Complex terror attacks like that of 9/11 require massive funding and years of planning, but the newly ascendant IS style prevalent in the Middle East encourages individual initiative, as well. These new trends in terrorist financing add new angles to the role of combating terror through Compliance.
Consider, for example, that the 9/11 Commission estimated the cost of that terror operation to be near half a million dollars. In the last decade, however, extremists have developed new terror networks and have shifted tactics and used technology and regional repression to draw supporters from all over the globe, according to Dr. Matthew Levitt of the Washington Institute of Near East Policy.
Levitt, in a speech in May to members of the Canadian Parliament, described three examples of the broader trends in terror financing. He included self-financing by individuals seeking to join terrorist causes, abuse of charitable causes, and “backdoor banking.”
He described the power of self-financing small operations. Levitt cited the example of one of the Paris attackers in January as taking out a personal loan for 6,000 euros. And Canadians seeking to travel to Syria to join IS often gain money by working in the Alberta oil fields, which offer well-paying jobs with limited expertise. Petty crime has also become a source for self-funded travel and small terror operations.
Levitt noted too the exploitation of charities to fund ISIS and similar terror groups. He noted that the humanitarian crises in Syria and elsewhere provide a heart-rending front for soliciting contributions worldwide. According to Levitt, some charities are entirely false fronts, but other may become unwitting contributors through corrupt employees or related schemes. Moreover, the advent of internet fundraising and the ease of transfer of funds via prepaid cards and similar methods make this avenue especially appealing.
Regarding the prevalence of “backdoor banking,” Levitt noted that the reliance by terror groups like IS on crime and local ‘taxes’ circumvent many anti-terror efforts by formal financial institutions. He noted that some banks active in the region actively file SARs and that that helps gain insight into terror financing, but he noted that banks in the IS-held regions in Syria have no requirements imposed by the state. There are also questions about the handling of the sale of oil and the financial chain through which these transactions are handled.
Levitt noted too that “backdoor banking” includes the skimming of salary paid to public employees in Iraq who may pick up their state-funded checks in Kirkuk but when they go home to Mosul, for example, they are ‘taxed’ by ISIS. In this scenario, Baghdad is indirectly funding the enemy they are fighting against. Accessing foreign- held funds through ATMs, wire transfers, and foreign money remitters has also been reported by FAFT analysts, according to Levitt.
Levitt urges state leaders and anti-terror financing experts to analyze their counter-terror financing efforts with these types of new methods in mind.
