What We Have and Haven’t Learned About Terrorism Financing

Follow the money. That phrase is both tired and yet still essential when discussing counter terrorism financing in 2022. Policy attention shifted to this issue in the wake of the 9/11 terror attacks, and the public and private sectors mobilized to disrupt it. Terrorism financing threats spawned new bureaucratic institutions (like the Treasury Department’s Office of Terrorism and Financial Intelligence), repurposed military assets to target financial facilitators and even cash stockpiles, deputized the private sector to carry out financial monitoring and bring civil suits to defund terrorists, and empowered law enforcement to disrupt plots and prosecute terrorist financiers. The international community integrated the goal of countering terrorist financing into its architecture for countering financial crimes, especially using the intergovernmental Financial Action Task Force (FATF), which had previously focused on money laundering.

Unfortuantely, the collective understanding of terrorism financing remains highly fragmented and, given the sensational nature of terrorism, often anecdotal. In government bureaucracies, it’s a place for “specialists,” but that’s not often a compliment; popular culture caught on to the waning perception of counter terrorist financing when portraying it as a fictional CIA backwater, the Terror Finance and Arms Division (T-FAD), in the 2019 Amazon Prime Video series pilot of “Tom Clancy’s Jack Ryan.” With life imitating art in the same year, the FBI quietly shuttered the real Terrorist Financing Operations Section (TFOS), another post-9/11 creation, and spread its functions across other elements of the bureau’s Counterterrorism Division.

Over the past two decades, terrorism financing matters have largely worked as the camel’s nose in the tent to achieve wider ranging policy goals on anti-money laundering (AML), counterproliferation, counternarcotics, cybersecurity and anti-corruption. The 2001 USA Patriot Act understandably focused heavily on countering the financing of terrorism to update the Bank Secrecy Act regime, a legal framework for financial institutions and governments to monitor and address financial crimes, but also included substantial AML reforms. The most recent overhaul, the Anti-Money Laundering Act of 2020, while providing necessary incremental improvement for countering terrorist financing, seeks to equip the U.S. financial system and government authorities for a fundamentally new era of financial threats centered on emerging technologies and nation-states. A Feb. 3 policy speech at the Union of Arab Banks by Elizabeth Rosenberg, the Treasury Department assistant secretary for terrorist financing and financial crimes, explicitly details how the Biden administration is moving beyond terrorist financing concerns to address “equally important” threats such as corruption.

Terrorist financing nevertheless remains a perennial security challenge that cannot and will not be ignored by policymakers. Fortunately, Jessica Davis has made a timely and wide-ranging contribution to the collective understanding of terrorism financing in her new book, “Illicit Money: Financing Terrorism in the 21st Century.”

Read the full article from Lawfare.