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Article

Patrick J. O’Halloran, Christian Leuprecht, Ali Ghanbar Pour Dizboni, Alexandra Green and David Adelstein

This paper aims to examine whether the money laundering/terrorist financing (ML/TF) model excludes important aspects of terrorist resourcing and whether the terrorist

Abstract

Purpose

This paper aims to examine whether the money laundering/terrorist financing (ML/TF) model excludes important aspects of terrorist resourcing and whether the terrorist resourcing model (TRM) provides a more comprehensive framework for analysis.

Design/methodology/approach

Research consisted of case studies of resourcing activities of four listed terrorist organizations between 2001 and 2015: the Liberation Tigers of Tamil Eelam (LTTE), Hamas, a grouping of Al Qaeda-inspired individuals and entities under the heading “Al Qaeda inspired” and Hezbollah.

Findings

The most prevalent resourcing actors observed were non-profit organizations/associations, and the most prevalent form of resourcing was fundraising that targeted individual cash donations of small amounts. Funds were pooled, often passed through layers of charitable organizations and transmitted through chartered banks. The TRM is indeed found to provide a more comprehensive framework for identifying sources of resourcing and points of intervention. However, it does not in itself recommend effective means of response but it has implications for counter-resourcing strategies because it identifies resourcing actors and nodes where counter-resourcing could occur.

Originality/value

This paper advances the state of knowledge of terrorist resourcing activities in Canada and about the value of doing so through the analytical lens of the TRM as opposed to the predominant ML/TF model.

Details

Journal of Money Laundering Control, vol. 21 no. 1
Type: Research Article
ISSN: 1368-5201

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Article

Abdullah Alam

The aim of this paper is to explore the relationship between terrorist activities in Pakistan and the stock market development.

Abstract

Purpose

The aim of this paper is to explore the relationship between terrorist activities in Pakistan and the stock market development.

Design/methodology/approach

Using Terrorism Impact Factor (TIF), a unique score developed for this paper, an insight is provided into the causal relationship that exists between terrorism and Karachi Stock Exchange (KSE) index. Quantitative significance of the impact of terrorist activities on stock index is also discussed in the paper.

Findings

Through the empirics of the study, it is analyzed that terrorism negatively impacts stock market returns in the long run; whereas no significant relationship between stock market returns and terrorism is estimated in the short run.

Research limitations/implications

A potential limitation of the study was the constraint related to the available yearly economic growth and other economic variables' data. The TIF created for the study was based on the terrorist activities from 2001 to mid‐2011 on an incident‐to‐incident basis. A yearly measure would have provided 11 data points for the study, which are considered insufficient for econometric analysis.

Practical implications

It is recommended that governments pay particular attention to economic recovery in the aftermath of terrorist attacks. Policies aimed at combating terrorism must be the priority of the government, so that its harm can be reduced, if not exterminated.

Social implications

Terrorism, with its all kinds of impacts, affects the society and its activities and therefore must be eliminated if an economy needs to prosper.

Originality/value

This study envisions the overall impact of terrorist activities, not just a single activity, on the health of the economy. For studying this impact, a Terrorism Impact Factor (TIF) scale has been developed for this study, based on the impact of each terrorist activity in the country.

Details

Journal of Financial Crime, vol. 20 no. 1
Type: Research Article
ISSN: 1359-0790

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Article

Hamed Tofangsaz

– This paper aims to examine whether from a factual standpoint, it is sufficiently reasonable to address the suppression of terrorist financing by analogy with money laundering.

Abstract

Purpose

This paper aims to examine whether from a factual standpoint, it is sufficiently reasonable to address the suppression of terrorist financing by analogy with money laundering.

Design/methodology/approach

The process of terrorist financing will be examined in regard to the funding requirements of terrorists and the methods and tools that terrorists use to raise, move and store their funds. The process of money laundering will be compared with terrorist financing. The role of money laundering in terrorist financing will be discussed. In the core part of this paper, the assumptions justifying the inclusion of anti-money laundering measures to terrorist financing will be challenged.

