Balwan Nagial
Balwan Nagial

Countering Financing Terrorism

For the maintenance and operation of a terrorist organisation, funds are required regularly. These funds are needed to purchase weapons, equipment, supplies, or services. The sources of funding for the terrorists may be legitimate or illicit. Such funding is usually in the form of numerous small donations rather than one large sum of money. Terrorism funding is a worldwide phenomenon that impends nations’ security, weakens economic development and financial market steadiness. It is therefore of the utmost importance to stalk the movement of financial resources to terrorists.

Though the number and nature of terrorist groups and threats have changed over a while, the fundamental requirement for terrorists to raise, move, and use funds have not changed. The finances are collected through innumerable ways and means, including exploitation of genuine commercial enterprise, ransom, manipulation of natural resources, misuse of non-profit organisations, drug trafficking, crowdfunding sites etc. Terrorists and terrorist groups may also be directly or indirectly linked to organised criminal groups. They may engage in criminal activities, including drugs or arms trafficking, trafficking in persons, extortion, and kidnapping for ransom. Many nations are more concerned about terrorists’ misuse of the Internet and other modern technologies to raise and move funds, including virtual currencies. Tracing measures and analysis of financial intelligence provide critical information on terrorist networks and links with individual terrorists, including foreign terrorist fighters (FTFs).

There is a strong linkage between terrorism and other crimes, especially drug trafficking, and this has been recognised by United Nations Security Council (UNSC). Detailed and comprehensive planning is needed to make fine-tuning strategies to thwart and disrupt these crimes. Though it is hard to establish how extensively terrorist organisations are intertwined in this illicit drug marketing and the nature of cooperation between these two criminal groups, the magnitude of the numbers involved makes the relationship worrisome.

Drug markets on the darknet only emerged a decade or so ago, but the main ones are now worth at least $315 million in annual sales. Although this is a tiny fraction of overall drug sales, the trend is upward, with a fourfold increase in annual sales between 2011 to 2020. Expanding online drug markets to social media and popular e-commerce platforms further suggests that their accessibility is widening day by day.

Drug marketing is a very lucrative business, about 1/5th  of the organised crime incomes. A significant chunk of the income from drug trafficking is channelled into terrorist groups’ coffers. In the past, major International terrorist organisations have emerged as significant players in monitoring the network of illicit drug trafficking. Employing increased surveillance on the traditional financial routes, terror organisations are regularly looking for resources to fund their activities.

There are two main categories of drugs used in the commercial of the illicit drug trade: opiates and cocaine. Opiates mainly have their origin in Afghanistan; cocaine originates from the Latin American countries, but mainly from Colombia. In addition, synthetic drugs are also more piercing than the historical sorts of traded drugs. The principal terminuses for opiates and cocaine are Europe, the United States (US), Australia, Canada and Russia. There is proof to support that Western and Central African nations are becoming significant users of these drugs.

Opiates travel from Afghanistan via three routes: the Balkan, northern and southern routes. The opiates routed through the Balkan are chiefly meant for European nations, and the northern route is mainly used to transport drugs to the Russian markets. The southern route is a bit intricate. From Afghanistan, opiates travel to Iran and Pakistan and then move towards various terminuses through the Indian Ocean Region. The Indian Ocean Region drug grid is crucial to the opiate trade, which, after leaving the coastal areas of Pakistan and Iran, branched into two. The western route connects to Kenya, Tanzania, Mozambique, Madagascar and Yemen and the eastern branch travels to India, Sri Lanka, the Maldives and other Southeast Asian countries. Drugs landing on the African coast further make their way to Central and West African countries and to the Sahel region to be either sold or transited to Illicit Drug Trafficking and Financing of Terrorism in Europe.  Sri Lanka serves as a transit point in the eastern region, mainly due to its reputation of prompt conduct of high port volumes, although a small portion of heroin stays in Sri Lanka for consumption.

The last few years have observed a very high increase in the cultivation and marketing of opiates in Afghanistan and cocaine in Colombia.Much to the joy of terror organisations which now adore an improved flow of funds. However, it has further increased the instability and terrorism in many countries of the world. Whereas in Western African countries, drug trafficking has funded the terror groups such as Boko Haram, Islamic State West Africa Province (ISWAP), Al Qaeda in Islamic Maghreb (AQIM) and many other splinter groups of terrorists. ISIS profits from the drugs trade, especially from synthetic opioid, in the areas controlled under them and in countries where it has its presence, like Libya, Somalia, Kenya and Tanzania and many more.

Drugs Trafficking and Terror Funding. Illicit drug trafficking subscribes to terrorist organisations invoking mechanisms such as cash supply, engineering chaos and volatility, encouraging corruption, provisioning cover and hideouts for illicit activities, and defending through law enforcement. Of these modes, cash and chaos are the two most essential aspects of terror funding through drug marketing.

Terrorist indulge in drug trafficking, not only generate revenue only. Various reasons could be the destruction of history and culture, demoralisation of communities, weakening social solidarity, and harms individuals’ health and well-being. It also pays for the social service functions of terrorist groups. Divergence of the illicit product has been the key to their survival. This is part of the sound trade practices of terrorists: engaged now in less policed forms of illicit trade than narcotics where they can make consistent profits with a minor threat to their supply chains. Terrorist groups are technically proficient and have trusted more on technology and cryptocurrencies to enable the operations of their illegitimate trade in arms and drugs, increase anonymity, and reduce risk.

Effectively countering the financing of terrorism presents numerous new and persistent challenges for many nations facing the wrath of terrorism. Building on the International Convention for the Suppression of Financing of Terrorism (1999) and Security Council resolution 1373 (2001), Security Council resolution 2462(2019)  calls on the nations to prevent and suppress the financing of terrorism by, among other things, criminalising the willful provision or collection of funds for terrorist purposes, and urges them to set up effective mechanisms to freeze funds, financial assets, economic resources or financial or other related services of persons involved in or associated with terrorism, as well as to prevent those funds from being made available to terrorists. In its resolution 2178 (2014), the Council urges the Member States to disrupt terrorism-financing activities linked to FTFs and criminalise the travel, recruitment and financing of FTFs. Furthermore, the Council also calls on States to conduct research and collect information to understand better the nature and scope of the linkages between terrorism and organised crime, whether domestic or transnational, according to resolution 2482(2019).

In addition to the relevant conventions and Security Council resolutions, analysis of the implementation of CFT measures by the Member States is also guided by the International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation of Financial Action Task Force(FATF) revised and updated from time to time.

When designing and applying CFT measures, Member States also need to consider the potential effect of those measures on exclusively humanitarian activities, including medical activities, that impartial humanitarian actors carry out in a manner consistent with international humanitarian law.

Conclusion. Terrorists might benefit from globally controlled crimes, especially from drug trafficking, either monetarily or operationally. Direct or indirect participation in unlawful activities embodies a striking source of capital funding. Concerning operational backing, terrorists might use facilities provided by planned illicit groups, including the forging of travel documents, the providing of weapons, and the use of drugs trafficking and smuggling routes to repositioning from conflict zones.

A robust legislative framework is the foundation of a sustainable CFT response. Integration of CFT into their national counter-terrorism strategy. The freezing of the assets of those suspected of terrorism financing and those designated in domestic and international lists is a highly effective way to disrupt terrorist capacities to raise, move, and use funds for the spread of terrorism.

About the Author
Colonel Balwan Nagial retired from the Indian Army in 2019 after serving for thirty years. Managed administration, security, project mgt throughout his service. He loves writing and contributing in newspapers and magazines in India. He loves Israeli culture.
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