Disrupting terror group finances to exploit organizational weaknesses

Disrupting Terror Group Finances to Exploit Weaknesses in Terrorist Organizations

Global war on terrorism has been executed in many different fronts. This followed the 2001 terrorist attack on the United States that marked the beginning of targeting the financial networks of terrorists (Center for Excellence Defense against Terrorism, 2008). Terrorists depend on financial networks in order to succeed in executing their activities. Although terror activities are not costly, the support of training camps, infrastructure, command, and control requires the availability of significant funding. The current funding of Al-Qaeda is estimated to be $36 million and approximately $50 million for infrastructure and equipment (Lormel, 2002). However, while terrorism is expensive, it is not a profitable economic enterprise. Unlike human trafficking, organized crime and narcotics trade, the operations of terrorism depends on an independent source of financing. Additionally, terrorist organizations have developed a system of distributing these funds around the globe in conducting their operations on an international scale (Gunaratna, 2007).

Disrupting Terror Group Finances to Exploit Weaknesses in Terrorist Organizations

Introduction

The frameworks below provides the foundation for examining actions taken by corporations, individuals and agencies that have played critical roles in disrupting terror groups finances in the global war on terrorism. This study provides analysis on the uses and consequences of the tactics used in disrupting terror group finances and their effectiveness in combating terrorism. Moreover, it provides insights on how these tactics are linked; their effectiveness depends on how financial, law enforcement, military, and intelligence personnel will use them against terrorist groups (Zagaris, 2008).

Discussion

For terrorist organizations to succeed, they need to raise, transfer, and use some money. Therefore, counter-terrorism strategies must incorporate the financial component in order to curb this vice. There are different dimensions that target the financial networks of terrorists. If the focus is put on these aspects, it can contribute to disruption of financial support of terror groups (Amos & Petraeus, 2009). Further, it can also contribute in the identification and destruction of terrorist organizations. Financial assets can be blocked or frozen by the government by labeling organizations or individuals as terrorists or as associates of terror groups. Such actions can easily degrade the efforts of terrorists in accessing funds thus increasing the expenses of raising, using, and transferring funds. This may lead to a decrease in resources used by terrorists in executing attacks hence limiting their geographic scope (United States Marine Corps & John, 2007).

Blocking and Freezing Financial Assets

The government uses aspects such as blocking and freezing of financial assets as a way of attacking the finances of terrorists. Governments have the authority to freeze the financial assets of terrorist organizations, terrorists, and their associates' assets. Additionally, the government can impose trade sanctions that aim at controlling activities of these groups (Lormel, 2002). The treasury executes and administers such sanctions with additional support from the Financial Crime Department when suspicious activities are identified. This leads to the publication of a list of businesses such as banks and brokers that have been banned from conducting financial transactions with terrorist entities. The purpose of these sanctions is to deny terrorists and individuals who assist them from accessing financial systems. This also aims at increasing the cost of raising, moving, and using funds. If assets are frozen, it cuts off the supply of funds within terrorist members and blocks transactions thus preventing terrorists from transferring funds around (Center for Excellence Defense against Terrorism, 2008).

If the above two effects are combined simultaneously, they accomplish key strategic objectives. First, they lead to a decrease in the resources of terrorists and disrupt their ability to gather funds, which decreases their capability to operate on terms of their degree of synchronization, sophistication and degree of their lethal attacks. Secondly, if terrorists are denied the ability to transfer funds puts them in international isolation and cuts down on their geographical scope of operation. Such outcomes support the primary objective of the counter terrorism policy of containing terrorism within the enforcement of national law (Muller & Uriel, 2007).

The government has mandated the secretary of state with the responsibility of imposing the above sanctions terrorist organizations and their associates. The secretary of the treasury blocked not just terrorist organizations and terrorist, but individuals who are associated with terrorism activities. In addition, the scope of the sanctions has been broadened from national to global terrorism. Because the foreign policy has laid the foundation of these blocking actions, they are not treated as criminal proceedings. Further, there are numerous sources providing evidence for blocking and freezing assets: these sources are subject to privacy and they remain confidential to the reviewing court (Gunaratna, 2007).

