Combating Terrorist Financing (CTF) is a major component of counterterrorism. One method of deterring and someday meeting the objective of defeating terrorism is to expand the instruments to halt or prevent avenues that undermine terrorist financing. Unknown to most is the existence of a global sanctions’ regime that is designed to upend terrorist financing. Separately, U.S. presidents have implemented multiple policies to prevent terrorists from gaining access to funds to enhance recruitment, plan operations, and operate their organizations. This post explores some of measures (diplomatic agreements and United Nations organizations and resolutions) that serve as the “critical nodes” of the global sanctions’ regime. Second, the post explores some of the measures implemented by U.S. presidents combat the ever-evolving necessity of targeting terrorist financing.
The Global Terrorist Financing Sanctions Regime
To place the global sanctions regime in context, this post begins with brief examination of some of the most recent regional efforts to combat terrorist financing. The examination explores the measures introduced by the African Union (AU), the European Union (EU), and concludes with the United Nations (UN) measures to combat terrorist financing.
It is important to note the African Union (AU) set in motion a series of mandates to combat terrorist financing. For example, the AU, during a meeting on April 9, 2018, convened a two-day conference to address “Combatting Terrorist Financing in Africa.”
The AU objectives consisted of identifying “the current and evolving modus operandi, and channels used by terrorists to collect, generate and move funds.”[1] Additionally, participants evaluated “the effectiveness of international, regional, and national instruments (cash management and control of resources and payment levels) open to African countries for combating terrorism financing, promote enhanced cooperation and collaboration between national, regional and international stakeholders.”[2]
The attendees in the meeting include senior members of states in the region responsible for addressing terrorist financing. In addition, the European Union, and other regional entities, along with United Nations representative agencies, were on hand to provide input on measures to combat terrorist financing.
As subnational terrorist groups continued to expand in West and Central Africa efforts are well underway to address deficiencies in the methods to combat terrorism in these areas of the continent. The report recognizes that groups like Al Qaeda, Al Qaeda in the Islamic Maghreb (AQIM), Ansar Dine, Boko Haram, and the Macina Liberation Front (FLM), and other terrorist groups have repeatedly taken advantage of ungoverned spaces, weak governance, and poor militaries in the regions to advance terrorist financing across the porous borders.
Previously, the Financial Action Task Force (FATF) report on combatting terrorist financing noted attempts “to address knowledge gaps about how terrorist groups raise, move and use funds in West and Central Africa, the challenges faced by the public and private sectors in detecting [terrorist financing] TF as well as limited examples of complex financial analysis on the topic make it difficult to present a full picture of TF methodologies in the region.”[3]
While leaders of these states met to address the evolving threat of terrorist financing, as the pace or growth of Islamic extremism expands and new groups continue to explode, measures to combat terrorism lag behind the expansion of terrorism in the regions.
The European Union (EU)
The EU has been engaged in the fight to combat terrorist financing for an extended period. EU officials have regularly acknowledged that one of their core counterterrorism missions is the on-going struggle to implement measures to combat terrorist financing.
The European Agenda on Security provides for measures that assist in combating terrorist financing. More specifically, the EU agenda on security “highlights the links with organized crime, feeding terrorism through channels like the supply of weapons, proceeds from drug smuggling, and the infiltration of financial markets.”[4]
In 2016, the EU adopted an expansive Action plan on strengthening the fight against terrorist financing. The plan’s objective calls for “detecting and preventing the movement of funds and other assets; helping law enforcement trace financial ; and disrupting the sources of revenue.”[5]
The United Nation (UN) And Counter Terrorist Financing
There have been a host of UN efforts to combat terrorist financing. Some examples include and UNSC Resolution 2133 (2014) and UNSC Resolution 2178 (2014). In 2018, the UN implemented in a new project designed to push for a comprehensive effort to counter terrorist financing.
The United Nations Counterterrorism Center (UNCCT) Countering the Financing of Terrorism (CFT) Project adopted and implemented “a decree in Tunisia that allowed the country to designate individuals and entities connected to terrorism.”[6] Second, the UNCCT assisted in the development of “the Counter-Financing of Terrorism Regional Operational Plan for the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG).”[7] Third, the UNCCT offered workshops for member states to engage in capacity building “on a variety of topics to enhance the capacity of national authorities to improve their work on suppressing the financing of terrorism.”[8]
At another level, another UN organization, The Office of Counterterrorism is working with their partners to strengthen “their capacity to meet interested States’ requests for technical assistance in the area of countering terrorist financing.”[9] Some of the areas of requested technical assistance include sharing financial intelligence those issues identified by the Financial Action Task Force (FATF).
