Donation-based crowdfunding the future of terrorist financing or a method counteracted ex-ante by European authorities
| Date | 13 June 2024 |
| Pages | 1005-1012 |
| DOI | https://doi.org/10.1108/JMLC-12-2023-0199 |
| Published date | 13 June 2024 |
| Author | Daniel Cookman |
Donation-based crowdfunding the
future of terrorist financing or a
method counteracted ex-ante by
European authorities
Daniel Cookman
University College Dublin, Dublin, Ireland
Abstract
Purpose –This study aimsto analyse the adequacy of current and proposed Europeanlegislative measures
for the mitigation and prevention of the use of donation-based crowdfunding to enable terrorist-related
financing.
Design/methodology/approach –This study examines currentand 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 removedfrom
AML/CFT prevention,mitigation and reporting standards. European credit institutionsand payment service
providers are requiredto implement AML/CFT internal controls that target their entire customerbase, which
includessituations whereby an individual and/or individualselect to engage in donation-based funds transfer.
Current European crowdfundingand 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 seekingintegrated financing. European credit institutions and payment service providerswill be
required to cooperate both internally and externally on a national and transnational basis to prevent the
materialisationof donation-based financing risks, ex-ante.
Originality/value –A desktop review composedby the author.
Keywords Donations, Crowdfunding, Terrorist financing, Adequacy of measures
Paper type General review
Introduction
The global crowdfunding market is not insignificant. The Financial Action Task Force
(FATF) estimate that its value (that is to say the numerical figure for which funds are
provided for the listed activities) will reach US$34.6bn, (FATF, 2023). It has beenidentified
that the European market has not kept at pace with markets such as the USA and Asia-
Pacific but continues to see growth in regionssuch as the UK, Nordics and Baltic states and
the Iberian Peninsula, (Reimer and Redhead, 2021). Donations-based crowdfunding is
identified by FATFs Global Network as the most likely to be exploited for terrorist
financing or violent extremism purposes,(FATF, 2023, p. 11). From a European perspective,
Conflict of interest and data availability statement agreement: Daniel Cookman agree to abide by and
conform with the terms and conditions of the Journal of Money Laundering Control’s conflict of
interest and data availability policies and statements and to policies relating as they pertain to the
submission of the journal article titled.
Donation
based
crowdfunding
1005
Journalof Money Laundering
Control
Vol.27 No. 6, 2024
pp. 1005-1012
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-12-2023-0199
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1368-5201.htm
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