Briefly described, money laundering is the process by which proceeds from a criminal activity are disguised to conceal their illicit origin. It has commonly been associated with drug trafficking where drug proceeds are laundered through the financial system or other means. It extends beyond drug trafficking (or drug money laundering) when proceeds of other criminal activities are laundered, such as from illegal arms sales and human trafficking.
Terrorism financing, on the other hand, is the provision or collection of funds for the support, advancement or perpetration of acts of terrorism. Such funds can include legitimate funds.