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.