Terrorism financing

Terrorism financing 2017-05-23T14:19:24+00:00

Terrorists require money to operate. Without funding, they cannot purchase weapons, equipment, supplies, or services. The source of terrorist funds may be licit or illicit, and funding often takes the form of multiple small donations, rather than one large sum of money. Terrorist groups may be directly or indirectly linked to organized criminal groups and may engage in criminal activities, including drugs or arms trafficking, extortion, and kidnapping for ransom. Terrorism financing is a global phenomenon that not only threatens Member States’ security, but can also undermine economic development and financial market stability. It is therefore of paramount importance to stem the flow of funds to terrorists.

Building on the International Convention for the Suppression of the Financing of Terrorism (1999), Security Council resolution 1373 (2001), calls on States to prevent and suppress the financing of terrorism, inter alia, by criminalizing the collection and provision of funds for terrorist purposes, and urges them to set up effective mechanisms to freeze funds and other financial assets of persons involved in or associated with terrorism, as well as to prevent those funds from being made available to terrorists. The Financial Action Task Force (FATF) has also developed detailed recommendations on countering terrorism financing. The significant sums raised by terrorist organizations such as the Islamic State in Iraq and the Levant (ISIL, also known as Da’esh) and the funding of foreign terrorist fighters (FTFs) underscore the importance of targeting terrorist resources. In its resolution 2178 (2014), the Security Council urges Member States to disrupt terrorist-financing activities linked to FTFs and to criminalize the financing of FTF travel.

The freezing of terrorist assets is a highly effective way for Member States to stem the flow of funds. It can also act as a deterrent to further engagement in terrorist activity. However, in conducting assessments on behalf of the Counter-Terrorism Committee, the Counter-Terrorism Committee Executive Directorate (CTED) has become aware of the many challenges faced by Member States in implementing effective freezing mechanisms. As a facilitator of technical assistance delivery, CTED organizes expert workshops around the world to help States establish effective freezing mechanisms that are consistent with international standards and obligations, including relevant human rights obligations. CTED also helps States to counter the misuse of non-profit organizations (NPOs) and alternative remittance systems (ARS) for terrorist-financing purposes and to detect and prevent illicit cross-border transportation of currency (a significant problem in cash-based economies).

In order to tackle terrorism financing effectively, it is essential that Member States cooperate regionally and internationally, including through the exchange of operational information by relevant entities, especially national financial intelligence units (FIUs). It is also essential that investigation of terrorism cases at the national level include the terrorist-financing element.

In carrying out its tasks, CTED works closely with relevant United Nations entities and coordinates its activities with those of external partners, including FATF and the FATF-Style Regional Bodies (FSRBs). Within the framework of the Counter-Terrorism Implementation Task Force (CTITF), CTED is a member of the Working Group on Countering the Financing of Terrorism.

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