Findings

What terrorist financing and money laundering share in common is money. However, there are fundamental differences between them with regard to the sources of funds and the direction of financial flows. None of the elements –“accumulation” and “legitimization”– involved in money laundering are necessarily engaged in the process of terrorist financing. This questions the authenticity of the assumptions which underlie the adopted approach. It also requires further investigation on the effectiveness of the integrated counter-terrorist regime, which will not be covered by this paper.

Originality/value

This paper provides a comprehensive introduction for those dealing with the greater question of whether the terrorist financing can and should be tackled by anti-money laundering measures.

Details

Journal of Money Laundering Control, vol. 18 no. 1
Type: Research Article
ISSN: 1368-5201

Keywords

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Article

Guru Dhillon, Rusniah Ahmad, Aspalela Rahman and Ng Yih Miin

The purpose of this paper is to give a better insight to the legal society, practitioners and legislators of the working mechanisms of money laundering activities, as well…

Abstract

Purpose

The purpose of this paper is to give a better insight to the legal society, practitioners and legislators of the working mechanisms of money laundering activities, as well as the functionalities of the Anti‐Money Laundering and Anti‐terrorism Financing Act 2003 (AMLATFA) in Malaysia, in curbing money laundering and terrorism funding activities. At the same time, the paper provides an overview on the applicability and practicability of the enforcement mechanisms in Malaysia by exploring legislations from different jurisdictions that are more developed.

Design/methodology/approach

The paper achieves this by having a cross‐sectional analysis onto the legislation in Malaysia such as AMLATFA and also similar legislations found in countries such as the UK. A complete insight is further gained by having interviews with experts in the judiciary, Bank Negara, as well as the experts from the Attorney General's Chamber in Malaysia regarding their insight into the subject matter. Last but not least, the authors also surveyed into the different points of view from journal articles in Malaysia and globally.

Findings

Malaysia has a legal framework for curbing money laundering but the current AMLATFA provisions are considered to have failed to be effectively enforced. A more comprehensive, specific and well elaborated legal framework will have to be laid down in order to create a better platform for the prosecutors to bring a good case against these money launderers.

Practical implications

This paper will give a deeper insight to the legal society of the capability of AMLATFA and the lack of it, in curbing money laundering in Malaysia and, at the same time, creating awareness among policy makers of the difficulties faced by the enforcement bureaus in prosecuting these money launderers due to the lacunas in the current law.

Originality/value

This paper could be useful source of information for practitioners, academics, policymakers and students and a guide for any possible future amendments to the current insufficiency.

Details

Journal of Money Laundering Control, vol. 16 no. 2
Type: Research Article
ISSN: 1368-5201

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Book part

Bappaditya Biswas and Ashish Kumar Sana

Terrorism finance (TF) has been aptly termed as the lifeblood of terrorism. TF provides funds for terrorist activities. Terrorists mobilize funds by using the formal…

Abstract

Terrorism finance (TF) has been aptly termed as the lifeblood of terrorism. TF provides funds for terrorist activities. Terrorists mobilize funds by using the formal banking system, informal value-transfer systems, hawalas, Hundis, and the oldest method of asset transfer. They may raise funds from legitimate sources, such as personal donations and profits from businesses and charitable organizations, as well as from criminal sources, like the drug trade, the smuggling of weapons and other goods, fraud, kidnapping, and extortion. Countering the financing of terrorism is a far greater challenge throughout the world. The objectives of the chapter are as follows: (1) to identify the different sources of terrorism financing, (2) to analyze various ways of moving terrorism funds globally, and (3) to examine the initiatives taken to counter terrorism financing.

Details

The Impact of Global Terrorism on Economic and Political Development
Type: Book
ISBN: 978-1-78769-919-9

Keywords

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Book part

Carla Monteleone, Raul Caruso and Andrea Locatelli

The purpose of this chapter is to investigate on the relationship between terrorism, criminal organisations, and the so-called ‘new wars’.

Abstract

Purpose

The purpose of this chapter is to investigate on the relationship between terrorism, criminal organisations, and the so-called ‘new wars’.

