Counter Terrorist Financing (CTF), also known as Combating the Financing of Terrorism (CFT), is a set of measures and regulations that together make a critical aspect of global security efforts aimed at stopping the flow of illicit funds to terrorist organizations. Involving a comprehensive framework of laws, regulations, policies, and procedures designed to prevent, detect, and disrupt financial support for terrorism, CFT is typically linked to Anti-Money Laundering (AML) practices, 

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To maintain their operations and achieve their aims, Terrorist organizations require substantial financial support, thus financing terrorism can be defined as a crime committed when a person unlawfully and willfully provides or collects funds - both directly or indirectly, knowing that they will be used in full or in part to carry out terrorist activities (as noted in the International Convention for the Suppression of the Financing of Terrorism). These funds can originate from a variety of sources, including the abuse of charities, legitimate businesses, criminal activities such as drug trafficking, and state sponsorship.

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To counter the sophisticated methods used by terrorists to move funds across jurisdictions, CTF measures are implemented. These include the criminalization of terrorist financing, the establishment of targeted financial sanctions regimes in compliance with United Nations Security Council resolutions, and stringent monitoring of financial transactions. The Financial Action Task Force (FATF) underscores the importance of CTF in maintaining the security and integrity of the financial system. FATF Recommendations 5-8 outline the necessary measures every country should adopt, including the criminalization of terrorist financing, even in the absence of a direct link to a specific terrorist act, and the implementation of financial sanctions.

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Financial institutions, corporates and other key organizations play a critical role in CTF, as they are required to implement a range of AML controls, CTF policies and KYC procedures to detect and prevent terrorist financing. KYC checks are crucial for screening individuals and entities with links to terrorism or terrorist financing. Global regulators mandate that the responsibility for AML/CTF compliance extends beyond traditional financial institutions to include companies facilitating payments between customers and merchants. These entities must ensure they do not process transactions for sanctioned individuals, entities, or jurisdictions, thereby safeguarding the financial system from terrorist facilitators and other national security threats.

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CTF is an essential component of international efforts to combat terrorism, focusing on disrupting the financial networks that support terrorist activities. Through comprehensive Regulatory Frameworks, robust enforcement and active participation from the private sector, CTF aims to weaken the financial infrastructure of terrorist organizations, thereby reducing their operational capabilities and threat levels. It is important to note that failure to comply with CTF regulations can lead to financial and reputational damage, in addition to legal and regulatory consequences.