Terrorism financing is the basic act of undertaking various activities which earn money for the purposes of facilitating money to terrorism groups. Money laundering on the other hand is the process of using illegal means to earn money yet hiding these acts and making them look legitimate or acceptable. It is a source of money that many people are not familiar with. Money laundering is kept secret and other legal ways of earning money put forward in order to make the finances accepted in the money market system ( Krieger & Meierrieks, 2011) . It is a worldwide fact that terrorist groups and individuals have constantly been funded over the number of years they have been in operation. The sources of these finances are not yet well known but the fact still remains, terrorism groups usually have a constant source of sustainable income. These finances have been focused on terrorism activities which are usually centered on mass killings and genocides of thousands of innocent people. The International Monetary Fund organization has been on the forefront of investigations as to how money laundering and terrorism financing can be curbed. However, this has proven to be a difficult task since many of these terrorists do not use unscrupulous ways of transferring money ( Krieger & Meierrieks, 2011) . Their funds are transferred through formal banking systems just as any other organizations making it difficult to follow up or identify which transfers are from terrorist activities.
Terrorism financing is one of the key sources where terrorism groups are able to conduct their activities. The main aim of the international community is to find out the sources of these finances and how to cut them. However, there is a difference between terrorism financing and money laundering. The major difference between the two terms is that terrorism financing may be from legal sources of money ( Boon & Lovelace, 2010) . Money laundering on the other hand majorly concerns earning money from illegal or illegitimate ways such as hard drug sales or pirating ( Boon & Lovelace, 2010) . The former is more difficult to deal with since money is gained from legal ways.
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The major way in which terrorism financing is undertaken is through donations. There are millionaires around the world who support terrorism activities, mainly being Muslims. They offer their support through donations to terrorist bank accounts which makes it difficult to trace them as terrorism sponsors. Money laundering on the other hand is usually made to look like financing by changing sources of the assets or finances to look legitimate and lower suspicion of their money transfers. The motive behind terrorism financiers is not well known despite critical scrutiny as to why and where this large sums come from. Despite the fact that the transactions are made to look least suspicious, the people who deal with these transfers use very complicated and numerous transfers, in most cases via international bank transfers. This complex series of transactions makes it even harder to trace origins and destinations of the money ( Helgesson & Mörth, 2016) . Another factor making it difficult to follow up these transactions is the privacy limitations set by banks. Even though many governments have taken control of the banking systems of their respective countries such as the Patriot Act of the USA, these privacy limitations set by money transfers hinder the fast monitoring and investigations of these money transfers.
Apart from people who finance terrorism groups, money laundering has also been identified as a major source of income by terrorism groups. One of the major activities that earn terrorists money is pirating of ships and sea vessels. Especially in the last decade, these rebels have set pirate boats in high traffic canals whereby they capture vessels and demand for ransom for the goods and lives on the ships aboard. Ransoms are usually demanded for in millions of dollars ( Helgesson & Mörth, 2016) . Other forms of money laundering by pirates include drug trafficking, kidnapping, human trade and selling of pirate DVDs.
Terrorism activities have been known to cost hundreds of thousands, sometimes, millions of dollars per attack. People have constantly questioned how these large amounts of money has moved from sources to recipients since they are large sums that cannot be exchanged in cash without going unnoticed. These terrorists have been known to move money through the formal banking sectors. Looking at the various activities of terrorist groups, not only do they execute attacks, but it has been identified that they even have research stations and assembly points where they conduct research and build weaponry from parts that they import. With this knowledge, governments have been on the lookout of suspicious money transactions and exchange of goods all the way down to scrap metal. There has also been speculations of some states being in support of terrorism groups, such as the Sadam Hussein government ( Irwin, Slay, Choo & Lui, 2014) .
Countries have been keen to investigate any suspicious movement of money that may involve unusual money deposits or transfers of certain accounts that do not resemble past transactions. Transfer of money to foreign accounts has also been a subject of consideration. Wire transfers and exchange of large sums of money has also been an eyebrow raiser that may be a terrorist fund transfer. Other key factors that are important to look at in money transfer are such as those which have no economic value such as the purchase of goods from abroad. A lot has been done in trying to fight terrorism funding and money laundering which has seen the groups also tighten their means of financial exchange.
References
Boon, K. E., & Lovelace, D. C. (2010). Terrorist Financing and Money-laundering (Vol. 106). Oceana Publications.
Helgesson, K. S., & Mörth, U. (2016). Involuntary Public Policy ‐ making by For ‐ Profit Professionals: European Lawyers on Anti ‐ Money Laundering and Terrorism Financing. JCMS: Journal of Common Market Studies .
Krieger, T., & Meierrieks, D. (2011). Terrorist financing and money laundering.
SM Irwin, A., Slay, J., Raymond Choo, K. K., & Lui, L. (2014). Money laundering and terrorism financing in virtual environments: A feasibility study. Journal of Money Laundering Control , 17 (1), 50-75.
