The 62-year-old man has is being held by police while a property in Edinburgh, Scotland is being searched.
Elsewhere, two men have appeared in court charged with directing terrorism in Northern Ireland.
Shea Reynolds, 26, and Patrick McDaid, 50, were accused of attending a meeting in Omagh, Co Tyrone, as part of their activities.
They are also accused of IRA membership. The offences relate to earlier this year up until last month.
Mr Reynolds, from Belvedere Manor in Lurgan, Co Armagh, was charged with four offences.
These included conspiracy to possess Semtex explosives to endanger life and intending to commit acts of terrorism through attending the meeting in Omagh.
Mr McDaid, from Magowan Park in Derry, faces three charges including intending to commit acts of terrorism.
Five other men and two women also remain in custody, after being arrested on Tuesday.
