Lecture 10 - Financing Terrorism Flashcards
Who uses international terror lists?
Financial companies to assess risks.
EU list tracks persons/groups/entities involved in terror attacks
UN list contains groups such as Al Qaeda, Taliban, Daesh (IS)
The US has the Office of Foreign Asset Control, and publishes the Designated Nationals Lists to prevent entities form the US financial system.
What terms can be used for International Terror Lists?
The older term is SDGT (specially designated global terrorists), but are now called SDN (specially designated nationals)
What types of terrorist funds are required for terrorist organisations to operate?
Direct operational, including the cost of attacks, salaries, subsistence, communications, training, travel, logistics
Broad operational, including maintaining front companies such as charities, running mass media outlets (websites, news channels, forums)
What costs are involved for terrorist organisations?
Direct costs - vehicles, bomb equipment, maps, surveillance, weapons
Indirect costs - expenses, training, travel, false documentation, salaries, employment/welfare
Give an example of terrorist mass media organisations being used
Al-Qaeda has AS-SAHAB media arm, a well organised group of websites hosted around the world
A case study includes 3 British residents using funds from stolen credit cards that had been laundered through online gambling to run websites promoting martyrdom through violence
Why do terrorist organisations use charities as front companies?
They immediately have public trust due to their charitable status
Have access to lots of funding
Cash intensive so harder to trace
Can be global
Lightly regulated
Can have poor record keeping standards
Charities can be underestimated by financial institutions
Example: Islamic American Relief Agency diverted funds via terrorist organisations
How do terrorist organisations raise funds?
Can have direct/state support
Charities
Legitimate cash businesses
Criminal enterprises e.g. drugs, people trafficking, extortion, smuggling, weapons trade, kidnapping
Social welfare fraud
Tithes (portion of salary from employed persons)
Example: drug dealers in Turkey were taxed by terrorist organisation operating a “customs” point to import drugs
How do terrorist organisations move funds?
They will try to evade reporting techniques, preferring cash exchanges.
International trade systems, such as alternative remittance or Hawala
Offshore havens or failed states
Charities
Non-traditional financial institutions
What non-traditional financial institutions can terrorists utilise for funds?
Currency exchanges
Cheque cashing services
Money Transfer Agents
Travellers cheques
Casinos/gambling clubs
Hawala
How does Hawala work?
In country A, person A wants to send $50k to person B in country B.
Person A gives money to a Hawaladar in country A, who gives person A a code.
Hawaladars in country A and country B settle accounts. This can be done by way of sending goods between them instead of cash
Person A gives person B the code
Person B goes to the Hawaladar in country B, who hands over the cash
How were the 2002 Bali Bombings funded?
The funds came from Al-Qaeda but sent as cash via cash couriers in Thailand. A Thai resident organsied two batchs of couriers to get $30k to Bali terrorists