Methodology/approach

Review of the existing literature on the ‘new wars’ and on the terrorism–crime nexus; estimate of the financial revenues gained by terrorist groups engaged in illicit activities.

Findings

Terrorist and criminal groups can develop several forms of collaboration. Whether terrorists convert to criminal activities or not depends on a variety of factors, both internal and external. In some cases these links are occasional and opportunistic, associated with the possibility of exploiting the availability of specialised competences in a stateless environment, in other cases the warring parties are directly involved and create stable relationships as a way to finance their war activities.

Research limitations/implications

Lack of reliable data limits a comprehensive analysis. Nevertheless, the study has important consequences for designing and adopting more effective policies regarding terrorism, organised crime, as well as conflict resolution.

Originality/value of the chapter

The study presents an overview of different strands of the literature on terrorism; a discussion is articulated on the interplay between ‘new wars’ and the terror–crime connection. Potentially fruitful avenues of investigation are suggested for future research.

Details

Understanding Terrorism
Type: Book
ISBN: 978-1-78350-828-0

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Article

Bashar H. Malkawi and Hikmet O. Malkawi

The purpose of this paper is to examine the anti‐terrorist finance provisions in the Penal Law as well as the vulnerabilities in place that hamper more effective regime.

Abstract

Purpose

The purpose of this paper is to examine the anti‐terrorist finance provisions in the Penal Law as well as the vulnerabilities in place that hamper more effective regime.

Design/methodology/approach

The paper identifies the pre‐September 11 legal structure in Jordan regarding terrorist finance. Since, then the amended Penal Law, promulgated on October 8, 2001, has emerged as the principal tool in addressing terrorist finance activities. The paper is divided into five sections covering pre‐existing statutory provisions on terrorist finance, Jordan's counterterrorist financing regime including money laundering law and directives, the anti‐terrorist finance provisions in the Penal with its constituent elements, Jordan's accession to the United Nations Convention for the Suppression of the Financing of Terrorism, and finally the paper provides a set of conclusions.

Findings

There are still many loopholes to close in Jordan's anti‐terrorist finance initiatives. There is a need for greater enforcement of existing provisions with an eye to expanding the scope of article 147(2) of the Penal Law to include Islamic banks, hawala, charities, and zakat. A clear definition of the term “terrorist activity” should be supplied in article 147(2) and penalties for terrorist finance offense should be tightened.

Research limitations/implications

Lack of publications or research on the subject of terrorist finance in Jordan in Arabic.

Practical implications

This paper will be very helpful for any individual interested in the legal regime of anti‐terrorist financing as it exists in Jordan.

Originality/value

This paper meets a need for an understanding of the Jordanian legal regime as applied to anti‐terrorist financing and offers insights to lawyers and academics.

Details

Journal of Money Laundering Control, vol. 10 no. 2
Type: Research Article
ISSN: 1368-5201

Keywords

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Article

Seyfettin Unal and Mehmet Altun

This study aims to examine how important the countering terrorism financing is in the fight against terrorism and to what extent does financial intelligence contribute…

Abstract

Purpose

This study aims to examine how important the countering terrorism financing is in the fight against terrorism and to what extent does financial intelligence contribute into this field.

Design/methodology/approach

To this end, to collect data, semi-structured interview method was conducted for 15 experts, including academicians, judges, security and intelligence officers who have specialised and been practising in the field of terrorism. Then, the data were analysed with the descriptive and systematic method.

Findings

The findings highlight that countering terrorism financing is indispensable in the scope of the combating terrorism; however, there are still much to be done in practice to achieve more success in this field. The results also suggest that the process requires more flexible and proactive approach with the help of an autonomous financial intelligence unit to be more efficient. Moreover, there must be better cooperation and coordination at both national and international levels. Furthermore, training more professionals from multidisciplinary backgrounds and raising awareness among the public and private sectors are found to be other key factors for effective combating of the system.

Originality/value

The research has been conducted on participants who mostly have been in fight against terrorism over 20 years who are aware of the early methods, as well as the recent ones both in theory and in practice. Their view is significant to understand the situation in combating financing of terrorism.

