Terrorist Finance (merged thread)

[Jedburgh]

CRS, 24 May 07: Terrorist Precursor Crimes (http://www.fas.org/sgp/crs/terror/RL34014.pdf)

Terrorist groups, regardless of ideological ilk, geographical location, or organizational structure, have certain basic needs in common: funding, security, operatives/support, propaganda, and means and/or appearance of force. In order to meet these needs, terrorists engage in a series of activities, some of which are legal, many of which are not. Terrorist precursor crimes, offenses committed to facilitate a particular attack or promote a terrorist campaign’s objectives, are thought to be often carried out far away from the primary theater of conflict associated with a terrorist group. Much of the precursor activity, especially with regard to crimes conducted for the purpose of fundraising, takes place in wealthy Western countries, including the United States. Precursor crimes, known and/or alleged, include various fraud schemes, petty crime, identity and immigration crimes, the counterfeit of goods, narcotics trade, and illegal weapons procurement, amongst others. The implications of domestically occurring terrorist precursor crimes on the current threat environment, and specifically the United State’s security posture, are not fully understood....
Along the same lines, here are a couple of good papers (2 years old) from NIJ:

Methods and Motives: Exploring Links Between Transnational Organized Crime & International Terrorism (http://www.ncjrs.gov/pdffiles1/nij/grants/211207.pdf)

The nexus with transnational organized crime is increasingly a focus for security planners in their analyses of terror groups. Their approach is best described by the phrase “methods, not motives.” While the motives of terrorists and organized criminals remain divergent most often, our research indicates this is not always the case. For that reason, this report argues that such a general approach has become too restrictive and can be misleading since the interaction between terrorism and organized crime is growing deeper and more complex all the time. In short, the lines of separation are no longer unequivocal.

The report analyzes the relationship between international organized crime and terrorism in a systematic way in order to highlight the shortcomings of the “methods, not motives” argument. In so doing, the report considers the factors that most closely correspond to crime-terror interaction and identifies those regions of developed and developing states most likely to foster such interactions. Likewise, the paper will suggest an evolutionary spectrum of crime-terror interactions that serves as a common basis for discussion of such often-used terms as “nexus.”

The centerpiece of the report is a groundbreaking methodology for analysts and investigators to overcome this growing complexity, identify crime-terror interactions more quickly and to assess their importance with confidence. The approach is derived from a standard intelligence analytical framework, and has already proven its utility in law enforcement investigations.

The report is the product of a recently concluded and peer-reviewed 18-month NIJ-sponsored research project, and includes empirical evidence drawn from numerous case studies developed in the course of the research program.
Crimes Committed by Terrorist Groups: Theory, Research, and Prevention (http://www.ncjrs.gov/pdffiles1/nij/grants/211203.pdf)

A decline in state-sponsored terrorism has caused many terrorist organizations to resort to criminal activity as an alternative means of support. This study examines terrorists’ involvement in a variety of crimes ranging from motor vehicle violations, immigration fraud, and manufacturing illegal firearms to counterfeiting, armed bank robbery, and smuggling weapons of mass destruction. Special attention is given to transnational organized crime. Crimes are analyzed through the routine activity perspective and social learning theory. These theories draw our attention to the opportunities to commit crime and the criminal skills necessary to turn opportunity into criminality. Through these lenses, the research appraises the "successes” and “failures” of terrorists’ engagement in crime.

[SteveMetz]

I have a bit on the crime/insurgency nexus in my new study Rethinking Insurgency (http://www.strategicstudiesinstitute.army.mil/pubs/display.cfm?pubID=790)

[Bill Moore]

Jed, I skimmed the documents and both look well worth the time required to read (when time permits).

Steve, I read your paper when you first published it. I have a highlighted copy somewhere in my files. I'm glad to see you're a member of the SWJ.


Bill

[relative autonomy]

Terror Inc. by Loretta Napoleoni

Has anybody read this? I think its a pretty great economic analysis of the other side of the War on Terror/

A teaser quote from the preface:

"...over the last fight years, members of armed organizations have been hunted down like criminals at home by the same political forces that have fostered them abroad; the final aim being to serve the economic interest of the West and its allies, Muslim oligarchies and...the former Soviet Union in the past and Russia at present.This duality provided terror organizations with the motives to strike back and the opportunity to build their own economy. I have defined this phenomenon as the New Economy of Terror, an international network linking the support and logistical systems of armed groups. Today the New Economy of Terror is a fast growing international economic system, with a turnover of about 1.5 trillion, twice the GDP of the United Kingdom, and is challenging Western Hegemony, What we are facing today is the global class between to economic systems on dominant--Western Capitalism--the other insurgent--the New Economy of Terror...
...this scenario is reminiscent of the Crusades, when Western Chirstendom rebelled against the domination of Islam. Behind the religious conflagration, economic forces initiated and sustained the Crusades, enabling the West to repel Islam and begin its march to dominance....the political and economic dominance of the West has hindered the expansion of emerging economic and financial forces in the Muslim world. These forces have forge alliances with Islamist armed groups and hard-line religious leaders in a campaign to rid Muslim countries of Western influence and domestic oligarchic rulers. As in the Crusades, religion is simply the recruitments tool; the real driving force is economics.
The New Economy of Terror has become an integral part of the global illegal economy, generating vast amounts of money. This river of cash flows into traditional economies, primarily the US, where it is recycled. It has devastating effects on Western business ethics, but above all it cements the many links and opens new ones between the New Economy of Terror and legal ones.
September 11 was rude awakening for the world. It has triggered a war against a phenomenal enemy, who will attack whenever possible. What the world has not realized is that this enemy is the product of the polices of dominance adopted by Western governments and their allies--the oligarchic powers of the Middle East and Asia--its monetary lifeline is deeply intertwined with out own economies. The essence of it is being the New Economy of Terror."

[goesh]

I think the real money numbers are like the real terrorists - it's hard to flush them into full light for all to see. The alternate energy impetus is driven in part by these concerns you have posted, I'm sure of that much at least. Crooks have for a long time washed money with the soap of legitimacy but the collateral markets of clean and dirty gelt seem to take on a life of their own, distinct from their origins and what they create often runs contrary to the intent of their origins. Drugs 'n guns are the two most lucrative venues to be tracked IMHO.

[Rex Brynen]

...this scenario is reminiscent of the Crusades, when Western Chirstendom rebelled against the domination of Islam. Behind the religious conflagration, economic forces initiated and sustained the Crusades, enabling the West to repel Islam and begin its march to dominance....the political and economic dominance of the West has hindered the expansion of emerging economic and financial forces in the Muslim world. These forces have forge alliances with Islamist armed groups and hard-line religious leaders in a campaign to rid Muslim countries of Western influence and domestic oligarchic rulers. As in the Crusades, religion is simply the recruitments tool; the real driving force is economics.

I'm analytically allergic to sweeping, monocausal explanations, and frankly I think this one is especially deeply flawed.

This is not to say that there aren't important confluences and interrelationships between formal and informal economies, criminal activity and armed nonstate groups/terrorism--such groups, like all institutions, need to generate resources. However, to lump (as this seems to do) all Islamist political mobilization to an epiphenomenon of economic interest, to ignore political grievances and domestic settings, and even to lump very different groups together seems to me to be more about sound-bites (or word-bites) than it is about analyzing the real world.

More broadly, I think there is an interesting phenomenon whereby a variety of audiences--politicians, policymakers, the press, the public, even new CT professionals--look for an easy, engaging, sweeping diagnosis and answer to current security challenges. In my view, not only is it NOT that easy, but the real pay off is in understanding precisely the complexities and variations at work.

[Penta]

More broadly, I think there is an interesting phenomenon whereby a variety of audiences--politicians, policymakers, the press, the public, even new CT professionals--look for an easy, engaging, sweeping diagnosis and answer to current security challenges. In my view, not only is it NOT that easy, but the real pay off is in understanding precisely the complexities and variations at work.

