By MAYA WHITNEY, with BROOKS TIGNER
BRUSSELS – Like other organisations with a business “model”, terrorist groups rely on steady streams of money to carry out their activities. But it is getting more difficult for them to source their money surreptitiously, particularly through official channels such as the international banking system. Indeed, whereas they could once hide behind ostensibly charitable organisations and their bank accounts, those days are over as governments and their intelligence agencies work with banks to monitor and track down suspicious sources and movements of funding.
As a result, terrorists are coming up with far more creative, if simple, ways to fund their malevolent plans. Some of the more clever techniques used by terrorists in Europe to finance their deadly attacks have involved false insurance claims and revenues from the street sales of counterfeit goods, from cigarettes to shoes. These and other techniques were the focus of debate among EU officials and anti-counterfeit professionals here on 11 April during a conference on smuggling, counterfeiting and terrorism financing conference organised by the Robert Schuman Foundation.
Terrorist groups are casting their net wide for funding possibilities, Baltasar Barzón, former Spanish investigating magistrate, told the meeting. Pointing to his country’s problem with extremist groups, he said one of the latter deliberately “crashed their cars and collected the money from their insurance companies in order to purchase weapons for their extremist activities”.
Elsewhere, participants learned that the jihadist extremists who slaughtered members of the Paris-based Charlie Hebdo magazine in January 2015 did so with a daunting array of weapons funded by sales of counterfeit sneakers. It was such preliminary but below-the-radar crime that saw the assailants booted off the French police’s watch list of extremists to keep an eye on. Such a technique, coupled with small-scale money laundering, only needs to glean small amounts of money to get the tools required.
One difficulty with assessing the counterfeit-based financial route to terrorism is that too many governments around the globe consider their problems with counterfeiting as petty crime rather than an activity potentially connected with terrorism. Moreover, many countries wouldn’t have the jail space to deal with the numbers of people involved in the purchasing or selling of counterfeit products. Counterfeiting rings can be very large, with those selling on the ground but minor pawns in a much wider structure whose upper echelons have the ties that counterterrorism officials seek.
Cryptocurrencies are another vector for counter-terrorism actors, said conference officials who pointed to Hezbollah’s use of Bitcoin to finance their activities in Lebanon. Clamping down on crypto-currency technology’s illicit use is difficult because legislation doesn’t move fast enough. By the time the laws or new law enforcement authorisations are in place, terrorist organisations have seen the change coming and found new forms of financing, said the officials.
The help coordinate efforts against the problem of terrorist financing the European Commission is creating a new “Financial Accountability Taskforce” to combat money laundering and transfer of funds to terrorist groups, according to Pedro Serrano, deputy secretary general of the European External Action Service, the EU’s foreign policy wing. To launch in summer 2018, the task force will develop new standards and promote stronger methods of criminal accountability, asset freezing and ways to limit criminal groups’ monetary capabilities.
It will also create a new database of criminal information cells to collect information via “extraterritorial” frameworks, though what the latter exactly entails and how it will work remains to be seen.
Serrano conceded that cracking down on anti-money laundering can accomplish only so much since there are so many low-resource activities that escape attention. That goes both for terrorist activities within the EU, as well as foreign fighters who labour for extremist groups in the Middle East.