Counterterrorism Blog

A few days ago my colleague Matthew Levitt published here an insightful essay asking, rhetorically, whether we are winning the war against terrorism financing. His piece was structured largely as a response to critic’s that have questioned the efficacy of our current strategy and efforts in this critical endeavor, and would have us shut down such current operations. While I completely agree with Levitt's response that the efforts taken by the Administration to clamp down domestically, and internationally on terrorism financing are necessary and worthwhile, I fear that they continue to fall way short in meeting effectively with the challenge presented. Despite these measures Al Qaeda, the Taliban, and other terrorist groups continue to have access to the funds they need for active and expanded indoctrination, recruitment, maintenance, armament and operations. I fear that we are not winning this war against terrorism financing, and I believe that it is time for us to re-assess, revamp and strengthen our overall counter-terrorism financing strategy.

While the United States has put in place an extensive array of measures to ferret out and stop funds from flowing to terrorists from our shores, the main sources of terrorism funding are overseas, not here. And we are still very far from achieving the needed international consensus on who the terrorists are, and what constitutes terrorism financing. It is still not illegal in most countries of the world, for example, to provide funding to terrorist organizations such as Hamas or Hezbollah. We have to concentrate our efforts to find a solution to this very serious deficiency.

Our international approach to date has focused on (1) criminalizing terrorism financing internationally and (2) cooperating with certain of our allies to “follow the money.”

UN Security Council resolutions and counter-terrorism conventions now set forth various international norms and obligations for combating terrorism financing. But there are serious gaps in these measures and the system of implementation and enforcement lacks any real oversight or accountability. The UN’s strongest measure - designation - only comes into play for Al Qaeda and the Taliban, and then only after a specific individual or entity has been added to the special list maintained by the UN’s Al Qaeda and Taliban Sanctions Committee. That list is way to short and out of date.

Implementation of the UN’s main counter-terrorism resolution -1373 - has also proved woefully disappointing. It directs that all countries criminalize terrorism and terrorism financing and requires all countries to freeze the funds and other assets and economic resources of any person or persons who commit, or attempt to commit terrorist acts. But, these measures only come into play after terrorist acts have been attempted or carried out. And, even then, local judicial or administrative proceedings are required before any of the assets can be frozen or transactions stopped. Another serious problem is the lack of consensus on a clear definition of terrorism. The International community has been struggling with this definition for over a decade. Without a common definition countries remain free to interpret their own obligations and define for themselves which groups are terrorists and which are “freedom fighters.”

“Following the money” has also proved something of a “hit or miss” proposition. We have put a lot of effort into developing useful links with the intelligence and enforcement services of a number of countries. But, due to the sensitive nature of sources and methods, and other political sensitivities, this circle of cooperating countries is not very extensive. This has produced some good results in identifying and closing down terrorist cells within our countries. But, we have had considerably less success in putting the prime funders out of business. In most cases they were not to be found within the circle of countries cooperating with these efforts.

Identifying and designating international terrorism financiers is central to our strategy to combat terrorism financing. Yet, it is becoming increasingly difficult to convince the other members of the UN Al Qaeda and Taliban Sanctions Committee to designate those responsible for funding terrorism. The Council of Europe and the European Court of Justice are now questioning the legitimacy of this designation process and its lack of transparency. Both Yasin Al Qadi and the Al Barakaat International Foundation, for example, have convinced the EU Advocat General to challenge their EU designations. And domestically, we have the Humanitarian Law Project Cases, one of which recently resulted in a very problematic ruling challenging the President’s authority to designate individuals or groups as “Specially Designated Global Terrorists (SDGTs). That case is now being appealed. Earlier the Swiss Prosecutor’s office had to reimburse Youssef Nada for the costs of defending an earlier prosecution alleging his terrorism financing. Another early identified terrorism financing facilitator, Admed Idriss Nasreddin was also recently mysteriously, and without any real explanation, removed from both the US and UN designation lists. These reversals have seriously undercut the credibility of the US, EU and UN designation process.

There is reason also for concern with the lack of international enforcement supporting the UN designation measures. A certain weariness has set in here and more and more countries are reluctant to dedicate the enforcement resources necessary to control terrorism financing activities. Malaysia and Saudi Arabia have taken no steps, for example, to freeze Yasin Al Qadi’s assets or to put him out of business. And it now appears that Turkey may also soon release his assets. It is well known that several charities designated by the UN for terrorism financing are still in business, many having merely changed their names. Both Wa’el Hamza Julaidan and Abdulaziz Al-Aqeel are reportedly still actively engaged with Saudi Charities providing assistance to suspect groups abroad.

Here at home we have also suffered several serious setbacks, including the dismissals, acquittals, and mistrials in the The Al Arian Case in Tampa, The Holy Land Foundation case in Dallas, and the Oregon Al Haramain Case. The NY Times reports that since 9/11 the Government has commenced more than 108 material support prosecutions. 46 of these were dropped. The government took pleas in another 42. Eight defendants were acquitted and 4 cases were dismissed. The Government obtained jury convictions in only 9 cases. The overall success rate in terrorism cases is around 29% compared to 92% for felony prosecutions in general. This is not a criticism - rather, it is evidence of the shear difficulty of establishing the knowledge and subjective intent of those shielding these activities under the guise of charitable giving.

These setbacks and failures are indicative of the problems we are facing in cutting off terrorism financing. That doesn't mean that we should stop what we are doing. To the contrary, we need to do what we are doing better, and we need to do more. We simply cannot be satisfied with the results we have had to-date.

I believe it is time for us to review and update our counter-terrorism financing strategy to deal with current terrorism funding realities and methodology. Different funding mechanisms are being used in different cases, although there are certain common elements One size does not fit all. And we must distinguish between funding for local terrorist cells and funding for more substantial insurgencies. While US government agencies have the benefit of regulatory requirements, reports and intelligence, the private sector, academia and think-tanks have some of best analysts and experts in the business. It’s time to bring these assets together to re-assess the situation and to develop some new ideas and new strategies for dealing with terrorism financing here and abroad.