Terrorism is a major threat that every nation wishes to diminish in a bid to guarantee security for citizens and the resources meant to move their nation forward. The US has in particular been committed to combat it following the famous 9/11 attack which was considered a terrorist move. In the contemporary world, terrorism is an aspect that rarely lacks in the news. Al-Qaeda was once the most popular terrorist group of the modern times. Today, however, the world is faced with another group, ISIS, that seems more complex than Al Qaeda. Other than Al Qaeda and ISIS, there are several terrorist sub-groups associated with occurrences of terror in the US since the 1980s.
Between 1978 and 1995, mail bombings initiated by Ted Kaczynski, commonly referred to as “Unabomber,” caused three deaths while 23 individuals were injured. The charges that faced Kaczynski were not defined as terrorism though bombings that are sequential, and which were involved in this case, fall under the category of terror cases. He is serving eight life sentences associated with murder (CNN International Edition, 2017). In 1995, a bomb exploded in Oklahoma City and ripping through the Alfred Murrah Federal Building where 168 people lost their lives while approximately 700 individuals were injured. Timothy McVeigh was convicted in alignment with this incident, and his execution occurred in 2001. There are several incidences of terrorism that occurred prior to the year 2000, most of which were associated with individuals affiliated to prominent terror groups.
After the year 2000, terrorism is still a prominent incidence with ISIS affiliations being at the core. An attack by Omar Mateen, a native America who had officially announced his affiliation to ISIS, is documented as the worst terror incidence and the second-deadliest with only the 9/11 outdoing it. Matten visited the Pulse Gay Nightclub and engaged in a mass shooting where he killed 49 individuals and injured others (CNN International Edition, 2017; BBC News, 2016). The police managed to kill Mateen during the commotion that occurred in the night club.
The war against terrorism is not only centralized in the US but remains a decentralized mission where targeted terrorist groups must be apprehended, and action is taken to ensure the end of their operations. In this sense, the US has reached out to countries such as Iraq and Afghanistan and sought out their support in this war where success has been attained through such collaborations (U.S. Department of State, 2009). Though the US has managed to degrade prominent terror groups, such as the Al Qaeda, the networks are yet to be fully destroyed to defeat their course. The implication is that the war is still on and expected to proceed for quite some time.
The realization that terrorism no longer involves a group has enabled the US to renew their strategies to align with the characteristics of the principal enemy which is now a transnational movement comprising of extremist individuals, groups, and networks (US Department of State, 2009). The transnational movement relies on Islam and terrorism to strengthen its ideology. Although Al Qaeda articulates itself as the vanguard of the movement, there is no single person, state, or group that can be said to be the controller. The movement, however, relies on a common vision, with the common goal being to strengthen totalitarian rule through the utilization of violence, hate, and oppression (US Department of State, 2009).
Counterterrorism in the US
Most incidences of terror that have occurred in the US have culminated in the conviction of the suspects, with most of them receiving some counts of life sentences. Some individuals affiliated to terror groups, such as Matten, have been killed after engaging in a single or several attacks. Osama Bin Laden, who was an official member and leader of Al Qaeda, a prominent terror group was killed (Brown, 2012). However, this has not ended the war against terror.
The US devised a new strategy for their engagements in the war against terrorism. This was necessitated by an ever-changing world where terrorists also engage in a change of strategy to aid in their attacks and boost success in stirring the peace of their target. As part of the strategy aimed at winning the war, the US Department of State (2009) posits that the strategy is not only founded on armed conflict, but also on cooperation between intelligence, law enforcement, military, and diplomatic endeavors. This has led to the establishment of the Office of the Director of National Intelligence, Department of Homeland Security, and the National Counterterrorism Center. In collaboration with others who have joined in the move, the US has managed to halt pre-planned terror attacks since September 11, 2001 (U.S. Department of State, 2009).
