Combating the Financing of Terrorism

Combating the financing of terrorism refers to the actions taken that fight the means and methods terrorist organizations use for financing their activities. These actions are initiated and implemented by government and international agencies. The sources of financing can be any legal or illegal activities.

Combating and disrupting the sources and activities of financing helps create an unfavorable environment for the growth of unlawful activities. This brings peace, harmony, social and economic growth, and political and economic stability. People are prevented from being part of it, and this helps reduce crimes and make the world a better place. 

Combating the financing of terrorism are the measures taken by various governments and international organizations to prevent the funding for terrorism. The financing of terrorism involves the collection and provision of funds (including solicitation) to be used for acts that support terrorism. This includes direct or indirect, willingly or unwillingly collected funds with the knowledge or intention that they would be used fully or partially for the purpose.

Unlawful organizations often use them for carrying on their operations, including acquiring fake documents, weapons etc. They use the funds for propaganda and recruitment of new members, funds are needed for training the recruits also. Additionally, the funds are also used to provide salaries to the existing members, compensating the families of lost members, etc. Funds are also used to mask these activities under the pretext of running institutions that provide social services to gain support.

Major sources include Misuse of Non-profit organizations, private donations, proceeds from criminal activity, exploitation of natural resources etc. Governments are actively trying to cut down and eliminate funding chances to prevent the spreading of crimes. Combating financing activities helps stop the spread of activities and recruiting and training members. This not only saves lives, but it also helps bring peace and stability and benefits socially and economically. It helps prevent valuable, skillful minds from being brainwashed.

There are several initiatives taken by national and international agencies to combat such financing activities, and some of them are as follows: 

#1 - The Financial Action Task Force (FATF)

FATF is an intergovernmental organization developed under the initiative of G7 in 1989. it is an organization that deals with anti-money laundering and combating the financing of terrorism. The body sets standards to help prevent illegal activities. It monitors the activities of criminals and understands how they raise, use and move the acquired funds. FATF publishes reports on the new ways the terrorists find funding and creates awareness so that mitigating measures can be taken. The body has classified countries under gray and black lists for easy monitoring of anti-money laundering and combating the financing of terrorism. 

#2 - United Nations- Office of Counter-Terrorism

The UNSC, or the UN Security Council, has rules in place for CBT and adds additional resolutions to address new methods of CBT under Chapter VII. it has an exclusive resolution, 2462, that was introduced in 2019 that talks and deals with the flow of funds to unlawful groups.  

#3 - United Nations Office on Drugs and Crime (UNODC)

The UNODC, has launched a global program for preventing and countering the act of terrorism. The program is designed to run from 2022 to 2017. One of its main objectives is to develop accountable and robust criminal justice institutions to counter terrorism, which also will curb financing activities. 

Let us look into some examples to understand the concept better.  

Example #1

Imagine there is a remote locality in the U.S. called XYZ that is doubtful of carrying on illegal trade activities, including smuggling goods and selling drugs. Under such circumstances, the government will monitor the area and routes around the area carefully and investigate further. Suppose the government had found evidence that there has been an establishment of a link with regard to the financing of terrorism. In such cases, the government will first stop the people from the XYZ locality trying to smuggle goods. This probably happens via the road and waterways; the government will now enhance the security around the routes leading to the locality.   

This prevents the criminals not getting access to the goods they want. Additionally, the government also employs student campaigns to tackle the drug issue and decided to freeze accounts of all institutions in the area until further notice. When security has been enhanced in routes of entry and exit, the sale of unwanted drugs also reduces, if not eliminated. These activities are those that are employed to combat terrorism. It creates an environment that does not allow the gathering of funds or transferring them to other parties for the execution of terrorism.  

Example #2 - A Real-Life Example

Governments across the world have rules in place for CFT. Singapore is one such country that has recently updated its measures. It has now tightened the rules around casinos. The country demands a due diligence test to be carried out if there are deposits made to a customer for more than $2950 or SDG 4000. The country said in a press meeting that the actions were to align with the FATF's standards. 

There are numerous benefits associated with combating the financing for such activities.  

• It is an attempt to reduce the crimes and curb their spread. This helps in restoring the peace in a region and prevents countries from becoming a conducive environment for the spread of these activities.    
• Cutting off their funds makes it difficult for them to plan, gather, organize and execute attacks.  
• It prevents abuse of the national laws of a place and prevents misuse of the financial system in the country.   
• It ensures public safety. Citizens are protected and their lives are not under threat.   
• It prevents exploitation of vulnerable sections of the population.  
• It prevents human capital, skills and talent from going to waste by becoming part of such organizations.   
• It prevents the diversion of funds used for unlawful activities toward the economic empowerment of people in need and the nation's development.  
• It prevents natural resources from being exploited and uses them for the development of a country instead.   
• It promotes peace and stability. Furthermore, they help in maintaining peaceful international relations.