While money laundering is basically the process of taking dirty money and making it clean, terrorist financing can be considered the opposite.  It’s the process of taking mainly clean money and dirtying it by directing it to finance or support terrorism or terrorist activity.  The money for terrorist financing, as in money laundering, can also come from illicit sources.  The common factor is that they both try to disguise the money.  Money laundering disguises it at the front end, where it originates, while terrorist financing disguises it at the back end, at its destination. According to the FATF, the term terrorist financing includes the financing of terrorist acts, and of terrorists and terrorist organisations.  Personal or business donations are misdirected by account holders to their criminal colleagues in what appear to be legitimate activities, such as charities or other institutions, which conceal their funding of terrorism.

Businesses and institutions are also required by law to report to the BVI FIA any type of activity or transaction that arouses suspicion of terrorist financing.