The US exalts democracy which is the antithesis of terrorism. They are against individuals and groups that arise to disrupt the peace of democracies for any course, including political selfishness. While terrorism aims to create divisions among ethnic and religious groups, such as Muslims and the non-Muslims (U.S. Department of State, 2009), democracy aims to unite all people irrespective of race, religious and political affiliations, culture, ethnic background, color, and other attributes that yield the perception of inequity or discrimination. As such, counterterrorism strategies always target the exaltation of democracy and the suppression of violence, hate, and oppression.
The War on Terror called by America has faced many challenges in an attempt to dismantle the terrorist financial networks. The Americans have frozen massive terrorist assets in numerous bank accounts worldwide. However, terrorists’ groups have managed to maintain huge resources to fund their activities. They have devised several strategies of eluding detection by employing sophisticated laundering activities, use of cash, or legal front companies. They have managed to capitalize on cultural monetary practices such as making donations to charities and using informal money transfer systems. This has made it difficult to investigate and detect how these organizations raise and distribute financial resources (Kaplan, 2006).
In the past, donations were regarded as the leading source of terrorist funding. These donations were usually given out by wealthy individuals and charities. The CFR Task force Report (2002) indicated that wealthy individuals and charities mostly from Saudi Arabia were known to be the greatest financiers of the Al Qaeda terrorist group. Investigations revealed that some of the individuals and charities raised funds on behalf of terrorist organizations. Some charitable organizations have the intention of promoting Islam through legal programs but are soon emasculated by jihadists who then use the funds for terrorism activities.
However, some analysts are of the opinion that illegal activities are the largest source of terrorism activities. Most of the income that is used to fund terrorist activities comes from income generated from illicit drug trade. Many terrorist groups support themselves through illegal businesses. Mioses Naim (2005) stated that the World Trade Center bombing terrorists supported their operation by selling counterfeit T-shirts in Broadway, New York City. Additionally, the masterminds of the 2004 Madrid bombing supported their activities by trafficking drugs and sold counterfeit CDs. Other terrorists groups like the Basque ETA, the Irish Republican Army, and the Hezbollah generated their income through dubious counterfeiting activities. The FARC, which is a terrorist organization in Colombia, used to raise funds by dealing in cocaine. The Al Qaeda is believed to have profited heavily from Afghanistan’s poppy crops that is estimated to be about 90% of the world’s opium supplier. However, the Al Qaeda was forced to abandon the trade in 2001 when the Taliban government was overthrown.
Another source of income for terrorism activities is the use of legitimate companies to raise funds. Most terrorist organizations operate legitimate companies which generate their own income and are also used money laundering fronts. Terrorism linkages have been detected in companies in diverse industries including constriction, agriculture, livestock and fisheries. The New York Times (2001) linked Osama bin Laden with a chain of retail honey shops in Pakistan and the Middle East. The honey was also used as a front for concealing shipments of weapons and money (Shapiro, 2007).
Modern day terrorist networks also use Alternative Remittance Systems to access funds due to its convenience. This is because these systems are less opaque and have weaker record keeping in many parts of the world. They are also not subjected to stringent regulations. Even though the Financial Action Task Force (FATF) standards are aimed at strengthening controls on such financial service providers, the levels of secrecy and anonymity that such systems afford make them attractive for terrorist organizations. Some networks also afford pragmatic as well as cultural reasons for the services. Many of them trace their origins in locations where banking services are either non-existent or weak. They serve as end user gateways to terrorist organizations where operational funds are transmitted to terrorist cells. Some terrorist organizations also make use of cash couriers’ top support their activities. Most of these organizations avoid using the traditional banking services to avoid detection by law enforcement due to the audit trail that such services leave. The finances that supported the Bali bombing in 2002 were made available by the Al Qaeda chief to a certain head of an organization who was in Thailand at that time. This individual then passed a certain amount of money to the perpetrators of the bombing in batches using several cash couriers who took a few weeks to complete the runs. The same system of couriers was also used in the JW Marriott Hotel bombing in Jakarta in 2003 (Financial Action Task Force, 2008).
