A guidance manual issued by the United Nations Office on Drugs and Crime in June 2018 provides a methodology for member states conducting terrorist financing risk assessments. The document, Guidance manual for Member States on terrorist financing risk assessments, notes that terrorist financing needs to be countered in an efficient manner, emphasizing the importance of coordination and cooperation among financial intelligence units, law enforcement entities and intelligence services.

“Terrorists are continuously increasing and evolving their ability to diversify and renew not only the source of their funds, but also the channels and instruments they use to transfer those funds,” the guidance states.

According to the guidance manual, the risk assessment should set out to attain an understanding of:

  • Threats of terrorist financing (through the identification of the most relevant ones)

  • Main methods used for carrying out such criminal activity

  • Sectors most exposed to such risks and related criminal activity

  • Vulnerabilities in the national, regional or supranational systems of prevention, investigation and prosecution of such phenomena, and the systems of control in those sectors that are at risk

  • Actions to be initiated and their priorities,

The guidance also outlines the difference between threat, vulnerability and likelihood, the three factors that make up risk. A threat is something or someone with the potential to cause harm. A vulnerability is a thing that a threat can exploit or that may enable a threat to exist. The likelihood is based on a combined assessment of threats to and the vulnerability of a channel to terrorism financing activity. Some methodologies also distinguish between an inherent and residual risk. Residual risk is the risk remaining once the safeguards against terrorist financing have mitigated the threats.

The guidance then outlines the stages of a risk assessment: identification of the criminal environment, threats and vulnerabilities.

Read the guidance manual.