Exploiting Weaknesses in Terrorist Organizations - Research Paper Example

Disrupting Terror Group Finances to Exploit Weaknesses in Terrorist Organizations Introduction As the September 11, 2001 terrorist attacks were launched against the United States, a renewed focus on terrorism and terrorist activities emerged. As such, various government agencies renewed their efforts to apprehend known terrorists and to interrupt their operations. Interrupting their operations has been a generally difficult undertaking because terrorists have long been functioning through a network of members and subsidiaries. Moreover, time and again, these organizations seem to have the necessary resources to elude authorities and to support their activities. In most activities, finances or money are often needed. This is not an exception for terrorist organizations that need the financial support of supporters in order to carry out their goals. Based on known accounts, most of their finances come from donations from sympathizers and from their numerous economic enterprises. Since their members, including their donors, are mostly located in different parts of the world, their funds also have to be moved and have to change hands. Where interruptions to the smooth flow of these finances would be interrupted, the terrorist activities would also likely be interrupted. This is the basis of this discussion. It shall discuss the general flow of finances for terrorist organizations, and how disruptions in these finances would impact on the organization itself. It will also discuss whether or not such disruptions would be sufficient in exploiting the weaknesses of terrorist organizations. This paper is being carried out in order to provide readers more specific scenarios on how disruptions on finances impact on terrorist organizations. Body Background, terrorist financing Terrorists, as in most businesses or other undertakings require funds to operate. These funds are usually allocated to finance payments for operatives, travel expenses, training, forging of documents, bribes, weapons, and suicide attacks (Financial Action Task Force, 2008). Funding for these activities may primarily be allocated for direct operational support and secondly for broader operational activities (FATF, 2008). Direct operational funding usually includes: direct costs of attacks, like bombs, vehicles, maps, and the like; salaries, communications; food and subsistence; training and travel; and logistics or communication (FATF, 2008). The broader allocations include funds allocated for the support of the organization. This may include the recruitment of members, support of complicit charitable organizations and other businesses, including mass media organizations (FATF, 2008). The raising of funds for these organizations may also be through legitimate sources, including charities, businesses, donations, and their savings. Funds from criminal activities may also be used; these funds include money raised from kidnap-for-ransom, racketeering, drug trafficking, and weapons sales (FATF, 2008). Some organizations also use credit card fraud, check fraud, as well as extortion to support their activities. Rationale for disruptions There is a significant amount of logic in disrupting the finances of terrorist networks. Such disruption is an essential aspect in resolving the terrorist issue (Yager, 2006). With the vast requisites and requirements which terrorists need to finance their activities, it is logical to disrupt their activities by stopping or curtailing the flow of their funds to their numerous terrorist activities and relevant personnel (Yager, 2006). By interrupting the flow, the capacity of these organizations to function would be eventually compromised. As such, their ability to launch terrorist activities, including suicide attacks would also be curtailed. Moreover, the disruption would likely increase their general operational costs and create greater risks for their activities (FATF, 2008). In the end, if such disruption would remain unresolved, the morale of the members and the organization would also be compromised. In fact, their legitimacy and functionality as a terrorist network would likely be questioned by their members (FATF, 2008). These disruptions in terrorist financing would also prompt them to redirect their activities into those which may be too risky, or those which they would not normally opt for or utilize (FATF, 2008). The disruptions of attacks through interrupted cash flows are a generally difficult undertaking. Some attacks can seemingly also be carried out at minimal costs, supported by legitimate money, and not arousing any suspicion from authorities (Parkman and Peeling, 2007). Still, the costs which are incurred in terms of direct attacks represent only a small amount of terrorists’ financial demands. Interrupting monetary flows to these organizations reduces the resources they can use for their activities (Parkman and Peeling, 2007). As a result, terrorists may become frustrated in their failure to carry out attacks or promote their activities. In general, terrorists need money to establish a supportive and active environment where their activities can be staged, planned, and sustained (Parkman and Peeling, 2007). Interrupting the flow of their funds makes their general environment less than accommodating; in fact, it would now be a hostile environment for them. Even with these interruptions and disruptions in fund flows, specific terrorist attacks may however still be carried out by these terrorists (Pieth, Thelesklaf, and Ivory, 2009). However, with interruptions in their terrorist activities, the reach and capabilities of these groups would likely be limited; and with time, these activities would gradually decline in both impact and extensiveness (Pieth, et.al., 2009). Investigators or terrorist activities have often identified specific individuals with known terrorist ties, especially when large financial transactions are detected (Anderson, 2010). In one case, a national from one country was said to be carrying about 340,000 US dollars in cash (FATF, 2008). As his link to a terrorist group in the country he was entering was later identified, he was denied entry and his funds seized by authorities based on the legal provisions of the country he