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9 October 2017

The law’s response to the link between terrorist financing and criminal activity

Categories: Blog, Business crime & fraud, Financial Crime,

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Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

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Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

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Categories: Blog, Business crime & fraud, Financial Crime,

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Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

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Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

By Sangeeta Bedi

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

Categories: Blog, Business crime & fraud, Financial Crime,

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Categories: Blog, Business crime & fraud, Financial Crime,

The presence of former criminals in terrorist groups is not new, but since the rise of ISIS and the increasing number of European jihadists, the link between ex-offenders and terrorism has become better recognised. There is now a well-established link between those who have a criminal past and a terrorist future.

The ICSR (International Centre for the Study of Radicalisation and Political Violence) has recently published a report titled “Criminal Pasts, Terrorist Futures: European Jihadists and the New Crime-Terror Nexus”. The ISCR has found that there is not a merging of criminals and terrorists as an organisation, but the merging of their social networks and environments. Criminal and terrorist groups now recruit from the same pool of people which creates synergies and overlapping networks.[1]

The law regarding terrorist financing is not solely reserved for Islamic terrorism, which is the subject of the report. Currently one of the main focuses of anti-terrorism financing is on preventing terrorist financing through the international financial system. The Terrorist Asset-Freezing Act 2010 gives effect to Resolutions of the Security Council of the United Nations. Section 2(1) of the act provides “The Treasury may make a final designation of a person for the purposes of this Part if – (a) they reasonably believe – (i) that the person is or has been involved in terrorist activity…” A final designation lasts for a period of one year, but can be renewed. This means a person’s assets can be frozen for a year if there is a reasonable belief that someone has been involved in terrorism. A ‘reasonable belief’ can be construed very broadly. A recommendation of the ISCR report is that enforcement looks beyond the conventional financial system.

Financing

This convergence between crime and terrorism is having a profound effect on the financing of terrorist attacks. 40% of terrorist plots between 1994 and 2013 drew significant funding from proceeds of crime. The vast majority of terrorist attacks in Europe do not require large sums of money, nor do they rely on direction from Islamic State. “Islamic State and other jihadist groups are trying to keep financial barriers to entry low, making it possible for all their supporters – no matter how rich or poor – to participate”.[2]

This area is only just starting to be studied. Before now there has been the presumption that criminals operate to pursue profit, whilst terrorists pursue ideological objectives.[3] However, studies show the extent to which al-Q’aida affiliates are invested in criminal markets.

Jihadists do not merely condone the ordinary use of criminality to raise funds, they have argued that to do so is the ideologically correct way of waging ‘jihad’ in the ‘lands of war’. It is this combined with the large and ever increasing number of former criminals in the jihadi ranks that will make financing attacks through criminal activity not just possible, but the first choice option.

Up to 40% of terrorist plots in Europe are at least part-financed through petty crime such as drug dealing, theft, robberies, sale of counterfeit goods, loan fraud and burglaries. The funding of terrorist attacks in the West has been largely separate and autonomous from the centralised budgets of groups such as al-Q’aida and Islamic State. Jihadists groups are encouraging their Western supporters to self-finance their attacks whilst promoting attacks which are cheap and easy to execute.

Changes to the law

The focus on anti-terrorism finance by way of legislation directed at the conventional financial system is clearly insufficient. These low cost attacks, combined with the merging of jihadist and criminal networks, means that the current law should evolve to tackle this ever evolving and growing threat.

The ICSR recommends targeting all streams of financing. Efforts at countering terrorist finance needs to be broadened beyond the banking system to all sources of funding, including small scale and petty crime, such as drug dealing, theft, robberies, and the trade in counterfeit goods. Not only will doing so help to counter terrorist financing, but also to reduce ordinary crimes and to enable law enforcement agencies to operate a so-called ‘Al Capone approach’. The Al-Capone approach is to bring lesser charges against individuals in cases in which terrorism related offences are difficult to prove. This approach has been suggested by the Mayor of Molenbeek, the district in Brussels where several of the terrorists involved in the Paris and Brussels attacks had lived. She said “radicalisation thrives on other forms of criminality” and “one way to tackle terrorism is to first target lower offences”.[4]

This is one way of attempting to address the problem that is terrorist financing, but the ‘Al-Capone approach’ may not be effective. It is a dangerous precedent to lock up people under the pretext of one crime when their criminal conduct is better reflected in another, but it may also be an ineffective method of tackling the problem. There is a proven and definitive link between prison and radicalisation. Sending people to prison for minor crimes in order to tackle a means of terrorist financing will put potentially radicalised criminals in prison along with other impressionable people. The risk of further radicalisation of others must outweigh the potential benefits of imprisoning people for more minor offences to try and curb terrorist financing. The challenge for law enforcement is to adapt to reflect the changing nature of terrorism and also to deter former disillusioned criminals from becoming involved with jihadist ideology.

[1] ICSR Report, “Criminal Pasts, Terrorist Futures: European Jihadists and the New Crime-Terror Nexus” page 3

[2] ICSR Report, “Criminal Pasts, Terrorist Futures: European Jihadists and the New Crime-Terror Nexus” page 4

[3] Santiago Ballina, ‘The Crime Terror Continuum Revisited’, Journal for Policing, Intelligence and the Power of Informal Networks’, Volume 6, Number 2, 2011, pp. 121-124

[4] Quoted in Nikolaj Nielsen, ‘Molenbeek mayor opens new front on extremism’, EU Observer, 9 September 2016.

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