Suppression Of Terrorist Financing. Hamed Tofangsaz
In such a process, there is no need for legitimization especially when the funds have a legal origin. Even if terrorist funds have an illegal background, money laundering cannot play a leading role because the purpose in terrorist financing is not the accumulation of funds in financial systems.
Similar to money laundering in which the attempt is to conceal the origin of proceeds from detection, the effort in financing terrorism is to hide the funds and their origin devoted to pursuing terrorist activities from scrutiny. This similarity has been used to draw an analogy between money laundering and terrorist financing, reasoning that terrorists and their supporters resort to similar tools and techniques to those used by launderers in organized crime to move terrorist funds.56 Nonetheless, where terrorist financing takes place, there often is no criminal offense that precedes the endeavor to hide the movement of funds from detection.57 Although there is criminal intent, it is unreasonable to consider the funds “as the proceeds of that criminal intent.”58
To sum up, the FATF claims that because “there is a close connection between terrorism, inter alia, and money laundering,” terrorist financing should be criminalized as a predicate money laundering.59 The analysis of this chapter, however, indicates that the crime-terrorism nexus assumption is not accurate as there are fundamental differences between terrorism and organized crimes, and between terrorist financing and money laundering. This raises serious doubt as to the effectiveness of the expansion of anti-money laundering measures to counter terrorist financing (although as noted the examination of such an expansion is beyond the scope of this research).
But relying on the crime-terrorism nexus assumption seems to have paved the way for the diffusion of the Terrorist Financing Convention’s approach that has an emphasis on treating terrorist financing independently of terrorism. In other words, while this approach to countering terrorist financing, preparatory in its nature, is not tenable in terms of existing notions of criminalization, the emphasis on the assumption that terrorist financing is closely and heavily involved in criminal activities has provided a more convincing, but inaccurate, argument in support of criminalizing terrorist financing as an independent offense even when there is no link between terrorist financing and an actual terrorist act for which financing is carried out. In the following chapters, the implication of this approach to the criminalization of terrorist financing will be examined.
NOTES
1. Financial Action Task Force, “International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation” (February 2012), p. 37.
2. Ibid., p. 13.
3. UN International Convention for the Suppression of the Financing of Terrorism (New York, December 9, 1999) (hereinafter the Terrorist Financing Convention), art. 2(1).
4. UN Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (Vienna, December 20, 1988), art. 3(b) and (c). “Predicate crimes” refer to any crime as a result of which proceeds have been generated; see UN Convention against Transnational Organized Crime (Palermo, November 15, 2000), art. 2(h) (hereinafter the Palermo Convention).
5. Guy Stessens, Money Laundering: A New International Law Enforcement Model (Cambridge University Press, Cambridge, 2000), p. 82. According to Article 2(e) of the Palermo Convention, “proceeds” mean “any property derived from or obtained, directly or indirectly, through the commission of an offence.”
6. William C. Gilmore, Dirty Money: The Evolution of Money Laundering Counter-Measures (2nd ed., Council of Europe Press, Strasbourg, 1999), p. 9. “Organized criminal group” has been defined by the Palermo Convention as “a structured group of three or more persons, existing for a period of time and acting in concert with the aim of committing one or more serious crimes or offences established in accordance with this Convention, in order to obtain, directly or indirectly, a financial or other material benefit.”
7. Stessens, above n 5, p. 83.
8. Gilmore, above n 6, pp. 30–40.
9. Ibid., p. 29.
10. Ibid.
11. Jae-Myong Koh, Suppressing Terrorist Financing and Money Laundering (Springer, Berlin, 2006), p. 26.
12. Stessens, above n 5, p. 84.
13. The term “funds” refers to “assets of every kind, whether tangible or intangible, movable or immovable, however acquired, and legal documents or instruments in any form, including electronic or digital, evidencing title to, or interest in, such assets, including, but not limited to, bank credits, travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts, letters of credit.” See the Terrorist Financing Convention, art. 2(1).
14. Jodi Vittori, Terrorist Financing and Resourcing (Palgrave Macmillan, New York, 2011), p. 26.
15. The Terrorist Financing Convention, art. 1.
16. Ilias Bantekas, “International Law of Terrorist Financing” 2003 97(2) American Journal of International Law 315, p. 321.
17. Loretta Napoleoni, Modern Jihad: Tracing the Dollars behind the Terror Networks (Pluto, London, 2003), p. 40. See also Leslie Holmes, Terrorism, Organised Crime and Corruption: Networks and Linkages (Edward Elgar, Cheltenham, 2007), p. 25.
18. Financial Action Task Force, FATF Guidance: Crimialising Terrorist Financing (Recommendation 5) (October 2016), p. 28.
19. R. T. Naylor, Wages of Crime: Black Markets, Illegal Finance, and the Underworld Economy (Cornell University Press, Ithaca, 2002), p. 10.
20. Armand Kersten, “Financing of Terrorism—A Predicate Offence to Money Laundering?” in Mark Pieth (ed) Financing Terrorism (Kluwer, Dordrecht, 2002), p. 301.
21. Charles Goredema, “Money Laundering in East and Southern Africa: An Overview of the Threat” (Institute for Security Studies, South Africa, 2003), <https://issafrica.org/research/papers/money-laundering-in-east-and-southern-africa-an-overview-of-the-threat>, p. 78.
22. Terrorist may be motivated by various factors such as secession, insurgency, and regional retribution and so on. See Alex Conte, Human Rights in the Prevention and Punishment of Terrorism (Springer, Dordrecht, 2010), p. 10.
23. Yvon Dandurand and Vivienne Chin, Links between Terrorism and Other Forms of Crime (A Report Submitted to Foreign Affairs Canada and the United Nations Office on Drugs and Crime, Vancouver, 2004), p. 5.
24. Bantekas, above 16, p. 318.
25. Conte, above n 22, p. 11.
26. Ibid.
27. Dandurand and Chin, above n 23, p. 18.
28. United States Senate Committee on the Judiciary, Narco-Terrorism: International Drug Trafficking and Terrorism, a Dangerous Mix: Hearing before the Committee on the Judiciary, United States Senate, One Hundred Eighth Congress, First Session, May 20, 2003 (U.S. G.P.O., Washington, DC, 2003).
29. Dandurand and Chin, above n 23, p. 12.
30. Tom Obokata, Transnational Organised Crime in International Law (Hart, Oxford, 2010), p. 14.
31. Bantekas, above n 16, p. 318.
32. UNGA, Replies Given on 22 March 1999 by the Observer of the International Committee of the Red Cross to the Questions Asked by the Delegations of Belgium and Mexico Regarding the Implications of Article 2, Paragraph 1 (B) (A/AC.252/1999/INF/2, March 26, 1999).
33. Financial Action Task Force, Follow-Up Report to the Mutual Evaluation Report of Greece (Paris, October 28, 2011).
34. Koh, above n 11, p. 21. See also Chris Dishman, “Terrorism, Crime and Transformation” 2001 24(1) Studies in Conflict & Terrorism 43, p. 43.
35. Dandurand and Chin, above n 23, p. 5.
36. United Nations Office on Drugs and Crime, Result of a Pilot Survey of Forty Selected Organized Criminal Groups in Sixteen Countries (September 2002).
37. In September 2003, pursuant to the UN General Assembly Resolution 58/136, the Terrorism Prevention Branch