was entering. Further investigation later revealed that he was meaning to give the cash to another terrorist with the funds to be used for the assassination of a particular target (FATF, 2008). The capture of the funds thwarted the terrorists’ plot and prevented them from further perpetuating their goals. Preventing the transfer of funds Discovering terrorist involvement in legitimate financial activities often calls for the implementation of specific government standards, mostly as a means of knowing the organization and securing due diligence in the application of policies and legal procedures (Anderson, 2010). This is a significant part of the reporting process which relates to questionable transactions, in some instances indicating criminal activities relating to terrorism. To support financial organizations in countering terrorist finances, various remedies must be applied (Anderson, 2010). These remedies would likely involve specific financial sanctions imposed on specific target sectors including charitable institutions, money-service businesses, and ensuring effective reporting measures on possible suspicious activities. The imposition of specific financial sanctions legally requires states to establish and secure targeted financial sanctions which identify, freeze assets, and prevent availability of funds to identified terrorists and associates (FATF, 2008). These elements are needed in order to deprive terrorists and their associates with the tools and resources they would need in order to support their activities and operations. This is a preventive remedy which would call for states to identify the necessary elements which support their terrorist networks in relation to the specific standards of reasonable and legal transactions (Anderson, 2010). It is also important to secure and protect the vulnerable sectors of society. One of these vulnerable sectors includes the formal financial sectors. States have to secure their financial sectors from activities like money laundering, especially those which are used for terrorist funds (US General Accounting Office, 2005). The FATF Special Recommendation VII has been established in order to curtail terrorists from easily accessing their funds and wire transfers. This recommendation also seeks to detect the movement and misuse of these funds. Moreover, specific indications on the transfer of funds seek to establish information on the sender of wire transfers in order to provide investigators with the tools to investigate and possibly prosecute terrorists and criminals (FATF, 2008). Charitable sectors must also be secured against terrorist financial transactions. The FATF Special Recommendation VIII indicates the foundations which ensure that charitable institutions are not being used by terrorists for the following activities: to secure a legitimate front for their illegal activities; to use these institutions as vessels for their financing as well as a means to circumvent the freezing of terrorist funds; or to use these institutions to hide funds which are later diverted from legitimate causes to terrorist activities (Kohlman, 2006). As a means of disrupting the activities of terrorist organizations, in order to identify and prevent the misallocation of charity funds for terrorist activities, it is important for authorities to supervise these organizations, to gather data and investigate reports on the abuse of charities, and secure international support in protecting charities in the global arena (Kohlman, 2006). Cash couriers are also often used in the transfer of terrorist funds. It is therefore important to have the means to disrupt the flow of terrorist funds through these couriers (Cronin, 2004). Recommendations have been established on guaranteeing that terrorists cannot avoid the control measures applied in the financial market via cash couriers and the use of negotiable instruments (Cronin, 2004). This recommendation would also prevent the transfer of funds which may be earmarked for terrorism or other criminal activities, or those which are not accurately disclosed. Under these conditions, it may be possible to impose sanctions for false declarations; moreover, authorities may also confiscate currencies which are proven to be earmarked for terrorist financing or money laundering (Cronin, 2004). Disruptions in terrorist financing have also included reporting on suspicious transactions. Suspicious transactions reporting has become a means by which terrorist financing can be identified (FATF, 2008). Significant efforts are being carried out in order to allow counter-terrorist authorities to secure indicators which would suggest suspicious transactions of terrorists, (FATF, 2008). Due to the diversity of terrorist financial activities, evaluating and detecting these suspicious transactions have proven to be challenging. Even with these challenges, counter-terror agencies have been able to identify the specific qualities of transactions which should trigger investigations on such transactions (Anderson, 2010). Although it would not likely be obvious for investigators, the reporting on the moving and transfer of large amounts of cash through electronic transfers and cross-border transactions are the best signs for law enforcement authorities to detect possible terrorist presence and movement (Anderson, 2010). It is also best for national authorities to support the financial investigators on their efforts to detect terrorist financing by sharing their own intelligence investigations (US GAO, 2005). Financial data alone would not likely be enough to identity the presence of these terrorist activities. However, in combination with counter-terrorist intelligence drawn from the monitoring of terrorist activities and networks, financial information can be used as a tool for detecting and disrupting terrorist activities (US GAO, 2005). On a wider scale, the effective sharing of information between the public and private organizations can be used to establish a risk-based resource in detecting money laundering and terrorist financing. In one case, a financial intelligence unit (FIU) in the UK was asked to carry out a financial investigation on suspected terror groups in the UK and the Middle East (FATF, 2008). These investigators were very much involved in carrying out