The Issue With Combatting Terrorism’s Revenue

By Sonia Feng for the Sydney Morning Herald

The story of global financing of terrorism is one that is deeply ingrained and problematic. Pitched by the Second General Assembly of the United Nations as one of the important avenues in combatting terrorism by the international community, it in reality and praxis lies secondary in counter terrorism measures and is notoriously difficult to address.

The focus on combatting the financing of terrorism is subsidiary in the international sphere. Alternative counter terrorism processes that have largely been successful according to the Second General Assembly involve localised police and intelligence services, use of military force, the fracture and disintegration of existing terrorist organisations and the legitimisation of previous non-state actors with renewed recognised status as political agents.

According to Second General Assembly director, Jason Smith, the financing of terrorism “remains highly contentious” as the concept in its entirely hinges on a concept “not properly defined”. Such issues of uncertainty over the definition of terrorism prolong the stratagem to address it in its fullest capacity. Director Smith further questioned how one is able to fund something that is not officially and internationally defined.

The United Nations treaty and the Terrorist Financing Convention criminalises acts of financing terrorist activities. According to the briefing paper released during committee today, “these terrorist organisations require larger financial reserves to perform tasks that support their terrorist activities, and to maintain a sphere of regional influence”. These funds can be sourced from both legal and illegal activities.

Typically as history and contemporary times dictates, less well-regulated and ill-supervised financial institutions, charities and NGOs support such illegal and criminal activities, both knowingly and unknowingly, that go on to fund directly and indirectly terrorist acts. According to the briefing paper today, “the US Drug Enforcement Administration estimates up to 60% of terrorist organisations are connected to the illegal narcotics trade”. Indeed drug trafficking has provided funding for insurgency actions for those who utilise terrorist violence in various regions throughout the world. Furthermore, listed amongst the criminal activities include kidnapping and people trafficking, weapon smuggling and corruption which can generate large profits for terrorist organisations to fund their network and activities.

In our growing globally connected world, money is easily transferred state to state electronically. It surpasses state borders, for currency surpasses traditional sovereignty. Notable is the much manipulated and abused hawala system in which an informal value transfer occurs based on an honour system rather than currency movement. Terrorist organisations also launder money to conceal the unlawful nature of the aforementioned criminal activities. As such, anti-money laundering is on the United Nations agenda because it is considered a crucial component of combatting the pervasive and aggrandised revenue of terrorism.

Director Smith went on to state that as widespread terrorism funding is, it is also notable that it is inexpensive to fund. According to the briefing paper, it is estimated that the 9/11 terrorist attacks took less than $500,000 to fund. The expediency and economically viable nature of terrorism is another issue that extend its existence within the international landscape of insurrectional behaviours.

With financing terrorism, there lie many contributors. The problematic axis of transparency and the greater question of accountability is one that needs to be further explored. In committee today, moderated caucus on the topic of state sponsored terrorism brought out vitriol and denial. At its crux, state sponsored terrorism remains a touchy subject for many nation states (re: the bitch fight or “bilateral bickering” between the delegates of Pakistan and India). To which institution, (non-) actor or agency understood to be held account is one that needs additional discussion.

In conclusion, global financing of terrorism is one that is deeply ingrained and problematic that needs further investigation, discussion and accountability.

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