The above sanctions have been successful in disrupting terror group fundraising and charities. The government has succeeded in dismantling international financial networks of terrorists. This has destructed millions of dollars that were channeled to these organizations. Groups supporting terrorist activities claim that they are suffering from the above financial sanctions due to the poisonous nature of the sanctions. As a result, these agencies have filed lawsuits and defamation suits against the government (Linden, 2007).

The Intelligence Aspects of the Finances of Terrorists

Disrupting terror group finances can be viewed from the perspective of following the terrorists' money. Since financial transactions involve proper documentation, identification of the financial structure of terrorist organizations and trailing their transfer of funds can be a source of hard evidence of relationships, associations, and networks. Law enforcement, intelligence and other authorities can use this evidence to locate, identify and apprehends terrorists. The business records provide financial linkages that offer verifiable and tremendous information that complements the relationships developed from signal, human and source intelligence. The front charities and organizations that launder and raise funds for terrorist organizations appear to be susceptible to investigations because of the nature of their finances (Center for Excellence Defense against Terrorism, 2008).

Departments such as the treasury and justice have recorded success in investigating and dismantling terror organizations. Investigations have led to the identification of the terrorists that hijacked four different accounts and their link to international financial support (Whitmore, 2002). In addition, the treasury department has recorded more than 2,400 arrests in foreign countries: the war against terrorist attacks in countries including Germany and Morocco have intensified courtesy of intelligence information obtained from financial trails of terrorists. The detention of Israel's lead terrorist Mustafa Ahmed has made the intelligence services optimistic about financial intelligence in curbing terrorist activities. The government was able to trail the financial records of Mustafa Ahmed and identified him. This was achieved by tracing funds that he transferred from cities such as Dubai and New York. Research indicates that documents found in Afghan were intimately associated with al-Qaeda's plots for carrying out assassinations and the distribution of biological and chemical warfare manual (USA international business publication, 2002).

Moreover, the U.S. Patriot Act provides more measures that facilitate the timely and thorough sharing of intelligence information between multiple agencies. This facilitates the effectiveness of data mining and investigations too. This Act authorizes financial entities, law enforcement institutions, and regulatory agencies to share intelligence about potential terror suspects or individual involved in money laundering activities. In addition, the Act decreases the complications associated with authority that requires subpoenas provided in countering terrorism and countering intelligence investigations. Such changes have paved way for an efficient and timely gathering of information from credit bureaus, financial institutions, internet service providers and telephone companies (USA international business publication, 2002).

Coordinated procedures and systems have been developed in order to analyze and distribute data between domestic and foreign entities. This mechanism is effective in deriving the value f intelligence from financial records. The establishment of the Terrorism Financial Review Agency has aided in carrying out investigations into terrorist financial matters (Lormel, 2002). Further, the FBI restructured and expanded its Terrorist Financial Operations department whose primary purpose was to identify, investigate, prosecute, and dismantle all financial and fundraising activities related to terrorists. FBI's financial database of terrorists is fundamental to its investigations. The database incorporates financial information derived from account records and records of foreign wire transfers and foreign banks. It also entails intelligence information gathered by other intelligence services. Authorities have been enabled to use this data in following familiar leads in search of patterns, signals, and profiles of financial activities. Such information is likely to help authorities in identifying leads on potential and active terrorists operations (Muller & Uriel, 2007)

The FBI has received substantial support from other agencies who are involved in conducting investigations in the finances of terrorism organizations. Such agencies include Financial Action Task Force, OFAC, and FinCEN. All these agencies have recognized the benefits and importance of conducting financial investigations for obtaining fact-based evidence, leads, and linkages to terrorists. The agencies work by collaborating thus coming up with separate financial records leading to critical formation of a map of terrorist organizations (USA international business publication, 2002).

