Suppression Of Terrorist Financing. Hamed Tofangsaz
groups have to have achieved a high level of capability to attract state sponsor attention.71
In the case of “shell states,”72 terrorists take control of a geographical area and exploit it for sanctuary and their needs.73 An area can be as small as a few neighborhoods or as large as a huge area in a country. The Islamic State in Iraq and the Levant were other examples, which met their financial needs largely through “proceeds from occupation of territory, such as bank looting, extortion, control of oil fields and refineries, and robbery of economic assets and illicit taxation of goods and cash that transit” and so on.74
In the franchise category, terrorist groups receive a large percentage of their support from one source, but their resources are diversified enough to remain independent.75 In this case, if sponsors stop supporting them, although terrorist groups may weaken, they do not face extinction. For example, it is claimed that Hamas and Hezbollah are franchisees of Iran, from whom they receive much of their support,76 but they also maintain their own network of charities, front companies, and criminal networks to sustain their activities.77
In the “bundled support” category, terrorists do not rely on one or few sponsors; instead, they receive a number of tangible and intangible resources from numerous non-state contributors.78 The phenomenon of diaspora support, in which terrorists receive support from dispersed donors of the same ethnicity or nationality, is the prominent example of this category. Many small contributions from different contributors give terrorist groups more autonomy than a state-sponsored terrorist group. However, they receive support only so long as their actions satisfy their supporters.79
In the transnational corporation model, extensively used to describe Al-Qaeda, terrorist groups act on a global scale without any specific national identification. These groups, utilizing globalization,80 are highly sophisticated and complex in resourcing, membership, and geographical operations.81 Groups within this model are experts at using formal and informal financial systems, front companies, charities, money laundering, and other criminal activities. They also have a high level of autonomy as they have access to various financial resources.
Lone wolf terrorism is carried out by terrorism groups (or individuals) which are not essentially involved in collective, organized activities.82 Lone wolf terrorist groups are individuals or small groups which are identifiable by a particular ideology or grievance, and which carry out actions in support of their radical beliefs.83 Unlike other types, lone wolf terrorist groups are small in size with few financial requirements and limited capabilities. They are self-contained, free to choose their targets and tactics. Terrorism in this form is very cheap, but the impact can be significant. It is claimed that there is a considerable trend indicating the increasing frequency of lone wolf attacks by individuals with little or no connections to formal organizations.84 Terrorist attacks in Germany in March 2011,85 in France in March 2012 and April 2017,86 in Norway in July 2012,87 and England in May 2017 are recent examples of lone wolf terrorism.
Conclusion
This chapter has explored the nature and characteristics of terrorist financing. Terrorist financing can most narrowly be interpreted to mean financing planned, attempted, or completed terrorist acts. In a broader sense, the terms financing terrorism, or financing terrorists, or terrorist groups can be used to include any activities carried out to finance the activities of these individuals or groups. Action to finance these activities can include raising, moving, and restoring funds allocated to carry out these activities.
Techniques and methods to raise, move, and restore funds are also not necessarily carried out through illegal activities. In other words, terrorists and their activities can be funded by any means, legal or illegal, and by anyone, terrorists or non-perpetrators. Due to these particular nature and characteristics, it seems that the terroristic criminality of these financing activities can be only derived from their connection with terrorism or terrorist acts. Obviously, these features of terrorist financing should be taken into account in the adoption and implementation of any counterterrorist financing measures. In the rest of the book, I seek to examine how the international community has responded to terrorist financing and whether its response is proportionate to the distinctive nature of the terrorist financing phenomenon.
NOTES
1. Earlier versions of some sections of this chapter and chapter 3 were published in the Journal of Money Laundering Control. See Hamed Tofangsaz, “Rethinking Terrorist Financing; Where Does All This Lead?” 2015 18(1) Journal of Money Laundering Control 112.
2. Financial Action Task Force, “Terrorist Financing” (February 29, 2008) <http://www.fatf-gafi.org/media/fatf/documents/reports/FATF%20Terrorist%20Financing%20Typologies%20Report.pdf>, p. 7.
3. Ibid.
4. Ibid.
5. See Jodi Vittori, Terrorist Financing and Resourcing (Palgrave Macmillan, New York, 2011), p. 13.
6. Ibid.
7. Daniel Byman, Trends in Outside Support for Insurgent Movements (RAND, Santa Monica, 2001), p. 87.
8. Vittori, above n 5, p. 15.
9. See Bruce Hoffman, Inside Terrorism (Columbia University Press, New York, 2006).
10. Vittori, above n 5, p. 17.
11. Ibid., p. 18.
12. Kim Cragin and Sara A. Daly, The Dynamic Terrorist Threat: An Assessment of Group Motivations and Capabilities in a Changing World (RAND, Santa Monica, 2004), p. 45.
13. Ibid., p. 47.
14. Ibid., p. 50.
15. Vittori, above n 5, pp. 20–21.
16. Cragin and Daly, above n 12, p. 40.
17. Vittori, above n 5, p. 29. Also see Nikos Passas, “Terrorism Financing Mechanisms and Dilemmas” in Jeanne K. Giraldo and Harold A. Trinkunas (eds) Terrorism Financing and State Responses: A Comparative Perspective (Stanford University Press, Stanford, CA, 2007), p. 32.
18. Financial Action Task Force, above n 2, p. 15.
19. Ibid.
20. Vittori, above n 5, p. 36.
21. Ilias Bantekas, “International Law of Terrorist Financing” 2003 97(2) American Journal of International Law 315, p. 317.
22. LaVerle Bennette Berry, A Global Overview of Narcotics-Funded Terrorist and Other Extremist Groups: A Report (Federal Research Division, Library of Congress, Washington, 2002), p. 52. Also see Ahmed Rashid, Jihad: The Rise of Militant Islam in Central Asia (Yale University Press, New Haven, 2002), p. 165.
23. Financial Action Task Force, FATF Report: Financial Flows Linked to the Production and Trafficking of Afghan Opiates (Paris, 2014), p. 42.
24. Vittori, above n 5, p. 36.
25. See United Nations Office on Drugs and Crimes, Afghanistan Opium Survey 2016; Cultivation and Production (October 2016).
26. Jonathan P. Caulkins, Jonathan D. Kulick, and Mark A. R. Kleiman, “Think Again: The Afghan Drug Trade” 2011 Foreign Policy.
27. Vittori, above n 5, p. 38.
28. Peter L. Bergen, The Osama bin Laden I Know: An Oral History of al-Qaeda’s Leader (Free Press, New York, 2006), p. 10. Also see Steve Kiser, Financing Terror: An Analysis and Simulation for Affecting Al Qaeda’s Financial Infrastructure (PhD thesis submitted to Pardee Rand Graduate School, Santa Monica, 2005), p. 35.
29. See Monte Palmer and Princess Palmer, At the Heart of Terror: Islam, Jihadists, and America’s War on Terrorism (Rowman & Littlefield, Lanham, MD, 2004), p. 184. Or see Jimmy Gurulé, Unfunding Terror: The Legal Response to the Financing of Global Terrorism (Edward Elgar, Cheltenham, 2008), p. 121.
30. See Byman, above n 7, p. 57.
31. Financial Action Task Force, above n 2, p. 11.
32.