Terrorism financing

Main article: Terrorism

Terrorism financing refers to activities that provides financing or financial support to individual terrorists or terrorist groups.[1] A government that maintains a list of terrorist organizations normally will also pass laws to prevent money laundering being used to finance those organizations.

Laws against money laundering and terror financing are used around the world. In the United States, the Patriot Act was passed after the September 11 attacks, giving the government anti-money laundering powers to monitor financial institutions. The Patriot Act has generated a great deal of controversy in the United States since its enactment. The United States has also collaborated with the United Nations and other countries to create the Terrorist Finance Tracking Program.[2][3]

Laws attempt thwarted the financing of terrorism (CFT) and anti-money laundering. Initially the focus of CFT efforts was on non-profit organizations, unregistered money services businessess (MSBs) (including so called underground banking or ‘Hawalas’) and the criminalisation of the act itself. The Financial Action Task Force on Money Laundering (FATF) made nine special recommendations for CFT (first eight then a year later added a ninth). These nine recommendations have become the global standard for CFT and their effectiveness is assessed almost always in conjunction with anti-money laundering.[4]

The FATF Blacklist (the NCCT list) mechanism was used to coerce countries to bring about change.

Money laundering

Main article: Money laundering

Often linked in legislation and regulation, terrorism financing and money laundering are conceptual opposites. Money laundering is the process where cash raised from criminal activities is made to look legitimate for re-integration into the financial system, whereas terrorism financing cares little about the source of the funds, but it is what the funds are to be used for that defines its scope.

An in-depth study of the symbiotic relationship between organised crime and terrorist organizations detected within the United States of America and other areas of the world referred to as crime-terror nexus points has been published in the forensic literature.[5][6][7][8][9][10] The Perri, Lichtenwald and MacKenzie article emphasizes the importance of multi-agency working groups and the tools that can be used to identify, infiltrate, and dismantle organizations operating along the crime-terror nexus points.

Terrorists use low value but high volume fraud activity to fund their operations. Paramilitary groups in Northern Ireland are using legitimate businesses such as hotels, pubs and taxi operators to launder money and fund political activities. Even beyond Ireland, terrorists are buying out/controlling front-end businesses especially cash-intensive businesses including in some cases money services businesses to move monies. Bulk cash smuggling and placement through cash-intensive businesses is one typology. They are now also moving monies through the new online payment systems. They also use trade linked schemes to launder monies. Nonetheless, the older systems have not given way. Terrorists also continue to move monies through MSBs/Hawalas, and through international ATM transactions. Charities also continue to be used in countries where controls are not so stringent.

Suspicious activity

Operation Green Quest, a US multi-agency task force established in October 2001 with the official purpose of countering terrorism financing considers the following patterns of activity as indicators of the collection and movement of funds that could be associated with terrorism financing:

It would be difficult to determine by such activity alone whether the particular act was related to terrorism or to organized crime. For this reason, these activities must be examined in context with other factors in order to determine a terrorism financing connection. Simple transactions can be found to be suspect and money laundering derived from terrorism will typically involve instances in which simple operations had been performed (retail foreign exchange operations, international transfer of funds) revealing links with other countries including FATF blacklisted countries. Some of the customers may have police records, particularly for trafficking in narcotics and weapons and may be linked with foreign terrorist groups. The funds may have moved through a state sponsor of terrorism or a country where there is a terrorism problem. A link with a Politically Exposed Person (PEP) may ultimately link up to a terrorism financing transaction. A charity may be a link in the transaction. Accounts (especially student) that only receive periodic deposits withdrawn via ATM over two months and are dormant at other periods could indicate that they are becoming active to prepare for an attack.

Germany

In July 2010, Germany outlawed the Internationale Humanitäre Hilfsorganisation (IHH), saying it has used donations to support projects in Gaza that are related to Hamas, which is considered by the European Union to be a terrorist organization,[11][12] while presenting their activities to donors as humanitarian help. German Interior Minister Thomas de Maiziere said, "Donations to so-called social welfare groups belonging to Hamas, such as the millions given by IHH, actually support the terror organization Hamas as a whole." [11][12]

Australia

In 2009, an investigation carried out by the Australian Transaction Reports and Analysis Centre (AUSTRAC) and other agencies, determined that funds were being sent from Australia for use by the Somalia-based terrorist group, al-Shabaab. Money was remitted, with false names used to obscure the money trail. This investigation lead to the ultimate arrest of the suspects on charges of conspiring to commit a terrorist attack on an Australian army base.[13]

In 2014, Australian authorities feared that money being transferred from Australia could be used for terrorism in Somalia. In 2015 Australian banks ceased providing money-transfer facilities to Somalia.[14][15]

See also

References

  1. ↑ Financial Weapons of War, Minnesota Law Review (2016), available at: http://ssrn.com/abstract=2765010
  2. ↑ "EU ups its fight against terrorist financing". DW.COM.
  3. ↑ "DGs - Migration and Home Affairs - What we do - ...Crisis & Terrorism - Terrorist Finance Tracking Programme".
  4. ↑ "FATF-GAFI.ORG - Financial Action Task Force (FATF)".
  5. ↑ Perri, Frank S., Lichtenwald, Terrance G., and MacKenzie, Paula M. (2009). Evil Twins: The Crime-Terror Nexus. Forensic Examiner, 16-29.
  6. ↑ Makarenko, T. "The Crime-Terror Continuum: Tracing the Interplay between Transnational Organized". Global crime. 6 (1): 129－145.
  7. ↑ Makarenko, T (2002). "Crime, Terror, and the Central Asian Drug Trade". Harvard Asia Quarterly. 6 (3): 1－24.
  8. ↑ Makarenko, T (2003). "A model of terrorist-criminal relations". Jane's Intelligence Review.
  9. ↑ Wang, Peng (2010). "The Crime-Terror Nexus: Transformation, Alliance, Convergence". Asian Social Science. 6 (6): 11–20.
  10. ↑ Cornell, S (2006). "The narcotics threat in greater Central Asia: from crime-terror nexus to state infiltration?". China and Eurasia Forum Quarterly. 4 (1): 37–67.
  11. 1 2 "Germany bans group accused of Hamas links". ynet.
  12. 1 2 "Germany Outlaws Charity Over Alleged Hamas Links". Haaretz.com.
  13. ↑ "Case studies - Remittance services (money transfers): Case 21 – Australian terror suspects sent funds to Somalia to support terrorist group". AUSTRAC. Retrieved 19 April 2015.
  14. ↑ McGrath, Pat (17 October 2014). "Somali Australians plead with Westpac to not close remittance accounts". ABC News. Retrieved 19 April 2015.
  15. ↑ Armitage, Laura (30 March 2015). "Westpac to stop Somali money transfers on March 31". Herald Sun. Retrieved 19 April 2015.

Further reading

KYC

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