Combatting Financing of Terrorism Open Debate
Tomorrow (28 March), the Security Council will hold an open debate on combatting the financing of terrorism. France’s Minister of Europe and Foreign Affairs Jean-Yves Le Drian will preside and briefers include Under-Secretary-General of the UN Counter-Terrorism Office, Vladimir Voronkov (via video-teleconference), Financial Action Task Force President Marshall Billingslea (the FATF is an international organisation that develops standards for suppressing the financing of terrorism and effectively implementing existing measures to combat terrorism) and Mercy Buku, an expert on terrorism financing and money laundering. The Council is expected to adopt a resolution on the issue during the debate.
The draft in blue, initiated by France, focuses on reiterating existing commitments and strengthening the regime established by resolution 1373 (2001) and supplemented by further resolutions, on criminalising terrorism and the financing of terrorism. The draft emphasises that resolution 1373 obliges states to criminalise the wilful provision or collection by any means of funds with the intention that the funds should be used, or in the knowledge that they are to be used, in order to carry out terrorist acts.
Serious difficulties in the negotiations arose with respect to the obligation to criminalise the funding of terrorism, which paraphrased language previously used in resolution 1373 and 2395 (2017) on the Counter-Terrorism Committee Executive Directorate (CTED). The first draft circulated by France decided, under Chapter VII, that all states shall ensure that their domestic laws and regulations establish criminal offenses sufficiently reflecting the seriousness of wilfully providing funds, financial assets or economic resources or financial or other related services, directly or indirectly, for the benefit of terrorist organisations or individual terrorists for any purpose, including but not limited to recruitment, training, or travel, even in the absence of a link to a specific terrorist act.
There were strong reactions to the draft text from humanitarian and human rights groups, such as the ICRC and Amnesty International, as they viewed the language as restricting humanitarian activities, otherwise permitted under and forming part of international humanitarian law, which requires them to interact with parties to a conflict that may be considered by states as terrorist organisations. Particularly in areas controlled by terrorist groups such as Islamic State in Iraq and the Levant (ISIL) and its affiliates, humanitarians coordinate access and provide assistance through such groups. There was concern that prohibiting the provision of funds “for any purpose”, without clarifying that certain humanitarian situations should be excluded, would encourage some states to refuse humanitarian access and activity on the basis of this resolution.
While several Council members were open to changing the draft text to address this issue, they also saw value in the position of other members, such as Russia and the US, that were less amenable to changes, as they wanted the text to eliminate possible situations of funnelling money to terrorists through non-governmental organisations under the guise of legitimate activities. In addition, member states were also cognisant that similar language had been used in the resolution on foreign terrorist fighters.
Consequently, the draft in blue, while retaining the paragraph, has been modified in an attempt to bridge the gap. The paragraph now says that the criminalisation of financing terrorism shall be done in a manner consistent with states’ obligations under international law, including international humanitarian law, international human rights law and international refugee law. In addition, language was added that such criminalisation was related to terrorist financing “with the intention that the funds should be used, or in the knowledge that they are to be used for the benefit of terrorist organizations or individual terrorists for any purpose”. In addition, the operative paragraph that follows demands that states ensure that all measures taken to counter the financing of terrorism comply with their obligations under international law, including international humanitarian law, international human rights law and international refugee law. This language was previously in the preambular paragraphs.
The draft resolution is also intended to update existing resolutions and adapt them to new forms of financing of terrorism and new challenges in this field. It notes with concern that terrorists may abuse legitimate businesses and non-profit organisations for their activities, and make use of emerging payment methods, such as prepaid cards and mobile payments or virtual assets. It also expresses concern that terrorists make use of information and communications technologies, in particular the internet, to facilitate terrorist acts, as well as their use to incite, recruit, fund or plan terrorist acts.