Legislative measures and interagency cooperation that encourage sharing of intelligence information are fundamental in facilitating the effectiveness of intelligence data. However, these activities are lateral links between organizations. Financial and law enforcers, military and reporting of intelligence are carried out by respective agencies drawn on limited coordination efforts (Whitmore, 2002). While agencies can pull and push intelligence data, these structures lack a centralized system for collecting intelligence. This limits the ability to conduct a meta-analysis of data across inter-agencies systems. Lack of proper coordination efforts reduces the usefulness of financial intelligence thus making it difficult to link the financial intelligence with other useful information. Critics claim that financial evidence is useful in supporting a case; it does not lead to prevention of terrorism attacks (Linden, 2007).

However, a centralized system of coordination may be an effective way of exploring financial data through linking it with other useful information. This can be made useful if the agencies improve their overall understanding of the financial networks of terrorists. The new homeland security departments are signals that there are efforts for a coordinated on the formation of dominance unit. However, these processes have not integrated collection of intelligence and analysis by international agencies. In general, the primary purpose of integrating such financial intelligence is to facilitate the warning of terrorist attacks, increasing interdiction of law enforcement and heightening the degree of war fighting intelligence (United States Marine Corps & John, 2007).

The Law Enforcement Aspects of the Finances of Terrorists

It is illegal to provide material support to terrorists because it predicates committing other crimes like money laundering, fundraising fraud, evading tax and fraud. Typical judicious enforcement of crime statutes associated with the white-collar may be an effective tactic against terrorists and their financial supporters in two ways (Lormel, 2002).

One, illegal financial activity that connects finance and law enforcement authorities may be used as evidence in international investigations. Some businesses or government might fail to recognize that one is involved in terrorism, but the financial crime provide an obvious evidence of wrongdoing that can solidify resolve to investigate or attack these people. Good example is what was initially a cigarette smuggling and racketeering that now is now Hezbollah cell discovered in North Carolina. Investigation led to the accusation of more than twenty terrorist supporters (Amos & Petraeus, 2009).

Two, imprisoning these terrorists and their supporters through prosecution for their financial crimes may be the most effective way just as Al Capone was jailed for tax evasion. Sometimes, obtaining a conviction on specified acts related to terrorism audit trials from financial crimes may be substantively proved in court. This may lead to prosecution without compromising sensitive intelligence. Up to now, accusations and complaints have been filed against individuals related to terrorism for different financial crimes. They include bank fraud, credit card fraud, money laundering, embezzlement, and many other non-financial crimes like perjury (Linden, 2007).

Finally, the U.S. officials blocked all Enaam Arnout assets as they had identified Arnout as a suspect to the criminal investigations. Accusations came from the FBI of Arnout involvement in terrorists' activities and his links with Osama Bin Laden. This was shared with Bosnia authorities after conducting a no-notice search of the eight locations affiliated with BIF on Bosnia, on which they found computers and other unquestionable materials linking Osama Bin Laden with Enaam Arnout (Center for Excellence Defense against Terrorism, 2008).

The government of America has established joint coordination groups in key regions such as Bosnia. These groups are headed by regional commanders who provide assistance in breaking down the nature of multiple agencies involved in collecting and analyzing intelligence. Studies indicate that the joint groups have the responsibility of representing the agencies, civilian department and ensures that intelligence information is shared among the integrity community. The group provides timely, collaborative, and regular daily working relationships between operational planners in the military and civilian community. The Arnout scenario is an indication that coordination between inter-agencies is an effective way of achieving success in fighting terrorism (USA international business publication, 2002).

Summary of Findings

Trailing the transfer of money among people involved in terrorist groups and their associates indicates that there are relationships, associations, and networks within terrorist organizations. The existence of such financial networks offers an extremely tangible complement to these relationships that originate from open source, signal and some forms of intelligence. The intelligence service can use a coordinated mechanism of gathering, reporting and analyzing the financial networks of terrorists. This will help them provide authorities with information to identify and locate terrorist organizations and networks that support them financially (Whitmore, 2002).