Combating the financing of terrorism: A never-ending battle

TERRORISM needs funding. Preventing and disrupting this is key to limiting the capability of terrorist groups to prepare or carry out attacks. In the recent twin blasts that killed at least 84 people and wounded more than 280 people in Iran, the ISIS armed group claimed responsibility. It was the deadliest attack to target Iran since the 1979 Islamic Revolution.

The Islamic State, al-Qaida and Hezbollah remain the top threats to the US financial system and the safety of the United States, the Association of Certified Anti-Money Laundering Specialists (ACAMS) said in a report. Domestic extremism, meanwhile, poses a new and serious risk to the people of the US and its financial institutions.

The intergovernmental Financial Action Task Force (FATF) was established in 1989 to set standards and promote the effective implementation of legal, regulatory, and operational measures against money laundering, terrorist financing and other related threats to the international financial system’s integrity. The FATF continuously monitors how criminals and terrorists raise, use and move funds and continues its work with the support of the G20.

Over the past 20 years, meanwhile, the International Monetary Fund has helped shape policies anti-money laundering and combating the financing of terrorism (AML/CFT) globally and within its members’ national frameworks.

The Egmont Group of Financial Intelligence Units (The Egmont Group) also adds value to members by improving stakeholder understanding of money laundering/terrorist financing risks and draws upon operational experience to inform policy considerations, including AML/CFT implementation and reforms.

The United Nations Security Council’s Counter-Terrorism Committee (CTC), lastly, was established via a council resolution adopted unanimously in 2001 in the wake of the 9/11 terrorist attacks in the US. The CTC was tasked with monitoring the implementation of said resolution, which requires countries to implement measures to enhance their legal and institutional ability to counter terrorist activities.

For many years, these organizations and other stakeholders have been working together to combat terrorism financing. However, terrorism remains a critical global threat and could worsen in the near future. Based on an Australian government report, the terrorism threat in Southeast Asia is increasing because of links between local extremists and terrorist groups such as ISIL (ISIS) in the southern Philippines. By the same token, as technology evolves, terrorist groups can exploit vulnerabilities posed by increasing anonymity on the internet.

Measures to combat terrorist financing need to be implemented in all jurisdictions around the world. To prevent and disrupt the financing of terrorism, governments, in partnership with the private sector, should not allow safe havens for terrorists and those who finance them.

The FATF’s new strategy sets clear objectives: cut off the financing of terrorism, particularly for serious threats such as ISIL and Al-Qaeda; reinforce safeguards that will deny terrorists access to the financial system and prevent them from exploiting vulnerable countries as safe havens; and ensure that financial intelligence is effectively used.

It also lays out critical steps to execute the new strategy:

– improve understanding of