed by the author.

Citation

Cookman, D. (2024), "Donation-based crowdfunding the future of terrorist financing or a method counteracted ex-ante by European authorities", Journal of Money Laundering Control, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JMLC-12-2023-0199