Financial Intelligence and the Evolving Threat from Daesh

Main Image Credit The Bourse in Brussels after the terrorist attacks of March 2016. Returning jihadis are not untraceable. Courtesy of Romaine/Wikimedia

As the threat from Islamic State evolves, security responses must too. Financial intelligence must continue to play a critical role in identifying and disrupting new threats, in investigating foreign terrorist fighters and prosecuting their supporters.

As an international military force enters the Iraqi city of Mosul, one of the key strategic and financial strongholds of Daesh’s key strategic and financial strongholds (also known as the Islamic State of Iraq and Syria, or ISIS), the flow of foreign fighters to Syria and Iraq has all but stopped.

The torrent of up to 2,000 fighters per month that once crossed the border from Turkey into Syria is now barely a trickle of 50. This military progress in the fight against Daesh is welcome.

But the changing strategic landscape in Syria and Iraq has a corresponding effect on the threat picture in the UK and elsewhere in Europe. There are fears thatreturnees and those who have travelled to join Daesh now seek to return home and those still inspired by the group and who would have once travelled to join them respond to the calls from the Daesh leadership to mount attacks in their own countries.

In both cases, the application of financial intelligence (FININT) – revealed by recent court cases to have successfully identified supporters and facilitators of those who have already travelled to Syria and Iraq – must once again play a central role.

Until recently, the focus of the security authorities was on the identification and prevention of potential travellers to zones of conflict.

But now their primary concerns have become both preparing for and intercepting those fighters who flee the collapsing ‘Caliphate’ and disrupting those who remain at home seeking to stage Daesh-inspired attacks.

Some of these volunteers aim to return home to fly the black flag of jihad over 10 Downing Street or the White House or at least mount the sort of devastating attacks seen in Belgium and and France this year. Others, disenchanted with the ways of Daesh, may simply want to escape the barbarism. But, whatever their motivation, finance will be an important element of their plans.

The risk posed by those seeking to return home can hardly be over-stated. Thousands of fighters have travelled to Syria and Iraq; 850 from the UK alone, with just under 50% thought to have returned home.

Given the fact that the destruction and death wrought in Paris andand Brussels were carried out with the help of a relatively small number of returned fighters, it is clear that we are entering a new, more dangerous and challenging phase for the security and law-enforcement authorities.

Yet these returning fighters are not untraceable, if only because, in order to return they need finance, and that is exactly what they are unlikely to have on hand in Syria.

Just as financial intelligence was recognised as a valuable tool in identifying those who had travelled or were intent on travelling to Syria along with their supporters and facilitators, so too can this source of information once again play a valuable role in counterterrorism.

Indeed, given the fact that the fighters who have travelled to Syria and Iraq are already, on the whole, known to the security authorities and that these ‘persons of interest’ may be returning to an environment where monitoring of financial activity is highly sophisticated, the financial sector can play an even more valuable role in identifying and tracking them.

In recent months, a number of trials of terrorism cases have revealed the extent to which finance and the intelligence gathered through financial means have contributed to prosecutions.  

Consider the case of Musadiqur Rohaman and his wife, Zohura Siddeka, who travelled from Walsall (in England’s Midlands), to join Daesh in 2014. Two of Rohaman’s brothers and a family friend were convicted in August 2016 of raising funds by selling his car and family valuables and sending the money to him via Western Union. They had claimed that the funds were to help him and his wife return to the UK.

As part of the investigation, the financial ecosystem surrounding Rohaman and his wife will have been carefully mapped, exposing links and connections.

While time-consuming, building similar financial networks around each subject of interest is vital and revealing. Variations in the financial activity of the supporters of such volunteers to terrorism ­– such as out-of-character transfers overseas or unusual travel-related purchases such as airline tickets or coach bookings – may provide an early warning for the authorities.

A second area of threat concerns those volunteers inspired by Daesh who heed the calls from the group’s leadership to remain at home and mount attacks on ‘markets, roads and clubs’. These individuals are more challenging to identify through financial means as they often merely rely on their own earnings, benefits payments or fraud.

However, financial transaction monitoring may nonetheless provide valuable leads, perhaps by connecting known foreign fighters to sympathisers who have been unable to travel.

The rapid rise of foreign terrorist fighters in recent years has presented security authorities and law enforcement with a significant challenge.  

Leveraging the ability of financial institutions to track and monitor financial transactions for suspicious activity, providing the authorities with valuable financial intelligence, has become an important element of the concerted efforts to identify and disrupt foreign fighters.

Challenges remain. Anonymous pre-paid cards and false identity documents may obscure a fighter’s true financial activity. However, the need for finance as fighters endeavour to travel home from Syria and Iraq or plan Daesh-inspired attacks at home presents an Achilles heel that the authorities must continue to seek to exploit.



Tom Keatinge

Director, CFCS

Centre for Financial Crime and Security Studies

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