Most terrorist organizations seem to wield a lot of power, but the bombing of the World Trade Center revealed the financial intrigues that most of these organizations face. The central command of these organizations has massive resources which end up at the hands of brokers and giving kickbacks to government officials. The World Trade Center bombing of 1993, killed six people and injured thousands of people. However, the situation could have been worse if the rented van had loaded explosives to its full capacity of over 4000 pounds. The leader of the attack, Ramzi Yousef, later confessed that he did not have sufficient funds to buy adequate materials to make a larger bomb. He also revealed that the attack was done in a hurry because his cell did not have enough money to undertake thorough planning (Levitt, 2002).
However, at the time of the attack, his organization, Al Qaeda, was generating a lot of money in Sudan that was intended to fund its activities including running military training camps, funding its supporters, and giving kickbacks to the Sudanese government (Guranatra, 2002). The situation is also the same with other terrorist organizations as was the case with Idris, who was the architect of the Bali bombing in 2002. Idris was later arrested in a botched bank robbery whose aim was to raise funds for subsequent attacks.
These scenarios reveal a puzzling pattern of financial intrigues and logistical systems in these groups. The rationale here is that the central command of terrorist organizations usually provides enough funds to groups that are tasked with carrying out attacks. However, these groups will usually provide inadequate finances to their operatives. Investigations on the financial accounts of such organizations show that their financial distribution networks are highly efficient through their covert operations. They are known to be flexible and resourceful in raising and using funds. They are also viewed to be highly decentralized, compartmentalized and diverse in their targets and methods. The Al Qaeda has a financial network that is able to raise money from a number of sources and has the ability to move and distribute money in a number of ways (Weschler & Wolosky, 2002).
It is from this view that it becomes hard to imagine why such groups have big challenges when it comes to funding operational elements. This shows that the different members of terrorist organizations are not driven by shared mission accomplishments but rather by monetary rewards. Due to their covert nature, most of these organizations are characterized by informational deficiencies which give rise to opportunities for middlemen and other operatives to appropriate massive resources for their own use.
Counter Terrorism Measures
The global response aims at disrupting the financial networks of terrorists so as to counter and combat terrorism. This is because terrorist organizations have diverse financial requirements and the rationale is to disrupt their activities by choking their flow of funds designed for terrorist activities. By dismantling these flows, governments can be able to weaken the capabilities of these groups over time and thus limiting their ability to organize attacks, introducing uncertainties and risks in their operations and making their operations become more expensive. This can be beneficial because it will damage the morale of such organizations and their operatives compelling them to shift their operation methods and styles which make them more vulnerable.
By disrupting funds that are linked to terrorism, countries are able to create an environment that is hostile to terrorism. This is because by constraining their funds, their capabilities are weakened and thus limiting their effect and reach. The ability to detect the financial capabilities of terrorist legitimate organizations, financial institutions need to implement the FATF standards by being able to know their customers and clients well. They can do this by applying customer due diligence procedures and policies. These procedures and policies are important in reporting suspicious transactions that might be supporting terrorism activities. This calls for jurisdictions to adopt and implement measures such as protection of weak sectors, such as the money services businesses and charitable organizations. They can also adopt financial sanctions programs and encourage effective reporting systems of suspicious transactions.
The FATF Targeted Financial Sanctions urges all countries to adopt and implement the targeted financial sanctions regimes to identify, freeze, and prohibit funds and assets of terrorist organizations and their networks once detected. These actions are crucial in depriving terrorist organizations the means of maintaining their infrastructure and networks and conducting future terrorist activities.
The protection of vulnerable sectors aims at cushioning such financial sectors from the effects of terrorism financing and money laundering activities. Terrorists also need to be prevented from using or having unlimited access to wire transfers to move money and for early detection of such activities. The aim of these policies is to ensure that critical information on the originators of money transfers be availed to; a) the appropriate law enforcement authorities to help them in detecting, investigating, and prosecuting terrorists and also to trace their assets; b) Intelligence units in finance to analyze suspicious financial activities and; c) the financial institutions benefiting from such transactions to enable identification and reporting of suspicious transactions.
