A Broad Definition with Global Reach
Under U.S. law, the phrase “material support to terrorism” is intentionally broad. The Anti-Terrorism Act (ATA) and related statutes such as 18 U.S.C. § 2339B defines material support to include not only weapons or financing, but also services, training, facilities, transportation, or even routine commercial transactions if they benefit a designated terrorist group.
This scope has been upheld repeatedly by U.S. courts. A single payment routed through a U.S. correspondent bank is enough to establish jurisdiction. For multinational corporations and financial institutions, this means exposure is not limited to direct dealings with sanctioned entities, it can extend to indirect or seemingly incidental support.
Case Study: The Lafarge Prosecution
The 2022 prosecution of French cement giant Lafarge S.A. remains a landmark example of ATA liability. The company admitted to paying millions in “protection money” to ISIS and al-Nusra Front to keep its Syrian operations running. The U.S. Department of Justice argued that these payments, even though intended to protect staff and maintain business continuity, constituted material support to terrorism. Lafarge ultimately paid $778 million in penalties.
The Lafarge case underscores a key compliance takeaway: intent does not erase liability. Even payments framed as extortion, protection, or “business necessity” can be prosecuted under the ATA if they provide value to a terrorist organization.
Financial Institutions in the Crosshairs
Banks and financial intermediaries are particularly exposed. By processing funds that ultimately support terrorism, even unknowingly, they can face civil lawsuits from victims or criminal enforcement actions by the DOJ. Recent sanctions against Mexican banks accused of laundering money for cartels illustrate how regulators are extending this logic to narco-terrorism cases.
The ATA’s extraterritorial reach means liability can attach if:
- A U.S. correspondent account was used.
- A transaction passed through the U.S. financial system.
- The harm ultimately impacted U.S. nationals.
This creates a global compliance obligation: financial institutions must not only screen direct clients, but also examine counterparties, shell entities, and layered transactions that could conceal terrorist financing.
Civil Liability and the Rise of Victim Lawsuits
In addition to government prosecutions, the ATA includes provisions for civil suits brought by victims of terrorism. These lawsuits allow plaintiffs to seek treble damages from companies whose services or funds are alleged to have supported terrorist acts.
The result has been an increase in litigation against banks, logistics firms, and service providers accused of indirectly enabling terrorism through payment channels, correspondent banking, or service provision. Even if the claims are ultimately dismissed, the reputational damage and legal costs can be immense.
Compliance Beyond the Check-the-Box
Traditional compliance tools often fall short in this environment. Static sanctions lists and basic watchlist screening rarely capture the shell structures, layered ownership, and alias networks that terrorist and cartel organizations deploy to disguise their operations.
Dynamic, intelligence-driven monitoring is required to identify risk at scale. This includes:
- Network-based analysis to surface indirect connections.
- Continuous monitoring of counterparties and intermediaries.
- Integration of adverse media, court filings, and investigative reporting into transaction reviews.
How Sigma360 Helps Institutions Stay Ahead
At Sigma360, we recognize that ATA liability is no longer a theoretical concern. With cartels designated as Foreign Terrorist Organizations in 2025, institutions are navigating an enforcement landscape where material support charges can arise from indirect or seemingly minor interactions.
Our platform combines sanctions data, adverse media, global corporate registries, and proprietary cartel threat intelligence to uncover hidden affiliations before they become liabilities. By surfacing over 30,000 direct and indirect cartel-linked connections and more than 100,000 additional high-risk entities, Sigma360 helps compliance teams:
- Detect and remediate exposure before regulators or plaintiffs act.
- Reduce false positives while focusing on material risks.
- Build an audit-ready defense aligned with evolving enforcement standards.
Conclusion
The Lafarge case and recent enforcement actions send a clear message: under the Anti-Terrorism Act, even indirect support can bring devastating legal and reputational consequences. For financial institutions and global corporates, the question is no longer whether liability exists, but how to identify and mitigate it before regulators and courts step in.
