A man has been charged with attempted possession of a prohibited weapon in relation to the Irish National Liberation Army (INLA).
He is due to appear at Derry Magistrates' Court on 19 December.
The PSNI also reported the 45-year-old to the Public Prosecution Service (PPS) for possession of class C controlled drugs with intent to supply and possession of criminal property, namely cash.
He was arrested under the Terrorism Act by detectives on Wednesday alongside a 57-year-old woman, who police say has been released unconditionally.
A 40-year-old man was also arrested for possession of class C controlled drugs with intent to supply and possession of criminal property but was released without charge.
The arrests came amid a number of searches that were carried out in the Galliagh, Buncrana Road and Ballymagroarty areas of Derry, the force said.
These raids were in relation to INLA criminality including the supply of controlled drugs and illicit cigarettes, money laundering and a recent paramilitary-style attack on 14 November.
The PSNI said a quantity of class A and B drugs were seized during the search in the Galliagh area and a 17-year-old boy was arrested on suspicion of possession with intent to supply.
Quantities of class C drugs were seized during the searches in the Ballymagroarty and Buncrana Road areas, as well as documentation, phones, computers and cash.
The raids follow an operation on Tuesday in which PSNI officers alongside customs officers visited ten shops in the Derry and Strabane areas.
More than 36,000 illicit cigarettes and 5kg of illicit tobacco were seized.
Counterfeit clothing, footwear, DVDs and CDs were confiscated in three of the shops, police said.