Consistent with their efforts, the United Nations offered a host of avenues whereby member states obtain further knowledge and opportunities to learn about methods to combat terrorism financing. Covering two days, April 25 and 26 in 2018, the UN Counterterrorism Committee Executive Directorate (CTED) held a conference entitled “No Money For Terror.” Eighty member states, along with regional and international agencies, gathered to review and evaluate “new terrorism-financing trends and methods.”[10]
During the Paris gathering members heard updated on the 1267 Sanctions Committee and the efforts to confront the financial assets of Al Qaeda and the Islamic State. At the conclusion of the conference, participants agreed to a declaration that defined several priority actions to include “preventing the misuse of non-profit organizations (NPO) for terrorism-financing purposes, and promoting cooperation between Government and the private sector, involving social media, to prevent terrorists from raising and transferring funds online.”[11]
The efforts of the United Nations, and their multiple agencies, demonstrate the ever-expanding role of the global sanctions regime to combat terrorism. The regime has incessantly worked to include member states on the new trends in combating terrorist financing. Through capacity building the regime provides opportunities to address member deficiencies in certain aspects of the measures to combat terrorist financing and through workshops they hope to expand member awareness to implement UN objectives through assistance from regional organizations or independent from the international body or regional organizations.
U.S. Presidents And Combating Terrorist Financing
As with most aspects of foreign policy there is little continuity between U.S. presidents on which measures should be implemented to combat terrorist financing. Still, it should be noted, American presidents have implemented credible and sustained measures to combat terrorist financing. The information below provides a brief overview of some but certainly not all of the executive actions that have been implemented combat terrorist finances.
George W. Bush
The heinous attacks on September 11, 2001 accelerated the need to advance measure to combat terrorist financing. This aspect of counterterrorism does not garner much attention from the media. However, while President W. Bush, as noted in a previous post, created a vast counterterrorism infrastructure, scant attention is given to the administration’s efforts to combat terrorist financing.
The administrations central measure to combat terrorist finances was focus attention to disrupt the financial means of Al Qaeda, the terrorist group behind the attacks on September 11, 2001. One of President Bush’s initial actions is the announcement of Executive Order 13224 which was signed on September 23, 2001. The executive order is designed to impede terrorist financing which is “part of a larger effort to lead the international effort to bring a halt to the evil of terrorist activity.”[12]
One day later, on September 24, 2001, the president issued this statement: We will starve the terrorists of funding, turn them against each other, rout them out of their safe hiding places, and bring them to justice.”[13]
President Bush created three organizations whose tasks proved significant in the quest to combat terrorist financing. The organizations are the Foreign Terrorist Asset Tracking Center (FTAT), Operation Green Quest, and Terrorist Financing Task Force. The Department of State argues “These new organizations will help facilitate information sharing between intelligence and law enforcement agencies and encourage other countries to identify, disrupt, and defeat terrorist financing networks.”[14]
Barack Obama
The Obama administration’s combating terrorist financing policies involved three objectives. Those objectives include: “(1) preventing kidnappings, (2) reducing the incentive to take hostages by encouraging governments to refrain from making concessions to terrorists, and (3) denying terrorist kidnappers the benefits of their crime by working with international partners to locate, arrest and prosecute hostage takers and locate, freeze, and recover their assets.”[15]
The Obama administration created a corollary objective, which called for targeting drug trafficking.[16] As in known, Hezbollah and the Taliban, for example, make extensive use of the drug trade to fund their operations and sustain their organizations. To curb the drug trade, the Obama administration relied on U.S. law enforcement to target terrorist organizations. To accomplish this task, law enforcement detained and subsequently “charged [them] with providing material support to terrorist groups.”[17]
President Obama authorized Operation Tidal Wave II to destroy the Islamic State’s ability to obtain finances to operate their terrorist organization. Nearly 50 percent of the Islamic State’s financial resources are linked to illicit oil generated revenues.
In the military operation “U.S. fighter jets and gunships … destroyed 283 ISIS oil tankers in Syria as part of efforts to cripple the terror group’s income streams.”[18] The air strikes targeted and destroyed the Islamic States vast distribution chain which included “trucks, wellheads, pumps and collection points.”[19] On the significance of the strikes, Pentagon Army Colonel Steve Warren asserted, “This was not a piecemeal execution; this was a sudden strike. This was a tidal wave that swept across these oil fields and it really crippled them.”[20] The operation is significant for another reason: an extended military operation illustrated that combatting terrorist financing can be accomplished with tremendous speed.
