Emerging Foreign Terror Fighters Fundraise on Social Media Risks
Foreign terrorist fighters need small amounts of money to support their activities, and they raise it in a variety of ways, from self-funding to social media, crowdfunding campaigns and tech-based payment services, according to a research report.
The report, issued Wednesday by the Financial Action Task Force, builds on the international body’s earlier research into the fundraising mechanisms of Islamic State. This report, however, is broader, exploring various financing mechanisms and the financial management practices used by both individual terrorists and terror organizations. All terrorists and terror groups, especially the large organizations, require a financial management strategy to allow them to obtain, move, store and use their assets, the FATF said.
Threaded throughout the report were more than two dozen case studies, including a Canadian example of crowdfunding for terrorism-related travel and a Saudi-sourced example of Islamic State-linked individuals seeking donations via Twitter and then asking those donors, via Skype, to transmit numbers on purchased prepaid cards for eventual sale by the group.
“Understanding these financial management strategies is essential in developing effective measures [against] terrorist financing,” the body said in a statement.
While identifying traditional methods of terrorism finance, such as kidnapping for ransom, private donations or laundering the proceeds of criminal activity, the report also explored emerging risks associated with foreign terrorist fighters, whose funding needs are more modest.
Because foreign terrorist fighters typically only require money for transportation, accommodations for travel and other living expenses, they can fund themselves, or receive money from family who unwittingly finance terrorism, the FATF report said.
Organizations are using social media to disseminate their propaganda and raise money, the report said, exploiting opportunities found across peer-to-peer horizontal networks. The FATF identified crowdfunding as an emerging terrorism-finance risk, saying its ease of use makes the technology vulnerable to exploitation for illicit purposes, including instances where the true reason for funding campaigns is masked.
“Individuals and organizations seeking to fundraise for terrorism and extremism support may claim to be engaging in legitimate charitable or humanitarian activities, and may establish [nonprofits] for these purposes. Several cases indicate that the end-use of funds collected through crowdfunding and social networks was not known to donors,” the report said.
Terrorism-finance methods continue to evolve with technology, the report said, to more easily evade capture by law enforcement. The FATF identified a variety of electronic, online and new-payment methods posing vulnerabilities that “may increase over the short term” as overall use grows. Many of them can be accessed globally and can be used to move funds quickly; a number of them are anonymous by design, making them attractive for terrorism financiers, the report said.
Much of this evolution, however, is “unremarkable,” the FATF said, because it reflects the habits of those making the transactions, many of whom are between 21 and 35 years old.
“The use of an online payment system to assist in financing terrorism is more a reflection of the prevalence of this payment system in the wider financial system rather than any indication that online payment systems are more vulnerable to terrorism financing,” the report said.
Write to Samuel Rubenfeld at Samuel.Rubenfeld@wsj.com. Follow him on Twitter at @srubenfeld.
The Emerging Terrorist Financing Risks report, the result of the call for further research into terrorist financing, provides an overview of the various financing mechanisms and financial management practices used by terrorists and terrorist organisations. It explores the emerging terrorist financing threats and vulnerabilities posed by foreign terrorist fighters (FTFs), fundraising through social media, new payment products and services, and the exploitation of natural resources.
The terrorist financing risks identified in the FATF’s 2008 Terrorist Financing report, while still evolving, are as relevant today, as they were back then. However, developments since 2008 have created new terrorist financing risks.
The issue of FTFs is not a new phenomenon, but the recent scale of the issue in relation to the conflict in Syria and Iraq is disturbing. FTFs are now considered one of the main forms of material support to terrorist groups. This report sets out the funding needs, sources and methods of FTFs and the challenges associated with combatting them.
New technologies have also introduced new terrorist financing vulnerabilities. The broad reach and anonymity associated with social media and new payment methods could make these attractive tools for terrorists and terrorist organisations to use in their financial activities.
All terrorists and terrorist groups, particularly large terrorist organisations, will require a financial management strategy to allow them to obtain, move, store and use their assets. Understanding these financial management strategies is essential in developing effective measures counter terrorist financing.
This report is not a comprehensive study but rather, aims to provide a snapshot of current terrorist financing risks to raise awareness among FATF members and the private sector. Many of the issues raised in this report require further in-depth research.
The report highlights the importance of genuine private/public partnerships to enhance awareness of, and responses to, emerging terrorist financing risks. Such a partnership will facilitate the identification of FTFs and their facilitation networks. Accurate and forward-looking guidance to the private sector, will further improve their monitoring and screening processes and reporting-time on sensitive transactions which may relate to terrorist financing.