Never mind the payoff - the complexity and puzzle of it is where the fun is.

[relative autonomy]

I'm analytically allergic to sweeping, monocausal explanations, and frankly I think this one is especially deeply flawed.

This is not to say that there aren't important confluences and interrelationships between formal and informal economies, criminal activity and armed nonstate groups/terrorism--such groups, like all institutions, need to generate resources. However, to lump (as this seems to do) all Islamist political mobilization to an epiphenomenon of economic interest, to ignore political grievances and domestic settings, and even to lump very different groups together seems to me to be more about sound-bites (or word-bites) than it is about analyzing the real world.

More broadly, I think there is an interesting phenomenon whereby a variety of audiences--politicians, policymakers, the press, the public, even new CT professionals--look for an easy, engaging, sweeping diagnosis and answer to current security challenges. In my view, not only is it NOT that easy, but the real pay off is in understanding precisely the complexities and variations at work.

The book is an economic analysis. it maybe be limited economic determinism to a degree but i don't think that makes it sweeping and monocausal. Napoleni talks about the emergence of codified irregular warfare doctrines how the US and USSR spread them around the world. Between the Cold War (and especially foreign support for corrupt dictators) and wars for national liberation there are a lot of armed groups. she details how they construct a "state-shell" to create and economy to support their efforts and becuase armed groups, and especially armed revolutionary movements, have to out administer their opponents to perpetuate and institutional their opponents illegitimacy. These state shells are linked in many concrete and readily observable ways. Here is just one example from the book:

"In Lebanon in 1972, George Habash hosted one of the first international summits to form a front against Zionism and Western imperialism. Representatives came from the Japanese Red Army, the Iranian Liberation Front, The IRA, the Bader-Mienhof, and the Turkish Revolutionary People's Liberation Front. The participants agreed to set up an international network which included economic and financial cooperation, the exchange of intelligence, sharing safe houses, joint training programs and arms purchases."

The policies of the Cold War and War on Terror fuel armed groups. Armed groups operate in the same clandestine space as organized crime and intelligence agencies. I don't think it is sweeping or monocausual to detail their economic relationships, how those developed into a real economic force and how that force helps to motivate the War on Terror.

I would really suggest actually reading the book before you write it off. You may not agree with her world-systemic analysis but she gives a lot of insight into how armed groups operate and are funded. Also I bet there is some new information in there that you will be happy to have read and learned.

[Jedburgh]

....I would really suggest actually reading the book before you write it off. You may not agree with her world-systemic analysis but she gives a lot of insight into how armed groups operate and are funded. Also I bet there is some new information in there that you will be happy to have read and learned.
Well, given the bit from the preface that you quoted at the top of the thread, I'd say that Rex's statement is dead on. Based solely on what you've given us, I'd hesitate to waste the limited time I have to deal with my overloaded reading list on junk.

But I did take the time to look her up, and read through some of her other commentaries and interviews that are readily available. I'll give her that she's a smart woman, and well-informed on the broader general subject. However, the impression that I ultimately come away with is that she's made some seriously flawed assumptions - both about the threat, and about the manner in which the agencies tasked with monitoring and disrupting terrorist financing are dealing with the threat. In some interviews, she comes off as very patronizing with those assumptions of hers. In sum, I perceive her personal political beliefs coloring her analysis to a degree that it contaminates her conclusions.

[Rex Brynen]

I would really suggest actually reading the book before you write it off. You may not agree with her world-systemic analysis but she gives a lot of insight into how armed groups operate and are funded. Also I bet there is some new information in there that you will be happy to have read and learned.

Actually, I read most of what she has on her website (http://lorettanapoleoni.com) before posting--and, as I said, was not impressed. Partly, this is because her sweeping meta-economic analysis gets in the way of her insights into particular operational and financial intersections.

Moreover, some of her insights into insurgent finances are simply wrong--for example, her throw-away statements on Fateh's diversion of funds in the Arafat era (http://www.antiwar.com/orig/napoleoni.php?articleid=8598) are incorrect, and show no knowledge of the vast amount of OS material on the mechanics, destinations, and purposes of revenue diversions (including a very large IMF report and several available forensic audits). In the same piece she quotes Arafat on Hamas (a completely unreliable source), and in so doing contributes to a grand tradition of exaggerated accounts of Israel's role in Hamas' creation. She also dramatically overstates the magnitude and role of Hamas financing and social services in recruiting (again, an area where there is some OS data).

These might seem nitpicks, but they all point to an inclination to shoehorn data to support a grand thesis, and in so doing distorting the former.

[relative autonomy]

These might seem nitpicks, but they all point to an inclination to shoehorn data to support a grand thesis, and in so doing distorting the former.

You're probably right, I am not all that familiar with Hamas to evaluate her or your claims. Her thesis is probably too board to be proven but at the same time i think there is some worth to trying to explain events on the level of world systems. It's nice to have frameworks to locate events within even if the framework flattens some of the complexity.

I would like to know if anyone else knows of another work that tries to explain the macro-economics of the war on terror?

As far as her analysis being tainted by her politics, i don't think that makes different than any other person who has ever written anything. Jedburgh, maybe it just seems like more of a problem becuase you don't agree with her politics? Either way, calling a well researched book by written by a former Fulbright scholar and London School of Economics PhD "junk" is a bit misguided. Every work has it flaws and personal biases but if we only read what we agree with were not really interested in solving problems as much as perusing political agendas and I think therein lies the fundamental dilemma of the war on terror but that is another topic.

At the end of the day, though, I think her basic argument is spot on: that corrupt dictatorships, supported by foreign powers, have kept an increasingly dynamic business class down in the middle east. This political situation, coupled with Cold War meddling in wars of national liberation, created very real motivations for armed to groups to form and try to out-administer their state and create a economy that can provide for the population better than the formal one. These economies came to be linked becuase they operate in the same clandestine space and often share the same broad political goals. The fact that Islamist banks filled the power vacuum in the Central Asia and the Caucuses--two places were the War on Terror existed in a very dramatic fashion before 9/11--after the USSR collapsed and Soviet subsides dried up speaks for itself. I think conflating this with the crusades is a bit much but I think an ambitious economic analysis of the War on Terror is needed and, as far as I know, this is the only work that attempts to do so.

[Jedburgh]

As far as her analysis being tainted by her politics, i don't think that makes different than any other person who has ever written anything.
Everyone writes from their own personal perspective. However, when composing anything that purports to be an in-depth analysis of an issue, it is important to make a conscious effort to put those personal biases aside, otherwise the final product leans more towards op-ed than reasoned analysis. I tend to be more dismissive of the former than the latter.

Jedburgh, maybe it just seems like more of a problem becuase you don't agree with her politics?
Now you are the one making assumptions. Anyone attempting to come to grasp the nuances of any issue needs to look at it from many points of view. Dismissing perspectives because you dislike their politics is foolish. Dismissing a product because it is poorly put together is a completely different matter. I think perhaps Rex's specific observations highlighted the latter point about the book better than my general comment.

Either way, calling a well researched book by written by a former Fulbright scholar and London School of Economics PhD "junk" is a bit misguided.
I you believe that Fulbright scholars and PhDs (the institution doesn't matter) are somehow on some sort of intellectual pedestal and incapable of publishing "junk", then you still have much to learn.

[relative autonomy]

jedburgh, i understand your points and i think they're fair enough but do you know of any economic analysis any work similar to this that you think is superior?