suspicious transactions reporting during their investigations. In the course of their investigation, the FIU evaluated the methods which were utilized by the suspects and they were able to evaluate and relay their data to those investigating the suspicious financial transactions (FATF, 2008). This investigation included various meetings and sharing of information with relevant financial institutions. It was later established that some of the methods used by these terrorists included identity theft and credit card fraud (FATF, 2008). With the collaboration of the FIU and the other agencies, including the suspicious transaction reporting submitted to the agency, the activities of the terrorist group were disrupted, their financing interrupted, and their goals frustrated. Current financial indicators require for financial institutions to stay vigilant in detecting the warning signs of suspicious financial transactions and to report these activities to any financial intelligence unit (Anderson, 2010). The FIU then evaluates the financial data taken from these institutions with law enforcement authorities and combines them with the input from intelligence units. With these collaborated efforts, it is possible for FIUs to identify financial activities even when it would be difficult for financial institutions to understand and detect suspicious terrorist financial activities (Anderson, 2010). In another FIU investigation, an individual’s account was linked to a terrorist organization. Initially, the individual’s account was credited with significant cash deposits and on investigation, he indicated that these were his wages from an overseas employer in the Middle East (FATF, 2008). This was considered a suspicious transaction, especially as he made a large cash deposit for the rental of a building. A report for a suspicious transaction was therefore submitted to the FIU. The individual also owned a company which was linked to another company in North Africa; moreover, more suspicious transactions were traced from the North African company to financial transactions in the Middle East (FATF, 2008). It was later revealed that the manager of the North African company was a terrorist and the company was being used to move funds for his terrorist group. The FIU investigation disrupted the terrorist financing and revealed a major weakness in their network. Yet another suspicious transaction was discovered from a foreigner residing in Belgium when he received significant cash deposits after being officially installed in the country (FATF, 2008). He had no logical explanation for his cash flows and this aroused the suspicion of authorities and investigators. A suspicious transaction report was submitted and after further investigation, his finances were linked with a terrorist organization in Asia. It was also revealed that the money he received was for the purchase of weapons for the terrorist organization (FATF, 2008). The overall goal of FIUs is to identify the presence of terrorist financial activities based on financial information and terrorist intelligence reports from law enforcement intelligence agencies (Prober, 2005). Moreover, FIUs have had a significant role in revealing the results of their investigations with other intelligence agencies. Reports not related to suspicious activities have been beneficial in establishing links when combined with the reports from other intelligence units (FATF, 2008). The FIU has been able to carry out analysis on transactions in relation to additional accounts and provide law enforcement authorities a greater network upon which they can carry out their investigations (FATF, 2008). In general, through these investigations, the financial activities of terrorists have been disrupted, and their weaknesses as an organization exposed. Conclusion As in most human activities, money is a major prerequisite. Terrorists are hardly exempt from this need because of their various activities and logistical requisites. As with all human activities, when cash flow is interrupted, the activity is disrupted as well. This is also true for most terrorist organizations. Where their cash flows are interrupted, their terrorist activities would also be disrupted. Government authorities, especially those concerned with counter-terrorist activities have experienced significant success in disrupting the activities of these organizations by interrupting the cash flows for these organizations. Reports of suspicious transactions have been considered, including the entry of significant amounts of cash to individuals or groups which have no viable or justified sources for such cash entry. By attaching triggers for these transactions, it has been possible for authorities to raise the alarm for these organizations. Where cash flow is interrupted, the goals of these organizations cannot be carried out. References Anderson, W. (2010). Disrupting threat finances: utilization of financial information to disrupt terrorist organizations in the twenty-first century. New York: DIANE Publishing. Cronin, K. (2004). Foreign terrorist organisations: CRS report for congress. Congressional Research Service. Retrieved from www.fas.org/irp/crs/RL32223.pdf. Financial Action Task Force. (2008). Terrorist financing. Retrieved from http://www.fatf-gafi.org/media/fatf/documents/reports/FATF%20Terrorist%20Financing%20Typologies%20Report.pdf Kohlmann, E. (2006). The role of islamic charities in international terrorist recruitment and financing. Copenhagen: Danish Institute for International Studies, Copenhagen. Parkman, T. and Peeling, G. (2007). Countering terrorist finance: a training handbook of financial services. London: Gower Publishing, Ltd. Pieth, M., Thelesklaf, D. and Ivory, R. (2009). Countering terrorist financing: the practitioners point of view. New York: Peter Lang. Prober, J. (2005). Accounting for terror: debunking the paradigm of inexpensive terrorism. Washington: Washington Institute for Near East Policy. US General Accounting Office. (2005). Terrorist financing: on deterring terror. New York: Cosimo, Inc. Yager, L. (2006). Terrorist financing: better strategic planning needed to coordinate u. S. Efforts to deliver counter-terrorism financing training and technical assistance abroad. New York: DIANE Publishing. Conclusion Read More