The challenge of stopping terrorist financing

A common refrain to many issues is ‘follow the money’.  Whether we are talking about organised crime or campaign irregularities or other social ills it is believed that if you can establish who is paying who you can devise ways to interdict that cash flow and hamper the activities that it is supporting.  If successful, this indeed is a good thing, no?

In this regard we hear a lot about ‘terrorist financing’.  The term tends to be used quite loosely and broadly to refer to money that terrorist groups earn through a variety of actions (see below) as well as money that they are given – or have earmarked for them – by supporters and wellwishers.

Today there is a lot of effort expended to identify and neutralise this money.  In late May, ministers from 80 countries and nearly 500 experts gathered in Paris  for a conference on combating the financing of terror groups such as Islamic State and al-Qaeda.   In the final declaration to that meeting the participants pledged to “fully criminalize” terror financing through effective and proportionate sanctions “even in the absence of a link to a specific terrorist act.”  On a smaller scale, on May 10 antiterror police carried out raids across Italy, arresting 14 people they accuse of helping fund violent extremists in Syria, and on May 18 a man who has lived in Sweden since 2012 was arrested in Denmark on Friday, accused of sending money to a Syrian terrorist group.  All  in all, well done well done!

But is it enough to defeat terrorism?  Probably not.

Organisations such as Islamic State were very good at having money flow in and not just from its sponsors and wannabes from the four corners of the world (literally!).  IS was able to use oil flows, drugs, smuggled antiquities and even tax collection under their so-called ‘Caliphate’ to help them in their campaign of terror.  Similarly things could be said about the Taliban/opium link in Afghanistan.  So yes, targeting these kinds of financial earnings can make a difference and everything possible and feasible should be done to stop these groups from getting their hands on cash.

And yet there is a completely different type of terrorism, and one that seems to be on the rise, at least in the West, which is both immune from, and not dependent on, large cash flows.  I am referring here of course to the low-scale, small number cells that carry out vehicular, small arms or knife attacks as we have seen in Berlin, Stockholm, Madrid, Manchester, Edmonton and Orlando.  Islamist extremists in these cities and others have succeeded in executing attacks that have killed and maimed hundreds without any need to receive funding.  These unsophisticated methods (it does not take a rocket scientist to drive a car into a crowd or stab people indiscriminately after all) are not only very hard to stop from a security intelligence/law enforcement perspective but it is probable that counter terrorism financing tools will have similar useless effect.  As an aside, in my years at CSIS all the attacks that we and the RCMP prevented, as well as the few that went ahead, had for all intents and purposes no ‘terrorist financing’ aspect.  You cannot dry up a money flow that does not exist.

My friend and terrorist scholar colleague Peter Neumann made similar points at the Paris summit and his opening remarks are worth reading.  We have to be realistic at what we can stop and what we cannot.  This is not to undermine the very important efforts that are underway in a lot of countries to locate and freeze substantial amounts of money.  These initiatives should continue and receive the necessary backing.

What worries me is what always worries me: the notion that there is a simple answer to terrorism. I have seen, heard or read on countless occasions that if only we were to apply this paradigm, or use this model, that we would see the back end of violent extremism.  The reality is that a complex, constantly shifting phenomenon such as terrrosm requires a complex, constantly shifting response.  A one-size-fits-all solution is not in the cards.

In the end my hat is off to those who work to stop terrorism financing. They deserve our congratulations.  At the same time we need to recognise that this approach will not make the problem go away and our  officials need to stop issuing bland platitudes to try to convince us otherwise.

By Phil Gurski

Phil Gurski is the President and CEO of Borealis Threat and Risk Consulting Ltd. Phil is a 32-year veteran of CSE and CSIS and the author of six books on terrorism.

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