[Jedburgh]

...Do you know of any economic analysis any work similar to this that you think is superior?
No. I'll just quote Rex here:

More broadly, I think there is an interesting phenomenon whereby a variety of audiences--politicians, policymakers, the press, the public, even new CT professionals--look for an easy, engaging, sweeping diagnosis and answer to current security challenges. In my view, not only is it NOT that easy, but the real pay off is in understanding precisely the complexities and variations at work.

The operational funding of terrorist networks and autonomous cells is a very complex issue that also encompasses such diverse subject areas as transnational organized crime, diaspora funding of insurgent movements, narco-and-human trafficking, black markets - both local and transnational, etc. To truly understand all of the above in the context of any specific terror organization also requires a baseline of knowledge about that organization's operational structure and the environment in which it operates.

Rather than seeking a single tome with all the answers, I suggest good old fashioned research and study. It would probably help if you initially narrow your focus and try to study in-depth just one aspect. Look over what's available from official sources, such as EuroPol (http://www.europol.europa.eu/index.asp?page=publications&language=), FinCEN (http://www.fincen.gov), the GAO (http://www.gao.gov), NCJRS (http://www.ncjrs.gov/App/Publications/Alphalist.aspx), etc. etc. as well as looking over products from the wide spectrum of private entities. The people who show up at Congressional and Senate hearings on the subject often have interesting things to say - and the transcripts are almost always available on-line. As an FYI, Tamara Makarenko is one author who has written a great deal of substance on transnational organized crime as well as its links - existing and potential - with terrorism.

[Rex Brynen]

Let me move the discussion away from Napoleoni for a moment, and towards a broader issue that has increasingly troubled me. It may seem like a bit of a tangent to begin with, but you'll see by the end how it connects.

Since 9/11, there has been--for obvious reasons--a dramatic expansion in the number in the number of (government) analysts addressing CT and Middle Eastern issues. Many of these have been newly-minted graduate (or even undergraduate) students with some topic or area expertise. Some of this group are already very good, some may be good one day, and some are far from impressive. A key issue here will be mentoring, and whether organizations have the seasoned, skilled, mid-level analysts who can nurture a new generation. A second key issue will be human resource management, and whether the system recognizes and appropriately deals with the gifted, the promising, and the flawed among the new recruits.

In addition, there are a number of organizations with traditionally little CT or ME analytical responsibility, where they've felt the need to develop it, whether by new hires or by reassigning mid-level professionals with very different previous responsibilities. I've found that, at times, this group seeks an overarching framework of analysis, a theme or motif as it were, to make sense of the complex new world and responsibilities into which they've been thrust. As a result, they buy into catchy (sometimes rather politicized) explanations that reduce issues to near sound-bites, and hence make the complex world around them more intellectually manageable.

A case in point: I was at a conference of security and intelligence professionals and scholars a few weeks ago in which a great number of the participants fell into this later category. One of the speakers was Melanie Philips, British author of the book Londonistan (http://www.amazon.com/Londonistan-Melanie-Phillips/dp/1594031444).

Now, I recognize that immigration, refugee policy, diasporas, and multiculturalism all have security implications. However, Philips presentation (and the book) was a thinly-veiled rant against all of these things in the name of preserving a narrow, even racist, vision of British identity. As her website (http://www.melaniephillips.com/) notes:


Melanie Phillips pieces together the story of how Londonistan developed as a result of the collapse of British self-confidence and national identity and its resulting paralysis by multiculturalism and appeasement. The result is an ugly climate in Britain of irrationality and defeatism, which now threatens to undermine the alliance with America and imperil the defence of the free world.

The actual presentation was far more strident.

As I listened to her, I was certain that everyone in the room would see her simplistic, narrow-minded, highly ideological "analysis" for what it was. Much to my surprise, however, a great many people found it attractive: the problem of terrorism could be simply understood by recognizing that we had departed from our classic 1950s values, that we had contaminated Western culture with foreign imports, that we had become defeatists inappropriately ashamed of the grand colonial past, that the vast majority of Muslims were jihadist sympathizers, and that consequently immigration and refugee policies were little more than fifth columns. Typically those that found the call most seductive were middle-aged professionals recently thrust within their departments into some sort of security and intelligence role, and much less so younger analysts (and almost no one with any extensive analytical background in the issues). Clearly there was a real danger that this simple (and simplistic), nicely-packaged drivel
could drive out much more nuanced, messy, and less easily digested diagnosis. As someone who spends his analytical time with well-informed, experienced area and issue professionals, it was frankly quite a shock.

My reaction to Napoleoni is, in some ways, fueled by the concern that although she offers a very different analysis (and clearly knows her issues infinitely better than Philips, who is a political columnist and not a scholar), it offers the same kind of seductive appeal and suffers from some of the same shoehorning of data to fit a preconceived analytical frame.

I've also become intrinsically suspicious of scholars and analysts with flashy self-promoting websites that use their own name as the domain URL ;)

Jedburgh (and anyone else): I would be interested if you've observed any of the same issues arising from the expansion of CT and analytical capabilities within organizations, especially those with less prior experience in these areas. Or did I just have an unlucky experience?...

[Rex Brynen]

The problem with writing SWC posts from your office is that you get distracted by phone and visitors, take half an hour to finish your comment, and one of the regulars posts on an overlapping issue before you can get your two cents in :wry:

[Abu Suleyman]

While I have yet to read the book, and am loathe to comment based merely upon a review, or a summary which may over simplify an otherwise elegant explanation, I think that the title may be of value.

Perhaps it is just me, but the title seems to be reminiscent of the Murder Inc. (http://en.wikipedia.org/wiki/Murder_Inc) of depression era Organized Crime. In that case, organized criminality became an industry, almost unto itself. Of course there were supporting funds, such as the ubiquitous prostitution, extortion and 'rum running'. Nevertheless, it is possible that there is an undercurrent of political economy. This may be worth exploring in a separate thread. Are we dealing with an entire economic movement, and if so is it more like the advent of the automobile industry, and part of the existing structure, or is it more like communism and antithetical to existing economics? Should this be discussed elsewhere, or has it already been?

[marct]

This may be worth exploring in a separate thread.... Should this be discussed elsewhere, or has it already been?

Probably worth exploring and we may as well keep it in this thread for now...


Are we dealing with an entire economic movement, and if so is it more like the advent of the automobile industry, and part of the existing structure, or is it more like communism and antithetical to existing economics?

Is it an economic movement? Sure, but it has also been around for quite a while - at least 100 years and, I'm certain, probably a lot longer. I don't have the exact references at hand, but I believe that the extent was estimated at about 4-5 billion Euros in the EU in 2004, and that was only the part dealing with fraudulent claims for government assistance that was being funneled into the network.

It is definitely part of existing structures of capital flow, but those are, currently, closer to a form of capitalist feudalism that either free market or central planning (BTW, the same was true of Henry Ford's operation).

[Jedburgh]

....Perhaps it is just me, but the title seems to be reminiscent of the Murder Inc. (http://en.wikipedia.org/wiki/Murder_Inc) of depression era Organized Crime. In that case, organized criminality became an industry, almost unto itself. Of course there were supporting funds, such as the ubiquitous prostitution, extortion and 'rum running'. Nevertheless, it is possible that there is an undercurrent of political economy. This may be worth exploring in a separate thread. Are we dealing with an entire economic movement, and if so is it more like the advent of the automobile industry, and part of the existing structure, or is it more like communism and antithetical to existing economics? Should this be discussed elsewhere, or has it already been?
The point that has been made thus far in the thread is that there is no all-encompassing, world-wide "economic movement" financially supporting terrorism. Each terrorist organization has to be examined in its own unique context, i.e. like the case study RAND completed a few years back looking at the LTTE and diaspora support.

There have also been a few outstanding studies of how former violent leftist organizations shifted funding after the fall of the Soviet Union - many just fell apart, some dropped the ideology and shifted to become plain ol' criminal enterprises, a small number managed to blend various aspects of illicit funding with continued operations, often with a bit of a different focus.