These efforts are aimed at protecting non-profit organizations, charitable organizations, and others from being misused by terrorist organizations which; a) pose as legitimate business concerns; b) use legitimate businesses as conduits to finance their activities and to evade asset freezing measures; or c) hide the illegal transfer of funds intended for legitimate purposes which are later diverted to terrorism activities.
FATF has been able to develop a multidimensional approach that is effective in identifying, preventing, and combating the misuse of charitable organizations which focus on four approaches that include a) an outreach initiative to charitable organizations b) supervising and monitoring of this sector c) gathering of information and investigations and d) the protection of the sector through international engagement.
The cash couriers special recommendations were developed to ensure that terrorist do not avoid financial market controls by using cross border money transportation including bearer negotiated instruments. These recommendations ensures that governments and countries have developed measures to a) detect cross border money transportation including bearer negotiated bearer certificates b) to prevent, detain or confiscate money or bearer negotiate certificates that are declared or disclosed falsely and c) implement sanctions for false declarations or disclosures (FATF, 2008).
The suspicious transaction reporting financial information plays a pivotal role in identifying movement of finances and funds for terrorist activities through the financial system. This is an ongoing process that attempts to analyze the operational experience of agencies tasked with the responsibility of countering terrorism to create signal or alerts regarding suspicious terrorism funds and finances. The diverse nature of the terrorist financial networks creates a big challenge to these efforts. However, these challenges can be countered by developing indicators which are generic, and which can identify suspicious financial activities. When such transactions are detected, financial institutions are required to file prompt transaction reports for further action.
Even though it might be difficult for financial institutions to report electronic transfers, large sums of money, or cross border currencies, it is still possible to have an efficient reporting system that could provide important information to law enforcement agencies which can avert the flow of terrorism funds. It is important that government and national authorities to become part and parcel of this process by assisting the financial institutions in their efforts to identify terrorist activities and prevent them from occurring by sharing of intelligence.
Information regarding finances alone cannot be able to sufficiently identify terrorism financial activities. However, when there is adequate collaboration between financial institutions and the counter terrorism agencies, intelligence gathered from surveillance of a wide range of terrorist’s networks and activities can be fully utilized to provide financial institutions with solid intelligence of potential terrorist activity or financing. The information can be used to help determine between legitimate financial activity and sources of funds that are destined for terror activities. The exchange of information between the private and public sector is also a crucial area that has been identified by FATF of one of the top highest-level principles that can be able to counter incidences of money laundering and terrorist financing (FATF, 2008).
In conclusion, the US has made strides in the war against terror, and the fight is still ongoing. The realization that terrorism is no longer controlled by specific individuals or groups necessitates a change of strategy in fighting the terror and the associated outcomes. Some of the individuals affiliated to prominent terrorist groups have been convicted or killed, a factor that is enhanced by an occurrence of terror initiated by them. Eventually, it emerges that a change of strategy by the terrorists, who are now comprised in a transnational movement, necessitates a change in strategy by those hoping to win the war against terror. Terrorism is a menace that flourishes through its financial networks. Terror organizations have sophisticated networks which are complex and agile. This has made it difficult for counter terrorism agencies to fight against terrorism. By studying the structure, infrastructure, and hierarchy of terrorism organizations including how they raise and distribute funds and finances, counter terrorism agencies can be able to disrupt and dismantle these networks and weaken these terror organizations. This will make them more vulnerable and reduce their capabilities to launch frequent terror attacks. These efforts need to be adopted and implemented by strict adherence to the FATF standards which provide important guidelines and procedures on how governments, the public sector, the private sector and financial institutions can identify, investigate, and prevent the flow of terrorism funds in the financial system.