Financing Of Terrorism Essay ⋆ Political Science Essay Examples ⋆ EssayEmpire

Terrorism financing, or reverse money laundering, is the process of raising and transferring funds, from legitimate or dubious sources, for future criminal activity. Though there are similarities between money laundering and terrorism financing, there are also notable differences. Terrorists will minimize their use of regulated financial industries because of their need for anonymity, or in some cases because they live and operate in states where the financial system is underdeveloped. Sources of terror ism financing may be entirely legitimate, such as money obtained through regular business activities or charitable donations. Terrorists also may use couriers or send money through, often poorly regulated, remittance systems. In addition, there have been reports of cooperation between organized crime groups and terrorist organizations, especially in the drug trade. Terrorists have been known to raise money through the trade in gemstones, and there has been indication that ransom money paid to pirates may have been transferred to terrorist organizations.

The events of September 11, 2001, brought the issue of terrorism financing to the forefront of the political agenda. The international community had, however, already started to address the issue. The United Nations General Assembly adopted the Convention on the Suppression of the Financing of Terrorism in 1999. Shortly after the September 11 attacks, U.S. president George W. Bush launched the war on terror by signing an executive order blocking the assets of listed individuals and terrorist groups. The U.S. Congress then adopted the USA PATRIOT Act; title 3 specifically targets illicit finance. Internationally, the Financial Action Task Force’s mandate was expanded to cover both money laundering and terrorism financing. States around the world subsequently amended their legislation on illicit finance to include terrorism financing. Conventional wisdom holds that following the money trail enhances security by allowing authorities to identify and keep track of suspect individuals and of their networks.

The fight against terrorism financing has not been immune to criticism. Committing an act of terror is not necessarily expensive, and there are no guarantees that tackling terrorism financing is actually an effective way to combat terrorism. Scholars also note that financing of terror is ingrained in political and geostrategic struggles, as is the case, for instance, with national liberation movements and state-sponsored terrorism. The identification of terrorists by public authorities, or financial services sector firms, is also subject to mistakes leading to potential abuse. Some critics maintain that the fight against terrorism financing has been used to marginalize minority groups, such as Muslims, and developing states, where terrorists are thought to hide, through increased surveillance of the financial system.

Bibliography:

Financial Action Task Force, fatf.org.
Napoleoni, Loretta. Terror Incorporated: Tracing the Dollars Behind the Terror Networks. New York: Seven Stories Press, 2003.
S. Department of the Treasury, www.ustreas.gov.
Warde, Ibrahim. The Price of Fear: The Truth Behind the Financial War on Terror. Berkeley: University of California Press, 2007.

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