There is certainly value in exploring financial support to various specific terror organizations. Perhaps it may be better to discuss the issue in the specific regionally-focused forum where the group in question operates (i.e. Jemaah Islamiyyah in Asia-Pacific (http://council.smallwarsjournal.com/forumdisplay.php?f=75), Hezballah in the Middle East (http://council.smallwarsjournal.com/forumdisplay.php?f=73), or the FARC in the Americas (http://council.smallwarsjournal.com/forumdisplay.php?f=77).)

[marct]

Hi Ted,


The point that has been made thus far in the thread is that there is no all-encompassing, world-wide "economic movement" financially supporting terrorism. Each terrorist organization has to be examined in its own unique context, i.e. like the case study RAND completed a few years back looking at the LTTE and diaspora support.

Quite true. What we appear to have is a rise in micro-economic networks, some of which are being used by terrorist organizations, some of which have no bearing on them, and some of which may be partially used by them.

Personally, I think it is important to differentiate between systems, system components, actors within those systems and the motivations (tactics) of those actors, and this distinction may prove useful. I've been working with a mature student for a couple of years now (she works for our federal government) looking at the manipulation of social programs by "terrorist" organizations (sorry, but you know I have a problem with that label ;)).

So, let me give you a case in point....

Some years back (about 1993-4) Canada let in a large number of Somali refugees (~6,000), concentrated in Ottawa and Toronto on humanitarian grounds. I'm not sure how much all of you know about the refugee system in Canada, but it is much closer to that of Europe than that of the US: subsidized (or free) housing, welfare checks, medical and dental care, etc. Pretty soon, it was discovered that a fair amount of the money being paid out in social welfare payments was being sent back to family members in Somalia through informal banking systems, usually with a 10-15% carrying charge. Some of this money ended up being used to buy weapons, which is not surprising if you know anything at all about Somalia :rolleyes:.

All of this is technically "legal", but some of the money ended up in the hands of groups and individuals who are considered to be "terrorists". Was this a "plot to defraud the Crown"? Nope, it was an extension of the clan system which requires that all clan members aid others in the clan - a very ancient system. There have been systematic attempts to defraud the Crown (and other Western governments), but there is certainly no overarching mastermind behind them :D.

[bourbon]

As an FYI, Tamara Makarenko is one author who has written a great deal of substance on transnational organized crime as well as its links - existing and potential - with terrorism. [/URL]

I have been raiding my local libraries Jane's achieves, burning out Xerox's, copying Makarenko articles these days. Good info there.

Has anyone read Alms for Jihad: Charity and Terrorism in the Islamic World (http://www.cambridge.org/us/catalogue/catalogue.asp?isbn=0521857309), by J. Millard Burr and Robert O. Collins? Cambridge press got sued under the U.K's generous libel laws by an Arab businessman, and they recalled the lot and pulped it. I snagged a copy. If there is interest, it's possible a contraband pdf could materialize out of the ether.

[Rex Brynen]

Al-Qaeda Masters Terrorism On the Cheap (http://www.washingtonpost.com/wp-dyn/content/article/2008/08/23/AR2008082301962.html?hpid=topnews&sid=ST2008062302295&s_pos=)
Financial Dragnet Largely Bypassed

By Craig Whitlock
Washington Post Foreign Service
Sunday, August 24, 2008; Page A01



LONDON -- Since the Sept. 11, 2001, attacks, al-Qaeda has increasingly turned to local cells that run extremely low-cost operations and generate cash through criminal scams, bypassing the global financial dragnet set up by the United States and Europe.

Although al-Qaeda spent an estimated $500,000 to plan and execute the Sept. 11 attacks, many of the group's bombings and assaults since then in Europe, North Africa and Southeast Asia have cost one-tenth as much, or less.

The cheap plots are evidence that the U.S. government and its allies fundamentally miscalculated in assuming they could defeat the network by hunting for wealthy financiers and freezing bank accounts, according to many U.S. and European counterterrorism officials.

I don't know anyone in the CT business who thought that they "could defeat the network by hunting for wealthy financiers and freezing bank accounts" — it is all part of engagement on many, many fronts, to which AQ (and others) naturally have countermoves of their own. Still, an interesting article.

[bismark17]

It's just another example of their adaptability to their environment. Self sufficient cells might pose a lot of security issues but can be a successful model if they don't stupid things that bring undue attention to themselves.
Obviously their threat capabilities will be on a lower scale.

[Jedburgh]

WINEP, Nov 08: The Money Trail: Finding, Following, and Freezing Terrorist Finance (http://www.washingtoninstitute.org/download.php?file=PolicyFocus89.pdf)

....Chapter 1, the introduction to this monograph, provides a broad overview of the subjects we cover, as well as some of our basic findings. In chapter 2, we explain the importance of the little-understood efforts to combat terrorist financing, and why they are and should be an important part of the global counterterrorism campaign. Chapter 3 lays out how terrorist financing—like the terrorist threat itself—is rapidly evolving, frequently in response to international efforts to combat it. As we discuss in this chapter, the terrorist groups’ adaptation in how they raise, store and, move funds can often frustrate governmental efforts to detect and stop them. In chapter 4, we assess U.S. and international efforts to combat terrorist financing since the September 11 attacks—first laying out the many areas where steps forward have been taken, then exploring some of the remaining challenges. In chapter 5, we gauge how effective U.S. and international efforts have been, pointing to specific signs of success in an area in which progress is often difficult to measure. In chapter 6, we offer numerous recommendations for U.S. policymakers to bolster the international regime in this critically important area. Chapter 7 provides three case studies, providing “status checks” on the terrorist-financing related activities of three key terrorist groups—al-Qaeda, Hamas, and Hizballah.....

[Jedburgh]

RAND, 2 Mar 09: Film Piracy, Organized Crime, and Terrorism (http://www.rand.org/pubs/monographs/2009/RAND_MG742.pdf)

This report presents the findings of research into the involvement of organized crime and terrorist groups in counterfeiting a wide range of products, from watches to automobile parts, from pharmaceuticals to computer software. It presents detailed case studies from around the globe in one area of counterfeiting, film piracy, to illustrate the broader problem of criminal—and perhaps terrorist—groups finding a new and not-much-discussed way of funding their nefarious activities. Although there is less evidence of involvement by terrorists, piracy is high in payoff and low in risk for both groups, often taking place under the radar of law enforcement......

[Kevin23]

For my undergrad poli sci class we have to write a final paper and my prompt is on the worldwide illegal illicit goods trade. Which deals with everything from knockoff parada bags, sunglasses and pirated movies to bogus medinces, auto/aircraft parts, as well as illegal arms, and even humans themselves. Now in my paper I want to deal with this particular trade's links to organized crime and terrorism. However I haven't been able to find many useful sources in the academic library here at the college and the same goes for the internet also.

So I was wondering if someone would mind pointing me in the right direction in terms of finding sources?

Thank you,

[davidbfpo]

Kevin,

This blogsite often comments on the links between crime and terrorism, albeit with a focus on just a few places: http://counterterrorismblog.org/ There is a recent story from The Guardian on cocaine into West Africa and AQIM. A fellow blogsite worth trawling is: http://www.investigativeproject.org/ and www.nefafoundation.org

I have commented before on this reported overlap: http://council.smallwarsjournal.com/showthread.php?t=6290&page=3 'Mice & Men' thread and http://council.smallwarsjournal.com/showthread.php?t=6806 'Gangs & Insurgencies'.

