In a report captioned 'Emerging Terrorist Financing Risks', FTAF notes: "Smuggling of goods, including cigarettes, and associated tax fraud have also been identified as fundraising tools for terrorist organisations. Smuggling of cigarettes is an increasing TF threat in some regions such as West Africa."

According to the Report, Tax crimes may involve the failure to disclose actual sales made by a business to the tax authorities. These profits were then channeled to fund the terrorist group's activities. In Finland, four Finnish citizens were arrested in October on suspicion of having committed offences including tax fraud in order to finance extremist activities in Syria and Finland.

This Report builds on the findings of the Financing of the Terrorist Organization of the Islamic State in Iraq and the Levant (ISIL) report and takes into account the activities of a broader range of terrorist organiz ations. The FATF ISIL report contains two case studies involving the use of tax refunds to fund FTFs.

ISIL extorts the income of all inhabitants in areas where it operates. A FATF report last year noted that Iraqi government employees remaining in ISIL territory travel to Kirkuk and elsewhere to withdraw their salaries in cash, and return to ISIL-held territory where their salaries are then "taxed" by ISIL at rates of up to 50%. Furthermore, ISIL has reportedly imposed specific "taxes" on the movement of goods in parts of Iraq where it operates and extorts money from the local population (including "taxes" on customer withdrawals from private banks, fuel and vehicle taxes and school fees for children) or so-called "charitable giving" (soliciting involuntary "donations" to purchase momentary safety or temporary continuity of business).

The latest Report focuses onTF threats and vulnerabilities posed by foreign terrorist fighters (FTFs), fund-raising through social media,new payment products and services, andthe exploitation of natural resources.

TF sources include extorting money from farmers and crop producers, and other resource extraction and production facilities. Across Africa, criminals, militias and terrorists illicitly "tax" charcoal, commonly up to 30% of the value. The illegal trading and taxation at roadblock checkpoints and ports from charcoal traffic is considered to be Al-Shabaab's primary source of income which is valued at $38-56 million, it says.

It adds: "the Spanish authorities have also detected that members of a terrorist cell will participate as figureheads in value-added tax (VAT) fraud and scams in other EU territories by obtaining funds for covering the costs of their own travel to conflict zones. The proceeds from this activity are often managed in cash outside the formal financial system."