Financing of terrorism: Risks for Australia

Terrorist groups may have a range of motivations and justifications for their actions including support of a particular religious faith; promotion of international recognition and political self-determination for ethno-nationalist and separatist groups; the achievement of entire political, social, or economic system change according to extremist left- or right-wing models; or simply changing a specific policy or practice as in the case of animal experimentation. One of the main responses to threats of terrorist activity involves the use of financial transaction reporting and monitoring. This operates in two ways—first, by placing impediments in the path of those who seek to accrue and to move funds using the regulated financial sector and second, by enabling law enforcement and intelligence agencies to follow the financial trail of transactions left by those who make use of the regulated financial sector, so as to detect and to prevent possible attacks.

This paper examines the global environment in which the financing of terrorism occurs, particularly with respect to the activities of transnational, organised groups that may have an involvement with terrorist organisations. Consideration is then given to how the financing of terrorism occurs, first through the use of illegally obtained funds and then through financing derived from legitimate sources, such as charitable donations, which are diverted for use in terrorist activities. Evidence of the financing of terrorism in Australia is then examined and cases which have been detected and prosecuted in Australia that entail an element of terrorist financing are reviewed. Although the number of cases is small, they are indicative of the fact that Australia is not immune from terrorist activities that are being financed by Australian individuals and organisations.

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The Financing of Terrorism

I found a reference yesterday to an article describing how the illicit trade in cigarettes can help finance terrorism. This was located on Deborah Osborne's very impressive blog, Analysts Corner. I reproduce the link here, not to steal her thunder but to emphasize her point with some extras thrown in. The message is that in your jurisdictions, whatever they may be, you may come across illegal trafficking in cigarettes or other commodities such as baby formula. If you do, the proceeds may be going to finance something illegal and dangerous, so investigate a little deeper maybe. Please read on.

Terrorism and Tobacco--How Cigarette Smuggling Finances Jihad and Insurgency Worldwide, Kate Willson, June 29th 2009. Center for Public Integrity correspondent

"For centuries, blue-turbaned nomadic Tuareg tribesmen have led caravans of camels across the expanses of the Sahara. Laden with millet and cloth from Africa’s West Coast, the caravans traveled unmarked paths to trade for salt and dates in Timbuktu, across the sand plains of Niger, and into the mountain oasis of the Algerian south.

Smugglers take the same routes today — driving SUVs along paved roads or with guidance from the Tuareg and satellite phones — to move weapons, drugs, and, increasingly, humans — through the Sahara for transport across the Mediterranean Sea. The paths are no longer known as the Salt Roads of the Tuareg, but as the 'Marlboro Connection,' named after the most lucrative contraband along this 2,000-mile corridor."

• To read the full article from the The Cutting Edge News, please click here.
• To read an earlier piece by The Center for Public Integrity, please click here.

Is black-market baby formula financing terror?
By Mark Clayton | Staff writer of The Christian Science Monitor. June 29, 2005.

"On the day terrorists destroyed the World Trade Center, a Texas state trooper pulled over a rental van driven by a Middle Eastern man toward Houston. Opening the cargo door, the officer found a huge load of ... baby formula.

False alarm? Not really. Police later identified the driver as a member of a terrorist group and linked him to a nationwide theft ring that specialized in reselling stolen infant formula, says Sgt. Johnnie Jezierski of the Special Crimes Service of the Texas Department of Public Safety. Proceeds were wired to the Middle East. The driver is still under investigation.

Operation Blackbird, as Texas investigators dubbed their multistate baby-formula investigation, has since led to felony charges against more than 40 suspects, about half illegal immigrants. Authorities have seized some $2.7 million in stolen assets, including $1 million worth of formula.

Blackbird was just the beginning. In the nearly four years since 9/11, police have uncovered and dismantled a growing number of regional and national theft rings specializing in shoplifted infant formula, over-the-counter medicines, and personal-care products. At least eight of the major baby-formula cases have involved "fences" who are of Middle Eastern descent or who have ties to that region, according to a Monitor review of congressional testimony, news accounts, and a study by the National Retail Federation released Tuesday.

The Federal Bureau of Investigation has traced money from these infant-formula traffickers back to nations where terrorist groups, such as Hamas and Hizbullah, are active, investigators say. Then, the trail usually goes cold. Once funds enter such countries, there's often no way to track them."

• To read the full article from the The Christian Science Monitor, please click here.
• To visit Deborah Osborne's blog, Analysts Corner, please click here.

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