Try Europol: http://www.europol.europa.eu/index.asp?page=home&language=

[Jedburgh]

For my undergrad poli sci class we have to write a final paper and my prompt is on the worldwide illegal illicit goods trade. Which deals with everything from knockoff parada bags, sunglasses and pirated movies to bogus medinces, auto/aircraft parts, as well as illegal arms, and even humans themselves. Now in my paper I want to deal with this particular trade's links to organized crime and terrorism. However I haven't been able to find many useful sources in the academic library here at the college and the same goes for the internet also.....
RAND published a study earlier this year, Film Piracy, Organized Crime, and Terrorism (http://www.rand.org/pubs/monographs/2009/RAND_MG742.pdf)

This report presents the findings of research into the involvement of organized crime and terrorist groups in counterfeiting a wide range of products, from watches to automobile parts, from pharmaceuticals to computer software. It presents detailed case studies from around the globe in one area of counterfeiting, film piracy, to illustrate the broader problem of criminal—and perhaps terrorist—groups finding a new and not-much-discussed way of funding their nefarious activities. Although there is less evidence of involvement by terrorists, piracy is high in payoff and low in risk for both groups, often taking place under the radar of law enforcement....
The study was funded by the Motion Picture Association, thus the focus on film piracy. However, as the quoted intro blurb states, the study ranged across a wider range of pirated goods than simply films. You may find some sources cited at the end of the book that could be of use - you could also attempt to contact the authors individually and discuss their insights and sourcing.

[bourbon]

Terrorist Precursor Crimes: Issues and Options for Congress (http://www.fas.org/sgp/crs/terror/RL34014.pdf). CRS, May 24, 2007. (PDF)

Congressional Research Service reports are excellent primers on issues, and for undergrad homework. Most can be found at FAS (http://www.fas.org/sgp/crs/index.html). Google Scholar (http://scholar.google.com) and Google News Archives (example (http://news.google.com/archivesearch?pz=1&cf=all&ned=us&hl=en&q=terrorism+counterfeit&cf=all)) are also invaluable tools for basic undergrad research.

One of the more lucrative illicit schemes in the US for by terrorist financing groups involves tax fraud through tobacco smuggling, see:
Tobacco and Terror: How Cigarette Smuggling is Funding our Enemies Abroad (http://www.foxnews.com/projects/pdf/Cigarette_smuggling_042408.pdf), Prepared by the Republican Staff of the U.S. House Committee on Homeland Security. (PDF)

[Jedburgh]

RAND, 15 Dec 10: An Economic Analysis of the Financial Records of al-Qa'ida in Iraq (http://www.rand.org/content/dam/rand/pubs/monographs/2010/RAND_MG1026.pdf)

This monograph analyzes the finances of the militant group al-Qa‘ida in Iraq (AQI) in Anbar province during 2005 and 2006, at the peak of the group’s power and influence. We draw on captured financial records that recorded the daily financial transactions of both one specific sector within Anbar province and the AQI provincial administration. To our knowledge, this monograph offers one of the most comprehensive assessments of the financial operations of AQI or any other contemporary Islamic militant group....

Note: This post is copied from the Al Qaeda in Iraq thread, as it fits in both areas. (http://council.smallwarsjournal.com/showthread.php?t=3416)

[Bill Moore]

http://www.whitehouse.gov/sites/default/files/Strategy_to_Combat_Transnational_Organized_Crime_J uly_2011.pdf


In years past, TOC was largely regional in scope, hierarchically structured, and had only occasional links to terrorism. Today’s criminal networks are fluid, striking new alliances with other networks around the world and engaging in a wide range of illicit activities, including cybercrime and providing support for terrorism. Virtually every transnational criminal organization and its enterprises are connected and enabled by information systems technologies, making cybercrime a substantially more important concern. TOC threatens U.S. interests by taking advantage of failed states or contested spaces; forging alliances with corrupt foreign government officials and some foreign intelligence services; destabilizing political, financial, and security institutions in fragile states; undermining competition in world strategic markets; using cyber technologies and other methods to perpetrate sophisticated frauds; creating the potential for the transfer of weapons of mass destruction (WMD) to terrorists; and expanding narcotrafficking and human and weapons smuggling networks. Terrorists and insurgents increasingly are turning to criminal networks to generate funding and acquire logistical support. TOC also threatens the interconnected trading, transportation, and transactional systems that move people and commerce throughout the global economy and across our borders.

While researching documents to better understand the potential links between terrorism and transnational organized crime I came across our relatively new TOC National Strategy.

[Bill Moore]

Fletcher Forum on World Affairs, Winter 2010: Tracking Narco-Terrorist Networks: The Money Trail (http://washingtoninstitute.org/opedsPDFs/4bbcba42e5c8a.pdf)

Before September 11, 2001, al-Qaeda funded and controlled operations from its base in Afghanistan. Al-Qaeda provided funding for the East Africa embassy bombings in 1998, the 2000 attack on the USS Cole in Yemen, and the 2001 World Trade Center attacks. Today, the terrorist threat is more decentralized, with the al-Qaeda core no longer funding other terrorist groups, cells, or operations as they did in the past. Local cells are being increasingly left to fund their own activities. While many fundraising techniques remain popular, including abuse of charities and otherwise legitimate businesses, terrorist cells increasingly engage in criminal activity to fund their actions. For example, Al-Jemaah al-Islamiyah, an al-Qaeda affiliate in Southeast Asia, helped to finance the 2002 Bali bombings by robbing jewelry stores. Another example is the 2005 attacks in London, which were partially financed by credit card fraud.
Break

All things considered, the growing nexus between international terrorism and organized crime may actually be a positive development. For one, tracking terrorists for their illicit activities, rather than their terrorism-based endeavors, is less complicated. Also, while countries may adhere to dissimilar definitions of terrorism or hold divergent lists of designated terrorist organizations, there is more of a consensus on the need to fight crime.

CRS, 24 May 07: Terrorist Precursor Crimes: Issues and Options for Congress (http://www.fas.org/sgp/crs/terror/RL34014.pdf)

According to numerous terrorism scholars and analysts, there are indications
that terrorists are increasingly relying on non-terroristic, precursor crimes to facilitate their terrorist attacks and/or further their terrorist campaign. Additionally, it appears that terrorist groups are diversifying and expanding the variety of crimes they commit. The cause for the increase in pre-attack criminal activity may be due to the following four factors:
- the decline in state sponsorship;
- the amateurization and decentralization of terror;
- enhanced counterterrorism measures,
- and changing terrorist demographics (i.e. shifts in ideology, strategy,
and capabilities).

According to the United Nations, there is a convergence of organized crime and ideologically driven terrorist groups. Antonio Maria Costa, a UN official with the Office on Drugs and Crime, reportedly believes the “world is seeing the birth of a new hybrid of organized-crime-terrorist organizations.” For example, media reports suggest that “Jihadists have penetrated as much as a third of the $12.5 billion Moroccan hashish trade.” According to the Brussels-based World Customs Organization, “counterfeiting is one of the fastest growing industries in the world with an estimated market worth more than [$]500 billion each year, or 7 percent of global trade!,” the illegal profits of which often go to fund terrorist organizations.

[Jedburgh]

The Joint Staff J-7 published a first version of a Commander's Handbook for Counter Threat Finance (http://www.dtic.mil/doctrine/doctrine/jwfc/ctf_hbk.pdf) on 13 Sep 11.

This handbook provides an understanding of the processes and procedures being employed by joint force commanders (JFCs) and their staffs to plan, execute, and assess counter threat finance (CTF) activities and integrate them into their joint operation/campaign plans. It provides fundamental principles, techniques, and considerations related to CTF that are being employed in the field and are evolving toward incorporation in joint doctrine.
As an aside, I found it interesting, given the current push for putting damn near everything behind CAC access, that this FOUO pub is openly available to the broad 'net public on the Defense Technical Information Center site.