Donald Trump
President Donald Trump used his opening foreign trip to announce and implement a new major development in counter terrorist financing. The American President and the King of Saudi Arabia co-chaired the Terrorist Financing Targeting Center (TFTC).
In the announcement of the implementation of the TFTC, which involves the United States and Saudi Arabia, and other Gulf States (The Kingdom of Bahrain, The State of Kuwait, The Sultanate of Oman, The State of Qatar, and The Kingdom of Saudi Arabia), Treasury Secretary Steven T. Mnuchin acknowledged, “This new Terrorist Financing Targeting Center will enhance existing tools and cooperation with partners in the Gulf to forcefully address evolving threats.”[21]
In addition, Mnuchin noted, “Treasury will offer the vast expertise of our Office of Terrorism and Financial Intelligence to this creative new effort. We will co-chair the TFTC with Saudi Arabia and will work collaboratively with the countries of the Gulf Cooperation Council to counter these global terror networks.”[22]
There are three objectives of the TFTC, all which have now been implemented. Those objectives include (1) Identify, track, and share information regarding terrorist financial networks; (2) “Coordinate joint disruptive actions,” and; (3) “Offer support to countries in the region that need assistance building capacity to counter terrorist finance threats.”[23]
The Trump administration released other initiatives to combat terrorist financing. In 2017, the Department of the Treasury’s Office of Terrorism and Financial Intelligence (TFI) announced on new priorities.
Those priorities include the disruption of “the finances and operations of terrorist organizations across the globe.”[24] Second TFI will make use of existing “economic authorities such as sanctions to cut terrorist groups off from the international financial system and dry up their sources of revenue”[25] and confront illicit terrorist activity around the world. Third, the administration boldly announced the need to combat Iran’s state sponsorship of terrorist groups (Hamas and Hezbollah).[26] Fourth, sanctions are directed at terrorist groups and state sponsors (North Korea and Iran) and additional priorities to include “high-profile actions related to Venezuela, Russia, human rights abusers, drug kingpins, and cyber criminals.”[27]
In July of 2017 President Trump, via then Secretary of State Rex Tillerson, announced a bilateral agreement between the United States and Qatar. In the agreement signed by Tillerson and his Qatari counterpart, Sheikh Mohammed bin Abdulrahman al-Thani, the U.S. Secretary of State acknowledged, the accord “lays out a series of steps that each country will take in coming months and years to interrupt and disable terror financing flows and intensify counter terrorism activities globally.”[28]
What makes the agreement unique is that several other close American allies, Saudi Arabia, Bahrain, the United Arab Emirates and Egypt, each “imposed sanctions on Qatar last month, accusing it of financing extremist groups and allying with the Gulf Arab states’ arch-foe Iran, allegations Doha denies.”[29]
In September of 2019, Trump dramatically updated an existing executive order (E.O. 13224) that put foreign banks on notice that their institutions could face limited access to foreign markets if they handle designated foreign terrorist transactions.
Sigal Mandelker, the Treasury Undersecretary for terrorism and financial intelligence, announced at the International Institute for Counterterrorism’s annual summit in Israel, that “Foreign financial institutions should be on notice that the U.S. government will fully utilize this new authority if they are found to be, in any way, facilitating the malign activities of U.S. designated terrorist groups, their members and their supporters.”[30]
Analysis
In an analysis of the efforts to combat terrorist financing, there are conspicuous positives. First, individual states, regional, and supra international organizations (the UN) have worked to advance measures to combat terrorist financing. Second, actions by the major states (the U.S.-led efforts to call for measures to implement sanctions against Al Qaeda and the Islamic State) are critical to ensuring a global effort to counter terrorist financing around the globe. Third, the ongoing use of diplomacy is the central instrument is critical to advancing and sustaining the global effort to combat terrorist financing. Fourth, actions by the major states, particularly the use of force against a terrorist group to target their financial interests (e.g. the Islamic State’s oil tankers and oil fields) are enacted and implemented at much faster rate and often have an immediate impact. This often results in the swift measure to combat terrorist financing.
