Rising Terrorism Risks
The past year, Australia faced a spate of attempted and actual violent attacks, some officially classified as terrorist in nature, others not. In response to these incidents, in August 2024, the Australian Government raised the national terrorism threat level from ‘Possible’ to ‘Probable’ (the terrorist threat rating has five scales, from more to less severe: certain, expected, probable, possible and not expected). Under this designation, authorities assessed that there was a greater than 50% likelihood of a domestic terrorist attack or attack planning within the following twelve months. The increased terrorism threat in Australia is also reflected in the Global Terrorism Index 2025 (GTI), which ranks Australia at the 46th place, compared to the previous year, in which Australia was ranked in the 57th place (GTI 2024). Higher-risk countries are placed higher in the index.
This article discusses Australian counter-terrorism efforts, which is particularly timely as the country approaches the 2026 implementation of the Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) Amendment Bill. The legislation will bring thousands of additional businesses under the AML/CTF regime, requiring them to use their business intelligence to help identify and disrupt terrorism financing.
The Facts
On 13 April 2024, six people were killed in a stabbing attack at a Sydney shopping centre. The attacker was identified as Joel Cauchi, a white Christian 40-year-old man and an Australian national, who died during the incident. The majority of the people injured and killed were women, and New South Wales Police Commissioner Karen Webb stated that Cauchi deliberately targeted women. Still, Cauchi’s attack has not been categorised as a terrorist event, as it appeared not to be motivated by a larger political cause. The incident was instead connected to mental ill-health. This example is included in this article because of the severity of the attack.
On 15 April 2024, a 16-year-old boy attacked Bishop Emmanuel during a live-streamed sermon. Bishop Mar Mari Emmanuel, who preaches under the Eastern Syriac tradition of Christianity, is a well-known ultra-conservative figure with a big online following. Bishop Emmanuel, four church-goers and the attacker suffered non-life-threatening injuries. The attacker was promptly arrested, and after the arrest, Australian police said they were satisfied this was a case of religious extremism. At the time of the arrest, New South Wales Police Commissioner Webb stated that the attacker had not been on any terror watch list.
On 24 April 2024, Australian police arrested seven teenagers (aged 15 to 17), claiming the youths were “likely” plotting an attack, although no specific plan or target was identified. The arrests were part of a wave of counter-terrorism raids across Sydney, following the stabbing of Bishop Emmanuel. Australian police stated that the suspects were believed to share a "religiously motivated violent extremist ideology", were linked to the 16-year-old boy charged with a terror offence in relation to the stabbing of Bishop Emmanuel, and were under surveillance following the stabbing. Both the 16-year-old charged with terrorism and the seven teenagers arrested appear to have been influenced by jihadist ideology; however, media reports do not connect them to any specific jihadist group.
Global Trends
The radicalisation of younger and younger individuals is not unique to Australia. Cecilia Polizzi writes in an expert contribution to the GTI that narratives that promote violent actions “find resonance with young, aspiring militants within online forums, leading to a rise in self-radicalisation and lone-wolf terrorism among young people”. The cause of this youth radicalisation is rooted in the technological innovations of the past decade. New technologies support the decentralisation of terror groups and allow them to operate anonymously and transnationally; algorithms are exploited to fuel radicalisation by creating echo chambers and reinforcing ideological content; and invitation-only online spaces (e.g., Telegram) are used by recruiters to avoid surveillance.
The consequence is that children and young people are easily targeted by recruiters who target young people because they represent a long-term investment and because their attacks are harder to detect, monitor, and disrupt, with adolescents and children often lacking a criminal record.
The rise in juvenile terrorist offenders has coincided with the emergence of unclear ideologies and lone actors, factors that collectively make counter-terrorism increasingly complex. According to the Australian Security Intelligence Organisation, the nature of terrorism threats in Australia has shifted, making counter-terrorism efforts more challenging. In particular, there has been a move from specific extremist ideology to ‘hybrid’ ideologies that encompass a mix of grievances, and the rise of lone actors or small, loosely organised groups. Together, these trends make violent acts significantly more unpredictable and harder to detect or prevent.
These developments are not unique to Australia. The GTI highlights similar patterns across Western countries. In 2024, fewer than 8% of attacks in these regions could be attributed to a recognised terrorist group, and lone actor terrorism surged, with incidents increasing from 32 to 52 from the previous year. These dynamics are closely connected: the GTI notes that many lone actors now build their personal ideologies by selectively drawing from a range of extremist narratives, a phenomenon Paige Pascarella described nearly a decade ago as “Ideology à la Carte.” Pascarella observed that law enforcement often attempts to categorise violent individuals within established extremist groups to assess threat levels and motivations. However, when ideologies are self-constructed, motivations become murkier, and more importantly, less predictable. This undermines traditional counter-terrorism models, which depend heavily on identifying clear ideological affiliations.
Counter-Terrorism Financing
Professional service providers, when they offer certain designated services (i.e., lawyers, accountants, trust and company service providers, real estate professionals, and precious metal dealers – also known as ‘Tranche 2’ entities), will find themselves dealing with counter-terrorism financing for the first time in July 2026. In addition, the AML/CFT Amendment Bill expands the definition of designated virtual asset services, making more virtual asset service providers new reporting entities under the AML/CTF Act.
This process will involve thousands of businesses, and it represents the biggest amendment to the AML/CFT regime in Australia since its inception in 2006. These businesses will need to familiarise themselves with some key concepts.
Financing of terrorism is providing or collecting funds for a terrorist act, or to fund activities that support terrorism. Financing of terrorism is a standalone offence. It is not necessary to demonstrate that the funds were ultimately used to carry out a terrorist act. According to the Terrorism Financing National Risk Assessment in Australia (TFNRA), on the one hand, Australian domestic terrorism risks relate primarily to self-funded lone actors or small cells. On the other hand, Australian international terrorism risks include the risk of Australians providing financial support to overseas groups through the national financial system and legal structures. The TFNRA does not suggest that funds are sent from abroad to finance terrorism in Australia.
Most terrorism financing is self-funded, but other methods of raising funds include social media and crowdfunding, as well as legitimate charities and non-profit organisations. Terrorism funding is difficult to detect because the amount transferred is generally small, and transactions mirror legitimate financial activities. High-risk channels for moving funds for terrorist activities are banks, remittance services, non-bank online payment providers, and digital currencies. In particular, digital currency is a key channel for moving and storing funds for nationalist and racist violent extremists.
As discussed above, often underage, lone actors or small groups are dangerously unpredictable because they don’t fit in pre-existing boxes. New and existing reporting entities should look closely at their terrorism financing risks, particularly focusing on assessing the potential terrorism risks associated with new customers at the time of onboarding and through their relationship with the customers.
Conclusions
Starting from next year, thousands of new reporting entities will be required to submit financial intelligence to aid in counter-terrorism financing efforts. The practical challenges of counter-terrorism financing are substantial.
Recent patterns suggest that Australian terrorist threats are increasingly driven by young, lone actors who are only loosely affiliated with extremist ideologies and lack formal ties to recognised terrorist groups. This shift significantly heightens the unpredictability of attacks, making them harder to detect and prevent through conventional means.
Both new and existing AML/CTF reporting entities should prioritise training on terrorism financing, with a good starting point being the TFNRA and the GTI. Importantly, even businesses with low exposure to terrorism financing risk should remain vigilant and aware of these risks, as the consequences of terrorist attacks can be devastating.
