The act of giving money or other forms of support to lone terrorists or other non-state actors is known as terrorism financing. Most countries have implemented measures to counter terrorism financing often as part of their money laundering laws. But most of it does not have any consistency with international organizations’ rules. The menace of terrorism has always been a threat to global peace and financing the activities by states and other sources is on the rise. Read here to know more about counter terrorism financing.
Terrorists require financing to recruit and support members, maintain logistics hubs, and conduct operations.
Thus, preventing terrorists from accessing financial resources is crucial to successfully counter the threat of terrorism.
However, many States lack the legal and operational frameworks and technical expertise needed to detect, investigate and prosecute terrorist financing cases.
What is Terrorism Funding?
Terrorist financing involves the solicitation, collection, or provision of funds with the intention that they may be used to support terrorist acts or organizations. Funds may stem from both legal and illicit sources.
More precisely, according to the International Convention for the Suppression of the Financing of Terrorism, a person commits the crime of financing terrorism “if that person by any means, directly or indirectly, unlawfully and willfully, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out” an offense within the scope of the Convention.
The primary goal of individuals or entities involved in the financing of terrorism is therefore not necessary to conceal the sources of the money but to conceal both the financing and the nature of the financed activity.
Misuse of emerging technologies for terror financing
- Terrorists and terrorist organizations are quite familiar with the intricacies of contemporary weapons and information technologies, including the Dark Web and cryptocurrency.
- Countries should be concerned about how terrorism has evolved from dynamite to the metaverse and from AK-47s to virtual assets.
- Distributed infrastructure is utilized for online radicalization and cyberterrorism.
Organized crime and terrorism
- Organized crime shouldn’t be seen as different from terrorism as these gangs frequently have close ties to terrorist organizations.
- The proceeds from the trafficking of drugs, weapons, and other contraband are funneled into terrorism.
- Financial crimes and money laundering have both been documented to contribute to the funding of terrorism.
Money laundering and terrorism financing
- Money laundering is the process of concealing the illicit origin of the proceeds of crimes.
- Terrorist financing is the collection or provision of funds for terrorist purposes.
- In the case of money laundering, the funds are always of illicit origin, whereas in the case of terrorist financing, funds can stem from both legal and illicit sources.
- The primary goal of individuals or entities involved in the financing of terrorism is therefore not necessary to conceal the sources of the money but to conceal both the funding activity and the nature of the funded activity.
“No Money for Terror” Conference (Counter-Terrorism Financing)
The conference “No Money for Terror” (NMFT) was started in 2018, as an initiative of the French government, to specifically focus on cooperation between countries to plug terror funding.
The conference offers a unique platform for participating nations and organizations to deliberate on the effectiveness of the current international regime on Counter Terrorism Financing and the steps required to address emerging challenges.
2022 version of the NMFT conference was held in New Delhi, India recently.
At the conference, the delegates discussed Emerging Trends in terror financing, misuse of New Emerging Financial Technologies, and international cooperation in the field of terror financing to effectively achieve the objective of ‘No Money for Terror’.
The major issues discussed were:
- Preventing diversion from legal financial instruments by fighting anonymity in financial networks,
- Restricting the use of proceeds of other crimes for terrorist activities,
- Preventing the use of new financial technologies, virtual assets like crypto-currencies, wallets, etc., for terror activities,
- Eliminate the use of Illegal Channels, Cash Couriers, and Hawala by Terror Networks
- Prevent the use of Non-Profit Organisation, NPOs Sector to Spread Terror Ideology
- Continuous capacity building of counter-terror and financial intelligence agencies of all countries.
An approach was suggested based on the following pillars for combatting terrorism financing:
- Establish a comprehensive monitoring framework involving cooperation, coordination, and collaboration among all intelligence and investigative agencies.
- The strategy of “Trace, Target, and Terminate”, to be adopted from low-level economic offenses to more organized economic crimes,
- Strengthening and harmonizing the legal structures related to terror finance,
- Developing a robust mechanism against the misuse of Next Generation Technology, and,
- Strengthening the legal and regulatory framework for asset recovery.
Every country will have to identify and act against organizations pushing youths towards radicalization and take stringent action against them. The efforts on counter terrorism financing need to be made stringent and compliant with international mandates such as the global programme on money laundering.
Some countries, their governments, and agencies have made ‘Terrorism’ their State Policy; in these terror havens, it is necessary to shackle their unrestrained activities along with a strict economic crackdown and all the countries of the world will have to make up their minds on this, rising above their geo-political interests.
All countries must implement the standards, and recommendations set by the Financial Action Task Force (FATF), not just on paper, but in spirit.
-Article written by Swathi Satish