Details

Journal of Money Laundering Control, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1368-5201

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Article

Andrey Petrovich Koshkin, Vladimir Aleksandrovich Zhidkih and Andrey Vadimovich Novikov

The terrorism of “Islamic State” (IS) is increasingly coming to be seen as a complicated and complex phenomenon permeated with various political goals and personal…

Abstract

Purpose

The terrorism of “Islamic State” (IS) is increasingly coming to be seen as a complicated and complex phenomenon permeated with various political goals and personal interests. The effectiveness of terrorist recruiters determines the need to identify the reasons for the appeal of the IS image and for the effectiveness of IS propaganda in different population layers and social groups. From this perspective, it is crucial to identify the significant social factors that are most affecting the perception of the terrorist activities of “IS” and their role in creating and shaping IS images. The purpose of this paper is to determine the role of social capital in the perception of the IS image.

Design/methodology/approach

The study is based on the findings of a sociological survey of a sample comprising 881 Russian students. In this research, six scales were used to identify the attitude of Russian students toward IS: informational awareness of IS; the image of IS fighters; the image of IS as an organization; attitude to an anti-terrorist policy; the role of the mass media; the level of social capital. Factorial analysis of the main components was conducted for each of the scales.

Findings

Subsequently, the correlation analysis of the relationship of social capital to the perception of the image of “IS” was conducted. Six main IS images were identified in the minds of the students. The research results show that survey participants with high levels of social capital are significantly more negative in their perception of the activities of the terrorist organization in question.

Originality/value

From this perspective, it is crucial to identify the significant social factors that are most affecting the perception of the terrorist activities of “IS” and their role in creating and shaping IS images. This study focuses on determining the role of social capital in the perception of the IS image.

Details

Journal of Aggression, Conflict and Peace Research, vol. 10 no. 1
Type: Research Article
ISSN: 1759-6599

Keywords

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Article

Nicholas Gilmour, Tristram Hicks and Simon Dilloway

The purpose of this paper is to examine – using crime script analysis – the practical effectiveness of internationally endorsed and universally recognised…

Abstract

Purpose

The purpose of this paper is to examine – using crime script analysis – the practical effectiveness of internationally endorsed and universally recognised counter-terrorism financing (CTF) standards in preventing the movement of money for the purposes of terrorism. The paper does not seek to examine the originating circumstances of terrorist finances or how laundered value is assigned.

Design/methodology/approach

Preliminary evaluation focuses on the discrepancies between the practices of money laundering and terrorist financing. Following an introduction to crime scripts, internationally endorsed anti money laundering (AML)/CTF practices are discussed to identify the process used to trace, prevent and limit money laundering and terrorist financing. Several terrorist financing case studies are then aligned to the process of crime script analysis to determine whether existing AML/CTF practices are effective in preventing terrorist financing.

Findings

The AML model “Placement, layering, integration” is only relevant to CTF in the comparatively rare cases when the origin of the money is crime. This creates a false sense of security through over reliance on AML/CTF for CTF purposes. A crime script approach can be applied to terrorist finance, but it is currently hindered by insufficient reporting of low level financing of terrorists, their addresses and associates. Law enforcement make insufficient use of financial intelligence – as a routine practice – in their crime and terrorist investigations; they have not adopted parallel investigation as a routine approach and consequently remain largely unconnected with the AML/CTF regime.

Practical implications

Utilising terrorist financing case studies, this paper identifies that existing AML/CTF international standards and practices are not adequate for controlling the movement of funds for financing terrorism because of the lack of focus on a specific script that aligns to known terrorist finance methodologies. While the paper identifies that existing AML/CTF international standards are thorough, the process underpinning the financing of terrorism is too dissimilar to the process of money laundering, namely, placement, layering, and integration, to support practices associated with terrorism prevention and detection.

Originality/value

This paper provides an examination of the practicalities behind the countering of terrorist financing from a compliance and investigative perspective. The paper is of interest to those involved in policy, compliance and investigations associated with terrorist financing.

Details

Journal of Financial Crime, vol. 24 no. 2
Type: Research Article
ISSN: 1359-0790

Keywords

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