Chapter 1 What Is the Current Situation Concerning Counter-terrorism Financing?

This chapter not only explains the purpose and modus operandi of terrorism, for it also provides consideration of the thorny issue of defining terrorism as well as current definitions of TF. Actors responsible for preventing terrorism- financing will also be introduced. In addition, this chapter will offer a list of all the existing international tools and regulations that will be reviewed in Chapter 7, criticized in Chapter 8 and utilized to build up the new Counter- terrorism Compliance model in Chapter 10.

A Terrorism’s Purpose and Modus Operandi

Terrorism represents a daily threat at the international level. Whilst hijackings, bombings, and assassinations worldwide may appear to be isolated events, such terrorism is, in fact, an instrument of statecraft, domination, oppression, revolution or rebellion that relies on violence as a way to promote social, politi- cal and religious change.1 Terrorist organizations target and attack innocent people in order to create a situation of fear within a group or a population. Far from being random violence, its advocates promote a violent strategy centered on targeting specific victims. The psychological impact of terrorism is often much more serious than the related physical consequences. Terrorists use pro- paganda through action and media exposure to increase the number of their followers and their influence. In general, the purpose of terrorist attacks is to create a widespread feeling of vulnerability and to deliver a public statement aimed at provoking anger or revenge, while conveying a message to people who are not directly attacked. Different types of terrorism include domestic, international, as well as non-state terrorism, covering settings such as: mari- time terrorism, aircraft terrorism, economic terrorism, cyberterrorism and Weapon of Mass Destruction (wmd) terrorism. Terrorism does not necessarily require big amounts of money to finance the illicit actions, but necessitates organization and a specific hierarchical and

1 Kerby Anderson, Terrorism, Probe Ministries, 1992, http://www.leaderu.com/orgs/probe/ docs/terror.html.

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Current Situation Concerning Counter-Terrorism Financing 9 task specific structure along with good secure internal communication be- tween actors, which often makes them hard to detect by national and interna- tional authorities. While the 9/11 terrorist attack on the United States World Trade Center cost between $400,000 and $500,000, of which approximately $300,000 was deposited into U.S. bank accounts of the 19 hijackers, the cia estimates that prior to 9/11 it cost Al-Qaida about $30 million per year to sustain its activities.2 Expenses included funding operations, maintaining its training and military equipment, contributing to the Taliban and their high-level offi- cials as well as to related terrorist organizations. The Bali, Madrid and London attacks cost significantly less, i.e. the Bali nightclub attack cost about $50,000, the train bombing in Madrid in 2004 is believed to have cost between $10,000 and $15,000 and the London attacks on the tube system about $2,000.3 Terror- ists have begun to rely increasingly on cash, to avoid a paper trail, for instance, the 2005 London attacks were funded entirely in this way. Cyberterrorism principally requires specific knowledge and little or no source of financing compared to Maritime and aircraft terrorism, or acquiring wmds for terrorism purposes. After the successes of recent terrorist attacks, terrorists could be tempted to use wmd as instruments of aggression, which would lead to mass murder. wmd terrorism requires huge sums of money to be donated or schemed to finance the necessary materials to build the instrument of terror. Whilst there has been no nuclear/radiological incident and limited bio-chemical incidents known to date, wmd terrorism is still considered by international regulators to be a major concern. A new kind of terrorism started being introduced in Europe in the years 2013–2016: isolated religious fundamentalist actors deciding to act on their own, in the name of a foreign leader, with a budget of €10,000 to €30,000, ac- cording to Michel Sapin,4 French Finance Minister.5 This new type of “isolat- ed,” “low-cost” terrorism needs to be strongly considered in the establishment of a new ctf tool, as these terrorists can derive their money from delinquency and organized crime to finance their activities in the name of a terrorist cause.

2 John Roth et al., National Commission on Terrorist Attacks Upon the United States, Mono- graph on Terrorist Financing, Staff Report to the Commission, 2004, available from https://gov- info.library.unt.edu/911/staff_statements/911_TerrFin_Monograph.pdf. 3 Eben Kaplan, Council on Foreign Relations, Tracking Down Terrorist Financing, 4 April 2006, available from https://www.cfr.org/backgrounder/tracking-down-terrorist-financing. 4 Michel Sapin’s statement, when he was France’s Finance Minister in 2015. 5 John Irish, France to Press U.S. on “Low-Cost” Terror Financing, Reuters, 17 December 2015, http://www.reuters.com/article/us-mideast-crisis-financing-france-idUSKBN0U02MZ2015 1217.