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This Occasional Paper surveys the counterterrorist financing landscape and seeks to provide an approach through which a more appropriate and relevant response to terrorist financing can be developed.
This Occasional Paper is targeted at policymakers, law enforcement agencies and private sector actors that are tasked with combating terrorist financing. It provides an assessment of the different forms of terrorist actor and proposes ways in which a more informed and dynamic response to terrorist financing could be developed, with the following principles in mind.
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Clarify the Objectives of CTF Measures
- Much of the research for this paper suggests that the specific objective of the global CTF regime has become confused. Thus, it is critical to ensure that CTF measures are risk-based and focus on achievable objectives, including the identification and disruption of:
- The resourcing of terrorist organisations.
- The financing of specific terrorist acts.
- Terrorist activity, by using financial intelligence proactively and reactively.
- Promote better public and expert awareness of CTF objectives so as to minimise unjustified scepticism (for instance, the argument that CTF measures are ineffective because terrorist attacks still happen).
Develop Evidence-Based CTF Strategies
- Conduct terrorist financing-dedicated national and regional risk assessments via regional FATF bodies and tailored risk assessments.
- Assess countries for terrorist financing transit risk, as well as source and destination risk.
- Ensure responsible discussion of evidence; avoid inflating terrorist financing risks such as the alleged role of wildlife trade finance for Al-Shabaab in Somalia.
- Apply greater scrutiny to terrorist actor forms and funding methods to devise targeted CTF responses.
- Identify specific vulnerabilities to target. For example, improve understanding of how groups move funds internationally.
- Identify and engage key terrorist resource suppliers (such as van hire companies or chemical retailers) to respond to the rise of low-/no-cost terrorism that does not rely on fundraising.
- Study the experience of tackling similar terrorist and related financing risks across geographies and time.
- Adapt CTF responses to developing threats including extreme right-wing terrorism that may employ novel financing methods (for example, raising funds via music festivals).
- Promote greater private sector awareness of, and engagement in, evidence gathering and activity identification.
Make Greater Use of Financial Intelligence
- Recognise that CTF measures should focus not only on depriving terrorists of funds, but also on using financial intelligence against their operations to the best effect.
- The use of financial intelligence should be integrated with more commonly exploited intelligence sources and used to support non-financial aspects of a terrorism investigation.
- Between counterterrorism and law enforcement officials:
- Target professional enablers providing ‘crime as a service’.
- Ensure links between crime and terrorist activity are investigated and exploited.
- Implement Hague Good Practices on addressing the nexus between transnational organised crime and terrorism.
- Between public and private sectors:
- Consider models such as the UK Joint Money Laundering Intelligence Taskforce’s Terrorist Financing Expert Working Group, and the Netherlands Terrorist Financing Taskforce.
- Between countries and within regions:
- Consider models such as: the Southeast Asia CTF Summit; the Europol Financial Intelligence Public Private Partnership; and the US-led Law Enforcement Co-ordination Group, an international effort to raise awareness of and increase coordination against Iran and Hizbullah’s broad range of terrorist and criminal activities around the world and the recently launched Counter-Hizballah International Partnership (CHIP).
- Develop and promote country- and region-specific terrorist financing typologies.
Engage More Actively with Risks Posed by New Technologies
- Ensure understanding of terrorist use of cryptocurrencies remains current and drive internationally consistent standards of crypto-industry supervision.
- Develop more active CTF engagement with new payment platforms and include financial technology companies in public–private information sharing partnerships.
- Dedicate resources to training financial investigators, prosecutors and judges in understanding the abuse of financial technologies.
- Drive greater focus on terrorist financing by social media companies; ensure terms of service and community standards explicitly reference and prohibit terrorist financing, and that social media companies intervene against abuse and misuse accordingly to restrict the use of their platforms for promoting calls for terrorist financing.
- FATF should underpin this requirement for social media companies to strengthen their standards and governance by building on the work undertaken by two of its regional bodies to prioritise raising awareness among its member states of the terrorist financing vulnerabilities posed by social media, including producing specific guidance.
Tom Keatinge is the founding Director of the Centre for Financial Crime and Security Studies at RUSI.
Florence Keen is a Research Fellow at the International Centre for the Study of Radicalisation, King’s College London, specialising in far-right extremism and violence.
Centre for Financial Crime and Security Studies