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Published:April 6th, 2006 01:42 EST
Authorities combat funneling of money to terrorist groups worldwide

Authorities combat funneling of money to terrorist groups worldwide

By Juliet Maruru

According to Eben Kaplan’s Terror’s Twisted Money Trail on the Council for Foreign Relations website, “ The men who carried out the July 7, 2005 attacks on London's mass transit system are believed to have had a budget of $2,000. They raised the money in cash, completely off the radar of governments, which have pursued terrorist financial networks since 9/11.” This brings to case the point that as terrorist organizations continue to adapt to the fact that thy are under constant surveilance there is need for governments and security vehicles to also adjust their investigative procedure.

Matthew Levitt’s testimony before the U.S. Senate Subcommittee on International Finance, Committee on Banking, Housing and Urban Affairs, on Aug. 1, 2002, points out that ‘charities and humanitarian organizations play a particularly disturbing role in terrorist financing. Many present an especially sensitive challenge to authorities, who must discern between 1) legitimate organizations, 2) organizations that are unknowingly hijacked by terrorists who divert funds to finance their activities, and 3) organizations that proactively support terrorist groups.' For this reason authorities have to continually devise ways to turn off the tap that funds terrorist activities. Rachel Ehrenfeld in her article Turning off the Tap of Terrorist Funding supports that point when she writes: “Terrorism consists of two components: ideology and money. Just as the authorities must work to combat the ideology of militant Islam, it must work no less to destroy the flow of money to terrorist organizations. If this is not accomplished, terrorists will continue to be bankrolled by foreign governments, charitable organizations, the exploitation of financial markets, and a number of other sources. The consequences will be dire.”

To illustrate how serious the problem is, The International Summit on Democracy, Terrorism and Security highlighted the following facts:

“By far the most damaging effect of the deregulation of markets has been the merging of the New Economy of Terror with the international illegal and criminal economy. This phenomenon took place in the 1990s thanks to the deregularization of the international financial markets. As economic barriers came down, armed groups were able to link up with each other and with organized crime. They money-laundered dirty money via the same channels, they purchased arms from the same dealers. Today they amount to about $1.5 trillion, higher than the GDP of the United Kingdom. A break down of this economy follows:

q $500 billions are capital flights, money which moves illegally from country to country, undetected and unreported.

q $500 billion in what is commonly known as the Gross Criminal Product, money generated primarily by criminal organizations.

q $500 billion in the New Economy of Terror - money produced by terror organizations - of which as much as one third is represented by legal businesses and the rest comes from criminal activities, primarily the drug trade and smuggling.


The bulk of this $1.5 trillion flows into Western economies, where it gets recycled in the US and in Europe. It is a vital element of the cash flow of these economies.”


So what is being done? The White House website in September 2004 said, “The targeting of terrorist financing continues to play an important role in the war on terror. Freezing assets, terminating cash flows, and following money trails to previously unknown terrorist cells are some of the many weapons used against terrorist networks. The United States has designated 387 individuals and entities as terrorists or terrorist financiers. The global community has frozen more than $142 million in terrorist-related assets. These steps make it harder for terrorists to build networks, recruit and train new members, and carry out attacks.”

But the question remains, Is enough being done?