The draft resolution thus urges states which have not yet done so to establish operationally independent and autonomous financial intelligence units with a view to strengthening their framework to prevent and counter the financing of terrorism. It further encourages financial intelligence units and intelligence services, to continue to establish effective partnerships with the private sector, including financial institutions, the financial technology industry, and internet and social media companies,to identify trends, sources and methods of the financing of terrorism. In addition, while recognising the vital role played by non-profit organisations, it calls on states to conduct a risk assessment of its non-profit sector or update existing assessments to determine the organisations’ vulnerability to terrorist financing and to cooperate with the non-profit sector in order to prevent such abuse, while respecting human rights and fundamental freedoms.
Background and the Open Debate
Adopted in 2001 in response to the 11 September terrorist attacks in the US, resolution 1373 was the first comprehensive resolution imposing obligations on all states to respond to the global threat of terrorism. Resolution 1373 requires states to criminalise terrorist acts, penalise acts of support for or in preparation of terrorist offences, criminalise the financing of terrorism, freeze the funds of persons who commit or attempt to commit terrorist acts, and strengthens international cooperation in criminal matters related to terrorism. Resolution 1373 also established the Counter-Terrorism Committee (CTC) to monitor its implementation. Later on, the Council adopted further resolutions relating to financing and assisting terrorist acts, such as resolution 2178 of 24 September 2014, in which the Council decided that states must prevent and eliminate funding for the travel and activities of foreign terrorist fighters (FTFs). Resolution 2396 of 21 December 2017 further elaborated on this with respect to FTFs returning to their home countries. Additionally, resolution 2347 of 24 March 2017 highlighted the links between the illicit trade in cultural property and the financing of terrorism.
The issue of terrorism has become an urgent priority for France, due to several attacks on French soil in recent years. Seven days after the terror attacks in Paris on 13 November 2015, the Council, at France’s initiative, adopted resolution 2249, which called upon member states to take all necessary measures on the territory under the control of ISIL (Da’esh) and Al-Qaida in order to prevent terrorist acts committed by ISIL and other Al-Qaida affiliates
On 25 and 26 April 2018, France hosted a conference in Paris on the financing of terrorism, titled “No Money for Terror”, with more than 70 countries and 15 international and regional organisations participating. The final statement of the conference expressed the commitment to implement existing Council resolutions effectively and enhance cooperation and coordination of technical and financial assistance for states lacking capacity in this field.
New forms of financing terrorist activities were also addressed, and these were front and centre in an Arria-formula meeting co-hosted by France, Indonesia and Peru, with the assistance of Australia and Tunisia, on “Preventing and Countering the Financing of Terrorism” on 31 January. The panellists were Tom Keatinge, the director of the Centre for Financial Crime and Security Studies at the Royal United Services Institute for Defence and Security Studies (RUSI); Michèle Coninsx, Assistant Secretary-General and Executive Director of CTED; Guillaume Michelin, Substitut du Procureur, Tribunal de Grande Instance de Paris (via video teleconference); John Carlson of the FATF (via video teleconference); and Jody Myers, vice president of global compliance risk assessment at Western Union.
The discussion revealed significant gaps in member states’ implementation of Council resolutions on the financing of terrorism. The various ways in which terrorists fund their activities were also raised, including the abuse of legitimate businesses and non-profit organisations and the misappropriation of charitable funds, extortion of local populations, organised crime, and new forms of financial activity such as crowdfunding, mobile payment services and crypto-currency. The importance of engaging with the private sector was discussed, as was the need to develop and implement financial intelligence capabilities to trace money used for terrorism and also anticipate and prevent terrorist attacks. Issues of lack of compliance with resolution 1373 and related resolutions, new technologies being utilised by terrorists to gain funding and the lack of capacity by some member states to implement these resolutions given the knowledge and resources needed to address the financing of terrorism through these technologies are likely to be highlighted by Council members during the open debate
Voronkov may address the work of his office in coordinating UN efforts on the financing of counterterrorism and in building state capacity in this regard. Billingslea is likely to address the work of the FATF in developing standards, particularly its recommendations on money laundering and the financing of terrorism and proliferation of weapons of mass destruction, last updated in 2012. He may also address the FATF’s observations on the implementation of measures to combat the financing of terrorism by member states and its work to identify national vulnerabilities affecting international financial systems. Buku may share some of her own experience as a consultant in compliance and anti-money laundering in the digital payments and banking sector.