[davidbfpo]

An article by Clint Watts (CWOT) which opens with:
I discuss the trade offs and disadvantages for al Qaeda affiliates such as AQIM that are dependent on illicit funding schemes, namely kidnapping, to sustain their operations. I conclude with the opinion that al Qaeda needs donations more than ransoms if they intend to orchestrate a comeback.

(He ends)...Another detractor of illicit revenue generation for al Qaeda groups is the scrutiny brought on terrorists by law enforcement and the military when they conduct illegal activities like kidnapping and drug smuggling. An important point that I overlooked in the FPRI post.

Link:http://selectedwisdom.com/?p=975

[davidbfpo]

As this is a wider than AQ thread I was puzzled to read Clint's comment and then minutes later on the BBC:
A Newry man is believed to be the first person successfully prosecuted for terrorist fund-raising in Northern Ireland.

Link:http://www.bbc.co.uk/news/uk-northern-ireland-21462050

Yes, the first person successfully prosecuted! 'The Troubles' started in 1969 and much has been made in the UK of having terror finance laws and enforcement. The report has no details and a Google search found little else.

[Bill Moore]

Some updates that are relevant to old and emergent security challenges, and the nexus between irregular adversaries and organized crime.

http://www.cnbc.com/id/100952225

Organized crime: World’s most lucrative criminal activities


Cross-border organized crime is big business, worth about $2.1 trillion per year, according to the United Nations Office on Drugs and Crime (UNDOC), equivalent to 3.5 percent of world GDP in 2009. That's more than six times the world's development aid budget for that year, and equivalent to about 7 percent of global exports of merchandise.


Perhaps unsurprisingly, trafficking illegal drugs is the most lucrative form of illicit business, constituting about half of all proceeds from transnational organized crime. However, plenty of money is also being made from less high-profile enterprises, such as smuggling natural resources such as timber, oil, and gold and other precious metals.

To learn more about this, and other highly profitable criminal activities, read on.

Crime gangs cash in on Europe's budget flights


This type of organized crime group flies gang members to a country in the morning to carry out a succession of quick-fire robberies, before flying out in the evening. They hand over their ill-gotten gains to criminal partners in the local area, and regularly take a different flight to a different country the following day. Private homes, businesses, high-value cars, machine parts and increasingly commodities like metal are all targets.


We need to make sure there is a swift exchange of intelligence - so we can get ahead of the game and identify these gangs before they strike, or at least get on the back of them as soon as they have done," he said. And make sure we have the means possible by which we can coordinate multinational arrest operations in the end... not working at a national level, but as a connected community.

http://www.stripes.com/news/middle-east/terrorism-newest-worry-for-cargo-ships-1.245154

Terrorism newest worry for cargo ships


“A rocket fired by suspected al-Qaida terrorists at a COSCO container ship as it transited the Suez Canal in August apparently hit a container crammed full of smuggled cigarettes,” the JOC article said, citing a report by the Irish Independent.

The illicit cargo, with an estimated street value of nearly $6 million, was headed to a phony furniture company in Dundalk, Ireland, part of a smuggling operation supposedly run by businessmen with links to the former members of the Irish Republican Army.

According to Irish press reports, the cigarettes were believed to have been acquired in Vietnam and were heading for Rotterdam, the Netherlands, when the ship was attacked. A tracking device was placed on the container at the Port of Rotterdam and tracked by satellite through Dublin Port and on to a village near Dundalk in County Louth, where four men were arrested.

This is serious, but on the lighter side it appears AQ exposed an international cigarette smuggling operation. Do they get reward money for this? :rolleyes:

[davidbfpo]

Within the linked document - written evidence given on 'Pursue', part of evidence presented to the House of Commons Select Committee on Home Affairs (HASC) - are several contributions on terrorist finance and counter-action. It includes officials and others, including charities. On a quick read some "gems" lie within.

Link alas no longer works:http://www.parliament.uk/documents/commons-committees/home-affairs/CT%20Written%20Evidence.pdf

[davidbfpo]

I recently heard an open source analyst comment that the Syrian insurgents were receiving financial support, up to US$600m, from rich families and others in the Gulf who move the cash to Kuwait ostensibly to donate to Kuwaiti charities. Kuwait and the Gulf states have legislation on countering terrorism finance, but being charitable donations prefer to "look the other way". Plus a Salafist faction is present in the Kuwaiti parliament, who would not support an official response.

A partial support comes in this Kuwaiti newspaper report:http://alhayat.com/Details/568664 The Google translation is not perfect.

[Bill Moore]

I recently heard an open source analyst comment that the Syrian insurgents were receiving financial support, up to US$600m, from rich families and others in the Gulf who move the cash to Kuwait ostensibly to donate to Kuwaiti charities. Kuwait and the Gulf states have legislation on countering terrorism finance, but being charitable donations prefer to "look the other way". Plus a Salafist faction is present in the Kuwaiti parliament, who would not support an official response.

A partial support comes in this Kuwaiti newspaper report:http://alhayat.com/Details/568664 The Google translation is not perfect.

Ultimately this is a Shia-Sunni conflict at the strategic level, and Saudi is the leading Sunni State supporter of the Sunni resistance in Syria. I don't think they ever attempted to conceal that, but they are much more vocal about it now that they have publically changed the nature of their diplomatic relationship with the U.S. due to disagreement on U.S. policy towards Iran and Syria.

http://www.jpost.com/Middle-East/Saudis-Gulf-allies-to-boost-military-support-for-Syrian-rebels-independent-of-US-330461


Saudi Arabia and its Persian Gulf allies are moving to independently provide military support to Syrian rebels amid what they see as a failure of US leadership in the region, The Washington Post reported on Saturday, citing senior Gulf officials.

According to the report, the officials said that they have given up on the US as coordinator of efforts to arm and train Syrian rebels after Washington decided not to launch air strikes after the use of chemical weapons by Syria, as well as the US decision to engage in diplomacy with Iran over its nuclear program.

Also talk of Saudis desiring to buy nuclear weapons from Pakistan, so it doesn't appear stability in this region is on the horizon any time soon.

[davidbfpo]

More on the role of Kuwaiti individuals and others in raising funds for the violent Jihad in Syria:http://mideastafrica.foreignpolicy.com/posts/2013/12/04/shaping_the_syrian_conflict_from_kuwait?wp_login_r edirect=0#sthash.MqY5DsXo.dpbs

Curious to learn some support President Assad and of course there is now a law about to counter terrorism financing. Clearly working well.:wry:

[Firn]

It would be interesting to know a bit more about how efficient the transfer from the oil $ to the islamist fighters is. Tapping into the arsenals of the respective states should greatly ease the logistics and enhance the efficiency of the operations but as far as I know it left too obvious signs.

I have read little about the Syrian economy which must be in a terrible, terrible state and it is quite likely that USD, maybe somewhat intermixed with Euros has become the currency of choice in many areas.

[davidbfpo]

Links to two US media reports, a short one:http://mideastafrica.foreignpolicy.com/posts/2013/12/06/syria_s_gulf_brigades#.UqH7YEBhGc0.twitter and the pointer to a Brookings paper 'Playing with Fire: Why Private Gulf Financing for Syria’s Extremist Rebels Risks Igniting Sectarian Conflict at Home':http://www.brookings.edu/research/papers/2013/12/06-private-gulf-financing-syria-extremist-rebels-sectarian-conflict-dickinson

[davidbfpo]

'Strife' is a blog run from Kings War Studies and the series started today, with a "broad brush" review and opens with:
Al Qaeda, ISIS, and the Taliban are household names these days. Yet, in the climate of the ‘War on Terror’, how do organisations like these survive and even thrive? It takes more than just strong leadership and organizational skills to uphold the proper functioning of terrorist groups – it takes money. Terrorism is the culmination of costly planning. It includes the dissemination of ideology, maintenance of logistics, recruitment and training of operatives, and perpetration of the terrorist act itself. Financial activity related to terrorism accounts for an estimated 5% of the annual global output, or about $1.5 trillion US$.

