Mara Wesseling’s briefing of 2021 on the European system of countering terrorism financing and the European proposals (AML Package) is still relevant.

The introduction:

On 20 July 2021, the European Commission presented what it calls an ‘ambitious package of legislative proposals to strengthen the EU’s anti-money laundering and counterterrorism financing (AML/CTF) rules’. In this briefing paper, Mara Wesseling examines the four legislative proposals with a focus on CTF, and asks if these proposals will enhance the EU’s effectiveness in this area. The paper argues that the measures might be the right response with regard to the failures identified after the various AML compliance-related scandals but seems to be a mismatch when it comes to improving CTF effectiveness and responding to the latest terrorism financing threats. The paper also seeks to make a new diagnosis on which a policy enhancing CTF effectiveness should be based. Finally, recommendations are made for improving CTF effectiveness.

In her briefing she comments that the AML Package is not are not expected to greatly enhance the EU’s effectiveness in this area. One of the fundamental challenges of detecting terrorism financing is the identification of terrorists and their sources of finance ahead of their actions. Their type of financing is not typical at all.
Wesseling is concerned that policymakers in Brussels get lost in their need for harmonisation and standardisation and have no interest in practicality and effectiveness. This concern is justified and does not only apply to combating terrorist financing.

The drafts of the AML Package show that policymakers do not wish to learn from science and lessons learned, despite their appeal to an evidence-based approach

Wesseling was one of the authors of a relevant publication on terrorism financing (pdf, in Dutch) that I wrote about in 2020.