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Fighting terrorist finance - Issues, Impacts and Challenges

Kjeller, Norway: Forsvarets Forskningsinstitutt. FFI/Rapport, 2005

Authors:

Gjermund Haslerud, Bent Sofus Tranøy 

Abstract

The fight against the financing of terrorism has been at the top of the anti-terrorist agenda since the attacks of 9/11. The effort has involved both strengthening existing (primarily) money laundering legislation and a new approach based on lists of designated individuals and organizations. The report is divided into four main parts, The first two sections deal with the phenomenon of terrorist finance, while the next two deal with efforts to combat it. In section two conceptual and theoretical issues are discussed. A broad definition of terrorist finance is introduced and the dynamic nature of the phenomenon is outlined. Experience and theory both underscore an expectation that as countermeasures evolve so do methods of terrorist finance. The report then maps and discusses the many mechanisms whereby terrorists fund their activities and reviews the multilevel and multilateral efforts to fight the financing of terrorism, which have been introduced since 9/11. The magnitude of these measures and the support they have received have been such that one could argue that a new international financial regulations regime has emerged. Finally, the report analyses the impact of the counter terrorist finance (CTF) regime as it stands today, both in terms of effectiveness and legitimacy. It is impossible to gauge the exact impact but Al-Qaeda appears to have suffered due to a less permissive environment. Unresolved issues tied to the adaptability of terrorist groups and the resulting need for innovation in combating terrorist financing remain. Addressing these issues, means that countermeasures have to take onboard challenges of effectiveness and legitimacy.