April 19, 2024

Report: Funding Terrorism: Identifying The Financial Sources of Terrorists in The MENA Region

 

Prepared by: Yosr Khedr 

 

 

Reaching the beginning of 2021, terrorist attacks and crimes are starting to become increasingly complex, interconnected, and global. More than ever, there is a need for comprehensive cooperation in order to deter the threat and de-root the causes. 

Understanding the implicit ways that leads to the surface is the starting point of this paper, such as terrorism financing, the methods, the facades, and most importantly, the parties involved. 

Terrorists require a large sum of funds in order to recruit and support members, maintain logistics hubs, and conduct their operations, among many other illicit trades and methods of transferring funds. 

It is rather impossible to eradicate all the sources of money flow to the terrorist organizations, it is however self-defeating to not try, and this can only  be done through constricting the environment in which terrorist operations take place and the atmosphere in which it operates. 

We can try to minimize the space in which terrorists try to engage in terrorist activities, such as recruitment, brainwashing members, and others. 

 

Where do terrorist organizations get their money?

 

Not knowing the origins of profits and spending of either NGOs, Government spending, regional, international and multinational corporations is the root of terrorist funding through black-hand economy. 

 

Terrorism financing is closely interrelated with money laundering and fraud and this is why we always find counterterrorism strategies involve an article for money laundering as the main resource of terrorism funding. The international efforts however to combat the money laundering crime since the beginning of the 1990s are built on strategies aiming at attacking criminal organizations through their financial operations,

 

 

 

 

 

Disrupting the flow of terrorist funding is critical to curtailing their activities, crimes that are used to finance Terrorism usually include drug trafficking, kidnapping for ransom, misuse of NPOs and NGOs, and the illicit trade in commodities (such as oil, charcoal, diamonds, gold and the narcotic “Captagon”). The profits generated by those organized criminal activities cause a threat not only to public safety, because of the huge economic

power accumulated by a number of criminal organizations, but also financial systems

themselves and to economic development. 

 

What complicates the process of countering terrorism is that criminal and terrorist’s organizations usually use legitimate financial institutions to transfer, move, and store assets. Recent events showed that terrorist groups also build financial empires, where the sole purpose is terrorizing human beings and undermining international financial stability. This is why depriving them from the means to act or react to international financial trends has a very strong limiting effect on the capabilities of those entities, as well as unraveling the web of their financial networks to dig deeper into their methods and communication techniques. 

 

What are the most important organizations/groups who fund terrorists?

 

International terrorist groups use charitable and service organizations to serve as a front for their implicit operations, and this technique grew out of the network of organizations 

WHO Many of the charitable and service organizations serving as fronts for international established in the 1980s to provide funding, materiel, recruits and more to the mujahideen fighting the Soviets in Afghanistan.

 

 

 

 

 

 

Omar Al-Farouq, Al-Qaeda’s operational point man in Southeast Asia, for instance, after his arrest in Indonesia in 2002 told his interrogators that the operations he was conducting in the region were funded through a branch of the Saudi-based Al-Haramain Islamic Foundation. He clearly stated that money was laundered through the foundation by donors from the Middle-East. Shortly after that in October 2002, when NATO raided the Saudi High Commission for Aid to Bosnia, they found before and after photographs of the World Trade Center, US embassies in Kenya and Tanzania, materials for forging U.S. State Department badges, and anti-Semitic and anti-American material geared toward children, right afterwards authorities discovered $41 million were missing from the commission’s operating funds

Similarly, a disclosed CIA document shows that in 1994, Washington was warning that Saudi nationals gave some $150 million to Islamic charities active in Bosnia and implicated in terrorism.

 

Furthermore, the International Islamic Relief Organizations (IIRO): One of the chief Saudi charities definitively linked to financing a variety of international terrorist groups is the International Islamic Relief Organizations (IIRO). The IIRO has funded al Qaeda directly, as well as several of its satellite groups from Kashmir to the Philippines. Bin Laden’s brother-in-law, Mohammed Jamal Khalifa, headed the organization’s office in the Philippines, and the organization’s office in northern Virginia shared office space with about 50 other financial shell organizations that are now the subject of a massive counterterrorism investigation.