Link:http://strifeblog.org/2015/01/07/financing-terror-a-strife-4-part-series/

Coming up:
Over the next few weeks Strife will feature a four-part series on terrorist financing. Each author will examine a different method of terrorist financing, using modern and varied case studies, offering a new look at who and what is funding today’s terror activities. Arne Holverscheid will discuss the role of private Kuwaiti donors in financing rebel groups in Syria affiliated with terror organisations and blurring the lines between good and bad, friend and foe. Claire Mennesier will examine the involvement of Pakistan in financing terror groups, and the motivations and challenges presented by this involvement. Samuel Smith will address the frightening trend of kidnapping for ransom as a source of finance for terror groups through a case study of the Abu Sayyaf Group in the Philippines and Southeast Asia. Finally, Drew Alyeshmerni will shed light upon the use of charities as a cover for terrorist financing and the implication that defining certain organisations as terror groups may have upon the eradication of this source of financing.

[davidbfpo]

Once again Norway's FFI provides public insight, with a report 'The financing of jihadi terrorist cells in Europe', in English and 68 pgs long. Short of time read the summary and the conclusion.

From the summary:
This report takes stock of how jihadis in Western Europe raise, move, and spend money. Usingnew data from court documents and media reports, it reviews the financing of 40 jihadi terrorist cells that have plotted attacks in Europe, and examines a selection of cases in depth. European terrorists’ financial activities are remarkably ordinary. Jihadis who have plotted attacks in Western Europe most commonly relied on funding from the cell members’ own salaries and savings. The vast majority of the cells studied (90 %) were involved in income-generating activities, and half of them were entirely self-financed. Only one in four received economic support from international terrorist organizations such as al-Qaida.

Finally, jihadi terrorist attacks in Western Europe have generally been cheap, with three quarters of the plots studied estimated to cost less than $10,000.Link:http://www.ffi.no/no/Rapporter/14-02234.pdf

Anyone aware of a similar report covering the USA?

[davidbfpo]

A somewhat odd, UK-centric BBC commentary by a RUSI expert:
Over the past 18 months, hundred of people have travelled from the UK to fight in Syria. Most have joined the self-styled Islamic State. Could banks assist the security authorities identify some of these so-called foreign fighters by uncovering "telltale" financial footprints?

(Near the end) ... engagement between the authorities and banks in exploiting this capability for security purposes remains limited despite the obvious benefits it can bring.
Link:http://www.bbc.co.uk/news/business-32722318

'Suspicious Activity Reports', known as SAR, are the common referral mechanism from the banks and other insitutions to the police. In both the UK & USA there are plenty of them, with only very few being productive. Above all "cash is king" and so the value of such cooperation is very moot.

[AdamG]

Gotta give them credit for knowing how to game the Socialist System.

Thirty-two Danes have collected nearly 400,000 kroner worth of unemployment benefits while fighting in Syria, it was revealed on Monday.
http://www.thelocal.dk/20150518/danish-jihadists-received-thousands-in-welfare-benefits

[davidbfpo]

Another short RUSI commentary; the summary:
As recent reports highlight the increasing risk of Daesh-inspired lone actor or small cell homeland terrorist attacks, an urgent recalibration of terrorist-finance disruption efforts is required to include both funds flowing to Syria/Iraq and those raised to be used at home.

Near the end:
The traditional measures in place for tackling terrorist financing play little role in disrupting this rapidly emerging form of low budget terror.
Link:https://www.rusi.org/analysis/commentary/ref:C55D1C7FA31DB6/#.VeB3KH2pNiV

[davidbfpo]

A Canadian lawyer's viewpoint, a 14 pg. document from March 2015, which on a quick scan has some gems within:http://www.duhaimelaw.com/wp-content/uploads/2015/04/White-Paper-Terrorist-Financing-Methods1.pdf

The author's CV:http://www.duhaimelaw.com/lawyers/christine/

[davidbfpo]

Taken from the current Yemen thread and cited in part:
The biggest beneficiary of the war has been AQAP, which now controls some six hundred kilometers of the southern coastline—from just outside Aden to Mukalla, the fifth largest city in Yemen and the capital of Hadramaut province. When AQAP seized the Mukalla at the start of the war, they looted $100 million from its banks. They are now earning at least $2 million and perhaps as much as $5 million a day in smuggling oil. The group is stronger today than ever before.

Link:http://www.brookings.edu/blogs/markaz/posts/2016/04/12-yemen-ceasefire-us-security-riedel

My interest was prompted by a "lurker" asking does the anti-money laundering legal structure work, when terrorist groups can be self-financing?

[davidbfpo]

A RUSI paper, 42 pgs (un-read yet) by a US author:
This paper offers an overview of the aims of US policy, an examination of the US experience in implementing Sections 314 and 311 of the PATRIOT Act, and a consideration of the advantages and disadvantages of the US approach. It also draws lessons from US experience and provides seven principles for policy-makers to consider when developing public–private information-sharing arrangements at the national or international level.Link:https://rusi.org/publication/occasional-papers/targeting-security-threats-using-financial-intelligence-us-experience

[davidbfpo]

Thanks to a SWJ comment which linked to this book review of a 2015 book, which was missed:http://www.thewashingtonbookreview.com/br/how-to-fight-terrorist-financial-networks/

The book is Counterterrorism and Threat Finance Analysis during Wartime edited by David M. Blum and J. Edward Conway, Lexington Books (Rowman & Littlefield), US $85.00, Pp 212, February 2015, ISBN 978-0739180433.

The review states:
The editors have been members of either the Afghanistan Threat Finance Cell (ATFC) or the Iraq Threat Finance Cell. Both Blum and Conway were deployed in wars.

[davidbfpo]

May 2016 CTC Sentinel article by Magnus Ranstrop, on ISIS micro-financing methods in Europe:https://www.ctc.usma.edu/posts/microfinancing-the-caliphate-how-the-islamic-state-is-unlocking-the-assets-of-european-recruits


Abstract: Islamic State recruits from Europe are raising significant funds for the group through multiple microfinancing techniques within the European Union. Moneymaking schemes have included petty theft, fraudulent loan applications, social insurance fraud, and VAT fraud. A range of techniques are being employed by aspiring and active European Islamic State operatives to transfer money to the Islamic State in Syria and Iraq, including bringing money with them when they travel to join the group, withdrawing funds from money transfer businesses operating along the Turkey-Syria border, sending cash couriers, and using the hawala system. To shrink this funding pipeline, financial intelligence must be better integrated into EU counterterrorism efforts.

[davidbfpo]

Just spotted and not read a new RUSI report 'Making Information Flow: Instruments and Innovations for Enhancing Financial Intelligence':https://rusi.org/sites/default/files/201608_op_making_information_flow.pdf

[davidbfpo]

An Indian commentary asks whether a "cashless" society will reduce terrorism and found - to my surprise - this:
a “cashless economy” need not be “terror-free”. In November 2014, CNBC conducted a survey of the 10 top “cashless” societies. It found Belgium to be the world’s top cashless society with 93 per cent non-cash consumer payments and 83 per cent debit card use. France was second, then Canada, the UK, Sweden, Australia, Holland, the US, Germany and South Korea. Unfortunately, Belgium and France were also the worst victims of indigenous and trans-border terrorism.Then citing FATF and US reports states:
Detecting terror financing through legal channels is an extremely onerous task, as the US Treasury and FATF reports would indicate.Link:http://indianexpress.com/article/opinion/columns/demonetisation-pm-modi-black-money-terror-funding-corruption-4390492/

[davidbfpo]

Another RUSI report on 'Lone-Actor and Small Cell Terrorist Attacks: A New Front in Counter-Terrorist Finance?' and in summary:
As the threat from lone-actor and small cell terrorism evolves, this paper examines the financing of both disrupted and successful plots since 2000 in Great Britain, France and Australia. These plots often require minimal amounts of funding, making proactive identification through financial means challenging. Nonetheless, this paper highlights a number of key themes that warrant further investigation, showing the potentially disruptive role that financial intelligence can play.Link:https://rusi.org/publication/occasional-papers/lone-actor-and-small-cell-terrorist-attacks-new-front-counter

Now to starting reading it, so may be a comment later.:wry:

[davidbfpo]

Spotted this book last week and might one day get to read it: 'Threat Finance: Dismantling the lifeline of Organized Crime and Terrorism' by Shima D. Keane, published in 2013 by Gower. It is very expensive alas, so a library copy one day.

