There is no universally agreed, legally binding criminal law definition of terrorism. Common definitions of terrorism refer only to those violent acts which are intended to create fear (terror), are perpetrated for a religious, political or ideological goal, deliberately target or disregard the safety of civilians.

In November 2004, a United Nations Secretary General report described terrorism as any act "intended to cause death or serious bodily harm to civilians or non-combatants with the purpose of intimidating a population or compelling a government or an international organisation to do or abstain from doing any act".

Although terrorism financing can use similar methods to money laundering, there are some comparative differences. The cost to finance a terrorist act can be of relatively small sums and in comparison to money laundering where funds originate from proceeds of crime, funds to finance terrorism may originate from legitimate sources. Due to these differences, detection of terrorism financing presents greater challenges.

HIGHER RISK COUNTRIES
When undertaking a risk assessment businesses should become familiar with countries that are known or suspected of sponsoring terrorism and terrorist organisations. Customers domiciled in such countries or transactions being sent to or originating from those jurisdictions should receive additional scrutiny. 

DUE DILIGENCE
In detecting terrorism financing businesses should not underestimate the importance of customer due diligence and ongoing customer due diligence.

CHARITIES
A common methodology of financing terrorism is the misuse of charities. Charities are easy to form, have access to substantial funds, can be cash intensive, enjoy public trust and have legitimate reasons to operate in areas of conflict or where terrorist groups are known to exist.

Businesses who undertake transactions on behalf of charitable organisations may wish to consider enhanced due diligence on the owners / operators of the charity, as well as the level of due diligence that the charity conducts on the recipients of donations.

NZ DESIGNATED TERRORIST ENTITIES
The following link provides details of persons and entitites with whom transactions must not take place - http://www.police.govt.nz/service/counterterrorism/designated-terrorists.html