Counterterrorist Financing, Still a Work in Progress 20 Years After 9/11, Now a Lower Priority

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Terrorist Financing

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Stephen Reimer, a research fellow at the Royal United Services Institute, told moneylaundering.com that the fundraising methods used by Islamist terrorists who carried out attacks in Europe over the past decade stayed “quite consistent” and broadly fell into two categories: “seemingly licit” forms of income and petty crime.

Terrorists have raised money through small loans, government benefits, collecting peer-to-peer donations and selling their personal belongings. Others have peddled illicit drugs or counterfeit goods, then funneled the profits to small terrorist cells or individual terrorists to fund an attack.

“The reality is that the threat in Europe has shifted away from direct involvement [by terrorist groups] to autonomous activity, but the tools and CFT [combating the financing of terrorism] responses haven’t,” Reimer said. “There is a need to recalibrate the CFT regime to meet the new threat.”

Both individual nations in Europe and the EU as a whole have sought to identify terrorist financing methods as they emerged and tighten their controls in response, Reimer said.

The EU, for example, significantly lowered the maximum threshold to which individuals can load prepaid cards anonymously after learning that the perpetrators of the November 2015 shootings in Paris used them to pay for cars and apartments in the 48 hours preceding the attacks.

No European nation has suffered more from recent acts of terrorism than France. From January 2015 to December 2018, the country has dealt with no less than 13 terrorist attacks that left 251 dead and 1,131 injured combined.

France extended stricter vetting requirements to the cryptocurrency industry after national authorities arrested dozens of individuals in October 2020 who allegedly funneled hundreds of thousands of euros in bitcoins and cryptocurrency “coupons” to the Islamic State group and Hayat Tahrir Al-Sham, al-Qaida’s affiliate in Syria.

Several European law enforcement agencies have provided the private sector with red flags of terrorism-related “microphenomena,” including last-minute purchases of airline tickets to Turkey by foreign fighters traveling to Syria, but have not managed to do the same for lone wolf suspects, Reimer said.

Six months before the attacks in Paris, German authorities extended their ban on Hezbollah’s military component to cover the organization’s political function as well, eliminating what U.S. Ambassador Richard Grennell had previously labeled an “artificial distinction” that allowed the group to openly raise funds in Europe’s largest country and economy.

Germany’s campaign against terrorist financing and financial crime in general have improved, albeit slowly and with significant loopholes still intact, said Schindler, who previously investigated terrorism on behalf of Germany’s federal government.

“German law still allows for a certain legal business structure, the GBR, which can be created very quickly and does not require public disclosure of any information concerning beneficial owners or financial data,” he told moneylaundering.com. “It is not a coincidence that almost all violent far-right organizations in Germany use this type of structure for their financial activities.”


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