24 May 2017

The ability to raise funds and develop financial networks has been a key strategy of many terrorist organizations. Despite the fact that most terrorist acts are relatively cheap and carried out by individuals, organizations are still developing new ways to make money. Moreover, the rise of the “hybrid terrorist” organization has created an even greater need for funds to supply public goods and enforce territorial control. The widespread use of the internet has also fueled a new wave of differing money flows. New income sources require new advancements in counter financing operations, so that they can advise policy makers on how to fight back against this international issue. From local cells to the capital of the so-called Islamic State, money flow is key to the operations of terrorist organizations. As Abdullah Azzam stated, “Men are in need of Jihad and Jihad is in need of money.”

Typical flows of income pre-911 were defined by private donors and charities that proved a front for more malicious activities. Al-Qaeda, before 9/11, is alleged to have had an annual budget of $30 million provided primarily by the aforementioned methods. Developed and maintained by the wealthy Bin Laden, finance has long been a well-organized and paramount priority for the organization. Connections to central banks in Africa and the Gulf also showed the intricate nature of terrorism fundraising and its far reaching capabilities. Even after 9/11, reports how that AQ still brings in millions of dollars a year despite the best efforts of counter financing officials.

Although officials and the international community have begun the process of cracking down on terror financing, the rise of ISIS has created a plethora of new problems. A combination of classic financing techniques and a few pages out of the organized crime playbook have resulted in the wealthiest terror group in history. From extortion, racketeering, protection money, human trafficking to black market oil deals, the revenue stream is flowing from countless fountain heads into ISIS HQ and their surrounding bases. Officials can do little to limit the sources that arise from territorial control (i.e. natural resources, Iraqi banks) and the taxes they enforce. Limiting money laundering operations and black market deals remains the best option without a commitments from dozens of international actors and the ability of those actors to follow through on limiting their ability to move products. Since the money flow itself has proven difficult to stop, another tactic has been to take out finance ministers, accountants, and the money men of ISIS with drone strikes and targeted killing operations. This change in strategy shows that hitting the financial sector is on a similar level as taking out military leadership.

Reports and intelligence gathered from the field have proven that hitting terrorist networks in their wallets has a direct effect on the group’s ability to recruit, maintain territorial control, and direct operations. Decentralization of the operations may make terrorist groups more difficult to kill militarily, but it hurts the organizations ability to direct the flow of money in the way they see fit. Counter financing officials must continue to pressure these groups with freezing bank accounts, monitoring the rise of social media’s funding capabilities, while developing new techniques to combat the criminal element that has transformed groups like ISIS and Boko Haram into regional powers. Developing these techniques will not only hurt global terrorist groups, but can be utilized by local law enforcement around the world to combat organized crime.