 

One of the main setbacks to this day in regulating the infiltration of charities and aid groups by terrorist and criminal organizations in the unregulated giving conception. Which means that there is no effort up to date to regulate and audit the flow of funds from donors to charities. Without transparency and regulated audits charities will remain an all too attractive means for terrorists to raise, launder and transfer funds.

 

What is the role of charity organizations in terrorist financing?

 

Among the various means of raising, laundering and transferring funds employed by terrorists, the use of charities and other non-governmental organizations (NGOs) stands out for a variety of reasons.

 

Firstly, the funds donated to charities to make the world a better place are in fact abused and used to fund death and destruction. Fraud finds an easy way in the charitable organizations tax incentives and donations to make its way to international terrorist organizations and organized crime which is a distortion of the Islamic charitable obligation of zakat.

 

 

 

Secondly, the humanitarian nature of most of these charities and service organizations places their offices and employees on the ground in conflict zones of particular interest to terrorist organizations without raising undue suspicion.

 

Thirdly, NGOs and Charity organizations provide an outlet for raising significant amounts of money, and an ideal technique to launder, and transfer those funds. Questions are not often asked when a large donation takes place, nor when it is transferred. 

 

Lastly, charities not only serve as the perfect cover for terrorist operatives they employ, by sending the funds through recipient service organizations they offer simple and extremely secure means of laundering funds and shielding the ultimate end-users from scrutiny. For example, funds raised by Hamas and wire-transferred abroad may be traced to a specific Hamas-run charity in the West Bank or Gaza, but the cash disbursements delivered by courier to Hamas operatives are impossible to follow without extremely strong intelligence.

 

Investigations of the 1988 East Africa Embassy bombings revealed that charities played crucial and key roles in funding the terrorist operations and providing cover for its operatives and still the terrorist organizations involved are closely ties to those charities. And while it is a heartfelt reality that no counterterrorism technique however comprehensive is putting an end to such attacks or uproot terrorism, extensive efforts to audit those charity organizations’ funds, profits and transactions is being conducted in a large number of cooperative countries. 

 

Progress has been made to defeat this phenomenon on a number of levels starting with; (a) awareness, most of the governments, NGOs, and donors are now aware that most charities are susceptible to penetration by terrorist operatives in any stage of raising funds, money laundering, to brainwashing the personnel inside the charity institution itself. Recently, terrorists began to use the technique of posing as legitimate donors or fundraisers in order to penetrate such institutions. (b) Combating money laundering, after understanding the risks charities pose in being prone to terrorist infiltration, a number of governments started to conduct regional or interregional counter money laundering operations as terrorists are operating using standard, and sometimes high level of criminal money laundering techniques to finance their terrorist operations both locally and regionally. New domestic draft money laundering criminalizing laws are introduced in a considerable number of states and enforcing stiffer penalties when laundering money in support of terrorist activity. (c) Asset Freezing, the impact of freezing terrorists’ assets and shutting down front organizations can be significantly of importance in denying terrorists the accessibility to their front means of raising and transferring funds in order to complicate their flow of conduct. 

 

References: 

 

https://www.interpol.int/en/Crimes/Terrorism/Tracing-terrorist-finances 

 

https://openknowledge.worldbank.org/bitstream/handle/10986/5926/578790PUB0Comb101public10BOX353783B.pdf?sequence=1&isAllowed=y 

 

https://www.unodc.org/unodc/en/terrorism/news-and-events/terrorist-financing.html 

 

https://www.washingtoninstitute.org/policy-analysis/charitable-organizations-and-terrorist-financing-war-terror-status-check 

 

INTERPOL – GLOBAL COUNTERRORISM STRATEGY 2017