One review via the publisher I expect is by "Hal" McMaster:
This book provides a lucid education on the often inconvenient realities of serious economic crime and identifies with clinical precision the reasons why it sometimes seems beyond the practical capabilities of the law to deal with it. What makes it so important, however, is Dr Keene's ability to mobilise the difficult thoughts that need to be thought if modern democracy is to survive the corruptive threats of crime and terror and their ability at the more sophisticated levels to exploit the modern accommodations of international finance and cyberspace with apparent impunity. The challenge, so vividly described here, can appear overwhelming; but the lasting influence left by this seminal work is the conviction that it will be more adequately met if some of the current cosy thinking on this subject in relevant fields of influence can be turned on its head.Link to Amazon UK:https://www.amazon.co.uk/Threat-Finance-Disconnecting-Organised-Terrorism/dp/140945309X/ref=sr_1_3?s=books&ie=UTF8&qid=1489413936&sr=1-3&keywords=threat+finance

It is far cheaper via:https://www.amazon.com/Threat-Finance-Disconnecting-Organised-Terrorism/dp/140945309X/ref=sr_1_2?s=books&ie=UTF8&qid=1489414270&sr=1-2&keywords=threat+finance

[davidbfpo]

Professor Peter Neumann, Kings College London ICSR, has a scathing review of CT financing activity in Foreign Affairs 'Don't Follow the Money: The Problem With the War on Terrorist Financing'

Here is one passage:
More than a decade and a half into the war on terrorist funding, policymakers must recognize the drawbacks of their current approach. Financial tools cannot stop lone attackers from driving cars into crowds, nor can they do much when groups such as ISIS hold territory and earn most of their income from within it. Policymakers need to acknowledge that the war on terrorist financing, as it has been conducted since 2001, has often been costly and counterproductive, harming innocent people and companies without significantly constraining terrorist groups’ ability to operate. Unless governments find ways to revolutionize how they share information with the financial sector, most of the current procedures for identifying suspicious transactions will continue to be little more than costly box-ticking exercises.Link:https://www.foreignaffairs.com/articles/2017-06-13/dont-follow-money? (https://www.foreignaffairs.com/articles/2017-06-13/dont-follow-money?cid=soc-tw-rdr)

Quite a few sources cited appear here already.

[davidbfpo]

Encountered a reference to this monograph (82 pgs) this week; it claims to be intelligence-based, using interviews rather than open sources and is not an academic study. The editor, Aimen Deen, is a former AQ jihadist and a short BBC profile in 2015 helps:http://www.bbc.co.uk/news/magazine-31700894

The author(s) explain:
We have divided the study into three themes: theology, history and methodology. Since Jihadists such as al-Qaeda, the Taliban and their supporters consider fundraising for Jihad to be an act of worship just like Jihad itself, then comprehending the theological basis of Jihadist fundraising will add clarity and depth to the understanding of the concept. Historical background will illuminate the path that Jihadist finance took to evolve throughout the years. And the methodology of Jihad fundraising and then the movement of funds across borders will shed light on ingeniously simple methods adopted by Jihadist fundraisers to avoid detection by authorities worldwide.Link:http://www.fived.org/images/files/Holy%20Money.pdf

I asked a SME for an opinion on its value:
Yes, it very much is. Much of the reporting on this subject has been tactical and not very good tactical at that

[davidbfpo]

The link below is to a 2002 House of Commons report on Northern Ireland 'The continuing threat from paramilitary organisations' and the section on financing, even if dated it has value and note was after the 1997 Good Friday Agreement and an end to hostilities.
Link:https://publications.parliament.uk/pa/cm200102/cmselect/cmniaf/978/97806.htm

[davidbfpo]

A report from the global financial crime group FATF and their explanation:
Recruiting members and supporters is crucial to a terrorist organisation's survival. Each terrorist organisation has different recruitment techniques, depending on whether it is a large or small organisation, or a dispersed network of individuals. Using input collected from authorities within the FATF Global Network, this report (http://www.fatf-gafi.org/media/fatf/documents/reports/Financing-Recruitment-for-Terrorism.pdf) increases understanding of terrorist organisations’ funding needs to recruit members and supporters. In some cases, these funding needs are minimal. This report identifies the most common methods of recruitment used by terrorist organisations and terrorist cells, and the costs associated with these different methods and techniques of terrorist recruitment:


Personal needs of the recruiter and the maintenance of basic infrastructure for the recruitment / facilitation network
Production and dissemination of recruitment materials
Payment for goods and services to facilitate the new recruits' early participation in the terrorist organization
Financial incentives provided directly to recruits or for the hiring of mercenaries or civil experts

This report sheds a light on how terrorist organisations fund the recruitment of new members and supporters, from fast food restaurant ‘headquarters’ to financial incentives for new recruits, and will help authorities detect and disrupt these recruitment activities.
Link:http://www.fatf-gafi.org/publications/methodsandtrends/documents/financing-recruitment-terrorist-purposes.html

[davidbfpo]

A speech following up on Professor Neumanns published views. Here are two selected passages:
To be more specific, I am convinced that, when it comes to countering terrorist finance, there has been an excessive, an exaggerated, an over the top focus on the formal financial sector.
In fact, the single most successful blow to ISIS’s finances was something that had little to do with what people typically associate with countering terrorist finance. It was an American military air strike against a cash depot of ISIS in Iraq. In a single day in January 2016, it destroyed an estimated 50 million dollars — nearly the same amount that had been frozen and confiscated in 15 years of countering terrorist finance through the international financial system.



Link:http://icsr.info/2018/04/beyond-banking-professor-neumanns-opening-keynote-address-no-money-terror-summit-paris/

[AdamG]

A young New York woman pleaded guilty Monday to supporting the Islamic terror group ISIS with a scam involving bank fraud, bitcoin and other cryptocurrencies.
Zoobia Shahnaz, 27, of Brentwood, Long Island, admitted to wiring more than $150,000 to individuals and shell entities that were fronts for ISIS in Pakistan, China and Turkey in 2017.
Shahnaz engaged in a scheme to scam Chase Bank, TD Bank, American Express and Discover by fraudulently obtaining six credit cards, according to another court filing. She then bought more than $62,703 in Bitcoin and other cryptocurrencies, and converted the currencies to cash.

https://www.cnbc.com/2018/11/26/new-york-woman-pleads-guilty-to-using-bitcoin-to-launder-money-for-isis.html

[davidbfpo]

Discovered today via a "lurker" a November 2017 submission to the Senate Judiciary Committee by an ex-US financial crimes investigator, which has some stunning quotes and this response from a contact immersed in this area:
This should be compulsory reading for everyone engaged in law enforcement!
Link:https://www.judiciary.senate.gov/imo/media/doc/Cassara%20Testimony.pdf
It is seventeen pgs. long and is an easy read.

[davidbfpo]

A new RUSI paper and not opened here. The link has a short video and a summary, plus a link to the paper.
Link:https://rusi.org/publication/occasional-papers/sharper-image-advancing-risk-based-response-terrorist-financing