While there are multiple strengths associated with the global efforts to combat terrorist finances, there are several conspicuous problems. Many developing states recognize the necessity to combat terrorist finances; however, because of issues of governance and other priorities, many states do not and in some cases cannot prioritize terrorist financing as Tier 1 priority. Second, many states, developing and middle powers, have not implemented many of the regional or UN led actions. Similarly, many of these states lack the resources and non-corrupt bureaucratic entities to implement the local, regional, or international measures. Third, invariably, actions to counter terrorist financing is a reaction to a preexisting threat. That is, the international community reacts to actions taken by terrorist group. The actions taken and subsequently implemented by global sanctions regime takes considerable time to implement and more time to reduce finances of a particular terrorist group.
One thing is clear, the global sanctions regime is replete with success. Additionally, major powers, most notably the United States, have implemented a host of measures to combat terrorist finances. Taken collectively, there is much work to be done to curb terrorist finances.
Endnotes
[1] “High Level Meeting On Combating Terrorist Financing in Africa,” African Center for the Study and Research on Terrorism (CAERT), April 9, 2018. https://caert.org.dz/?p=2501.
[2] Ibid.
[3] “Terrorist Financing in West And Central Africa,” FATF-GAFI.org, October 2016. https://www.fatf-gafi.org/media/fatf/documents/reports/Terr or ist-Financing-West-Central-Africa.pdf.
[4] “Fight Against the Financing of Terrorism,” ttps://ec.europa.eu/home-affairs/what-we-do/ policies/counter-terrorism/fight-financing-terrorism_en.
[5] Ibid.
[6] “Countering the Financing of Terrorism,” Office of Counterterrorism. https://www.un.org/cou nterterrorism/cct/countering-the-financing-of-terrorism.
[7] Ibid.
[8] Ibid.
[9] “Countering the financing of terrorism,” UN Office of Counterterrorism. https://www.un.org/ counterterrorism/countering-financing-of-terrorism.
[10] “CTED Executive Director Participates in International Conference on Terrorism Financing,” United Nations Security Council Counterterrorism Committee, April 30, 2018. https://www. un.org/sc/ctc/news/2018/04/30/cted-executive-director-participates-international-conference-terrorism-financing/.
[11] Ibid.
[12] “Executive Order 13224,” Bureau of Counterterrorism, United States Department of State, September 23, 2001. https://www.state.gov/executive-order-13224/.
[13] “Highlights of Accomplishments and Results, The Administration of George W. Bush 2001-2009.” https://georgewbush-whitehouse.archives .gov/omb/bush_accomplishments.pdf.
[14] “The Global War on Terrorism: The First 100 Days,” The Department of State Archive, https://2001-2009.state.gov/s/ct/rls/wh/6947.htm.
[15] Adam Szubin, “National Terrorist Financing Risk Assessment,” Department of the Treasury, 2015, page 28.
[16] Ibid.
[17] Ibid.
[18] Lizzie Dearden, “ISIS in Syria: U.S. Air Strikes Destroys 283 Oil Tankers Used for Smuggling to Fund Terror Group,” November 24, 2015. https://www.independent.co.uk/news/world/middle-east/isis-in-syria-us-air-strikes-destroys-283-oil-tankers-used-for-smuggling-to-fund-terror-group-a6746211.html.
[19] Ibid.
[20] Lisa Ferdinando, “OIR Spokesman: Coalition Cripples ISIL Oil Distribution,” DOD News, November 18, 2015. https://www.defense.gov/Explore/News/Article/Article/630352/oir-spoke sman-coalition-cripples-isil-oil-distribution/.
[21] “U.S. And Saudi Arabia to Co-Chair New Terrorist Financing Targeting Center,” Department of the Treasury, May 21, 2017. https://www.treasury.gov/press-center/press-releases/Pages/sm0 092.aspx.
[22] Ibid.
[23] Ibid.
[24] “Illicit Finance-Combating Threats to Our National Security,” U.S. Department of the Treasury, 2017. https://home.treasury.gov/policy-issues/top-priorities/illicit-finance.
[25] Ibid.
[26] Ibid.
[27] Ibid.
[28] Tom Finn, “U.S., Qatar Sign Agreement on Combating Terrorism Financing,” Reuters, July 10, 2017. https://www.reuters.com/article/us-gulf-qatar-kuwait-idUSKBN19V2RV.
[29] Ibid.
[30] Mengqi Sun and Ian Talley, “Foreign Banks Risk Losing Dollar Access Under Expanded U.S. Counterterror Powers,” The Wall Street Journal, September 11, 2019. https://www.wsj.com /articles/new-u-s-powers-help-target-terrorist-financing-treasury-official-says-11568247532.
