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Terrorist Finance: Behind the scenes

Hrisoula Pithoula is writing…

Even though there is no universally accepted definition for terrorism, everyone agrees that it is one of the outmost threats to human rights, socioeconomic stability, and freedom.

Europe still to this day, faces the persistent pestilence of this horrible act. From 2007 to 2022, 2.478 deaths from terrorist acts have occurred in Europe only. In 2021 Europe experienced 15 completed, foiled, and failed attacks. A result of jihadist attacks were two deaths in Spain and France in 2021. The terrorist threats are being increased by the intensification of regional rivalries, climate change and resource scarcity, as well as demographic growth, state fragility and shadow economy. For these operations to come through, money need to be transferred and used either from legal or illegal sources. Terrorist finance (TF) is what occurs behind closed curtains in order to create a fertile ground for terrorism to thrive.

Terrorist financing may look similar to money laundering, however there are certain differences that set them apart. Money laundering is the disguise of financial assets in order to conceal the illegal activities which created them. So, in order for money laundering to exist, money, obtained through illegal sources need to be involved. However, this is not the case with TF. Terrorism financing is the act of providing funds to terrorists or terrorist organizations in order for them to carry out terrorist acts or to benefit any terrorist or terrorist organization. These funds may come from illegal sources (drugs, trafficking etc.) or from legal ones (private donations, company revenues). This is probably the biggest obstacle that arises in the efforts to combat TF, because of the detection and the tracking of these funds. To conclude, TF may or may not include illegally obtained funds, but ml certainly does. Also, in the case of money laundering, the financial assets may not finance illegal activities. However, in TF the financial assets, legally obtained or not, are supplying terrorist activities. It also needs to be noted that in the context of TF, the sums that are being involved are of smaller quantity than these of money laundering.

Apart from the examples that have already been mentioned, there are more ways to legally finance terrorist activities. One of these ways is crowdfunding. Crowdfunding is a very useful way to reach a large audience to raise money for a charitable cause, to fund a start-up, or finance a creative project. Apart from these legal and legitimate activities though, crowdfunding can be exploited for illegal purposes such as TF. These crowdfunding campaigns have limited or ambiguous information concerning its goals and beneficiaries, or feature hateful rhetoric, imagery or symbolism that support terrorist or extremist causes. Another way with which money can finance terrorist acts and organizations are digital currencies such as crypto. The advanced privacy features that these transactions systems entail, complicate the detection of terrorist funds, especially in countries with little to no regulatory frameworks for the matter. Even though digital currencies are not the main source of funding for terrorist acts at the moment, it is quite possible that it becomes one in the near future.

These practices, create the right conditions for terrorism to be spread and to succeed. From whoever is practiced, state or non-state actors, authoritarian regimes or extremist groups, terrorism causes pain, destruction and death, and is especially targeted towards vulnerable social groups such as minorities, civilians etc. In order for terrorism to stop, the efforts need to start from the battle against terrorism financing.

Bibliography:

  • PBS, The role of cryptocurrency in financing terrorist organizations, https://www.pbs.org/newshour/show/the-role-of-cryptocurrency-in-financing-terrorist-organizations

 

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