New payment systems: potential counter-terrorist financing risks and the legal response in the United Kingdom

The rapid development, increased functionality, and growing use of new payment systems (NPSs) has created global challenges for countries and private-sector institutions in ensuring that these systems are not misused for money laundering and terrorist financing purposes. This development has attracted the attention of anti-money laundering and countering terrorist financing (AML/CTF) authorities as they seek to develop and implement AML/CTF regulations for NPSs. This chapter examines the fundamental trend towards electronic payments. The basic need for terrorist organisations to raise, move, and use funds has remained constant; however, their methods of raising and managing funds have evolved over time. This chapter focuses on the CTF risks of NPSs especially within the UK legal regime. This approach differs from other literature in the field, which deals solely with the UK CTF regime or with other international standards, usually migration from paper focusing on the criminalisation of terrorist financing. The chapter will consider the CTF regime in the United Kingdom in the context of emerging innovative payment systems.