Suppression Of Terrorist Financing. Hamed Tofangsaz
the G8’s statement of its interest in depriving terrorism of funding, in December 1996, the UN General Assembly adopted Resolution 51/210, establishing an ad hoc committee to “address means of further developing a comprehensive legal framework of conventions dealing with international terrorism.”5 Using identical wording to that used in the G7/8 Agreement on 25 Measures for Combating Terrorism made at its meeting in Paris in July 1996, the General Assembly Resolution, also, called on all States to take steps to counteract terrorist financing by taking
steps to prevent and counteract, through appropriate domestic measures, the financing of terrorists and terrorist organizations, whether such financing is direct or indirect through organizations which also have or claim to have charitable, social or cultural goals or which are also engaged in unlawful activities such as illicit arms trafficking, drug dealing and racketeering.6
The Resolution additionally emphasized the prevention of
the exploitation of persons for purposes of funding terrorist activities, and in particular to consider, where appropriate, adopting regulatory measures to prevent and counteract movements of funds suspected to be intended for terrorist purposes without impeding in any way the freedom of legitimate capital movements and to intensify the exchange of information concerning international movements of such funds.7
In the autumn of 1998, a draft of a convention on the suppression of the financing of terrorism,8 a French initiative at a G8 summit,9 was proposed to the United Nations. At the request of the UN General Assembly,10 that draft was considered at a meeting of an ad hoc committee11 and then a Working Group of the Sixth Committee.12 After an evaluation and some amendments to the proposed convention (the content and origins of which will be discussed in the following chapters), the Sixth Committee recommended that the General Assembly adopt the proposed convention.13 On December 9, 1999, the Terrorist Financing Convention was adopted by the UN General Assembly and regarded as a significant contribution to the fight against terrorism.14 The purpose of the Convention is set out in its preamble where it notes that “the financing of the terrorism is a matter of grave concern to the international community” and the international community is “convinced of the need to enhance international cooperation among States in devising and adopting effective measures for the prevention of the financing of terrorism, as well as for its suppression through the prosecution and punishment of its perpetrators.”
In general, the Convention follows the structure and standard provisions of the UN’s previous counterterrorism conventions particularly the International Convention for the Suppression of Terrorist Bombing (hereinafter the Terrorist Bombing Convention).15 The notable example of this structural similarity is Article 3 of Terrorist Financing Convention, which limits its application to the cases involved with a transnational element.16 The Convention is also inapplicable to a situation involving armed conflict, except for a situation when a terrorist attack is carried out against a civilian, or against any other person not taking an active part in the hostilities in a situation of armed conflict.17 Similar to the Terrorist Bombing Convention, Article 20 of the Convention emphasizes that it must be applied “in a manner consistent with the principles of sovereign equality and territorial integrity of States, and that of non-intervention in the domestic affairs of other States,” while Article 22 reaffirms the exclusivity of the territorial jurisdiction of the State Parties.18
The Convention provides a list of measures directed at terrorist financing, many of which were drawn from the forty anti-money laundering recommendations of the Financial Action Task Force (hereinafter the FATF19).20 It is not surprising that the United Nations, under the influence of G7/8 which conceived of the idea of counterterrorist financing, adopted such an approach. From early in the 1990s, G7/8 had continuously emphasized the possible link between terrorism and organized crime, particularly drug trafficking.21
However, the drafters of the Terrorist Financing Convention needed to define the offense of terrorist financing in such a way that could be justifiable to, and implementable by, prospective State Parties. This chapter will present the arguments that arose during the negotiation on draft of the Convention; it will give some examples of how states have been implementing it. It seems that unlike the wording of the Convention and the insistence of the FATF, which focuses on the promotion and development of policies aimed at countering money laundering and terrorist financing, some countries have resisted adopting the offense as an independent offense, probably because it is not compatible with their criminalization principles.
Negotiations on the Structure of the Offense of Terrorist Financing
Although the draft Convention was proposed with the intention of addressing terrorist financing as a stand-alone crime, some doubted as to whether and, if so, how an ancillary act of financing could become the crime of terrorist financing. Three approaches were proposed and discussed during the negotiations on the draft Convention: (1) to treat terrorist financing as an ancillary form of participation in the offense of terrorism, (2) to criminalize only the acts of financing of terrorist groups, (3) and to consider terrorist financing as an independent crime. While the drafters adopted the third approach, other approaches have been favored when the Convention has been applied at national levels. These three approaches will be discussed in this part.22
Terrorist Financing as an Ancillary Offense
During the first and second reading of the draft Convention, reservations were expressed as to whether it was necessary to separately and independently criminalize terrorist financing. It was argued that having an ancillary nature, the financing of any of the existing offenses defined by the previous counterterrorism conventions called “sectoral conventions”23 would constitute participation or complicity in that offense, and the provisions on accomplices in the sectoral conventions were enough to cover such financing.24 The aim of the sectoral conventions is to target specific threats, such as hostage taking or hijacking, implicitly regarded “terrorist,” without attempting to define or even apply the term terrorism. Using the traditional principles of criminal law, these treaties consist of a set of provisions defining the scope and elements of these offenses by referencing specific types of acts (e.g., hostage taking or hijacking). In other words, creation of an independent offense of terrorist financing was argued to be unnecessary because general provisions for complicity in criminal law could serve the same purpose of providing a means to repress actions of helping in the commission of a terrorism offense by financing it.
This reservation was not taken into account by the drafters of the Convention. However, similar reasons have been given by some jurisdictions to refuse to establish an independent offense of terrorist financing. Aruba, for example, expressed the view that “several parts of the terrorist financing offences” as required by the Convention could be covered by the various existing provisions on accomplices in Aruba law.25 In addition, it was argued that a separate and independent offense might overlap with some of the existing crimes under its law. Aruba has since amended its law to satisfy the FATF’s requirements and introduced a new independent offense of terrorist financing.26 However, it is not clear how Aruba addresses the overlap issue (a separate and independent offense might overlap with some of the existing crimes under its law).
In some jurisdictions, terrorist financing may be considered as coming close to the notion of an inchoate crime in the sense that its criminality is not dependent on the completion of a subsequent offense. Unlike the law of complicity which targets conduct which helped, in some way, the principal to commit a crime, the law of inchoate crime aims at reaching earlier acts, in the sequence of events, which do not necessarily have an effect on the actual crime of terrorism. In the Netherlands, for instance, the financing of a terrorist act used to be prosecuted as “preparation of an offence” under Article 46 of the Dutch Penal Code.27 The Dutch Supreme Court in a ruling defined “preparation” as “an incomplete form of a criminal offence.” Widening the scope of the law on attempt, the court also ruled that “punishable preparation is further away from the completed offence than attempt . . . but involves acts in which perpetrator . . . intentionally fabricate[s] or ha[s] at his disposal means that are . . . intended for the commission of the criminal offence he