Counter‐terrorist finance in the UK. A quantitative and qualitative commentary based on open‐source materials
| Published date | 12 October 2010 |
| DOI | https://doi.org/10.1108/13685201011083858 |
| Date | 12 October 2010 |
| Pages | 315-335 |
| Author | Peter A. Sproat |
| Subject Matter | Accounting & finance |
Counter-terrorist finance in the UK
A quantitative and qualitative commentary
based on open-source materials
Peter A. Sproat
Centre for Criminal Justice and Police Studies,
University of the West of Scotland, Hamilton, UK
Abstract
Purpose – Few articles have been published on counter-terrorist finance (CTF) policies in the UK and
fewer still have attempted to evaluate their effectiveness. This paper seeks to examine both
quantitative and qualitative aspects of the UK’s CTF policies from open-source materials and in doing
so considers the credibility of many of the claims by those who have attempted to evaluate their
effectiveness in light of the data gathered.
Design/methodology/approach – The paper presents an analysis of the UK’s CTF regime.
Findings – There have been just over 100 convictions under terrorism legislation offence in Great
Britain alone since 11 September 2001 resulting in at least ten individuals being convicted of a CTF
offence. In terms of assets frozen or seized, Robinson appears to have a point when he argued that:
“when you look closely at those frozen assets, you discover that most of them have been unfrozen”,
given the tens of millions of pounds returned to the Afghan Government.
Originality/value – This paper will be of interest to academics, politicians, practitioners interested
in the use of CTF policies.
Keywords Terrorism, Finance,United Kingdom
Paper type Research paper
The UK’s CTF regime
The Terrorism Act 2000 contains four main counter-terrorist finance (CTF) offences,
namely:
(1) Fund raising. Section 15 makes it an offence to provide, receive or invite another
to provide, money or other property with the intention that it be used for
terrorism or to do so when holding reasonable cause to suspect that it maybe used
for the purposes of terrorism. Here, it is worth noting that s. 14 defines “terrorist
property” as: “property wherever situated and whether real or personal, heritable
or moveable, and things in action and other intangible or incorporeal property”.
(2) Use and possession. Section 16 makes it an offence for a person to possess
money or other property when one has reasonable cause to suspect that it
maybe used for the purposes of terrorism or when one intends that it should be
used for such purposes. It is also an offence to use it for the purposes of terrorism.
(3) Funding arrangement. Section 17 makes it an offence to enter into or become
concerned in an arrangement to make money or other property available to
another person while knowing or having reasonable cause to suspect that it is to
be used for the purposes of terrorism.
(4) Laundering. Section 18 makes it an offence to become concerned in an
arrangement which facilitates the retention or control of terrorist property by or
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Counter-terrorist
finance
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Journal of Money Laundering Control
Vol. 13 No. 4, 2010
pp. 315-335
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DOI 10.1108/13685201011083858
on behalf of another whether this is done by concealment, removal from the
jurisdiction, transfer to nominees or in any other way.
The penalty for each of these main offences can be a fine and/or a prison sentence of up
to 14 years. In addition to treating those who commit these acts as terrorists, the UK’s
CTF legislation has created crimes of omission by imposing positive legal duties on
particular people, the penalty for which can be up to five-year imprisonment and/or a
fine. These consist of:
.Failure to report. Section 19 makes it an offence for anyone to fail to report to a
constable (in practice usually the UK’s Financial Investigation Unit (FIU) based
in the Serious and Organised Crime Agency (SOCA)) as soon as is reasonably
practicable a suspicion that someone has committed one of these CTF offence
where this information has come into their possession as part of their trade,
profession, business or employment. They must also report the information on
which their suspicion is based (Haynes, 2008, p. 308)[1].
.Tipping off. Section 19 also makes it an offence for anyone in the regulated
financial sector (see Schedule 3 of the Money Laundering Regulations) to
disclose information to another which is likely to prejudice an investigation or
interfere with material which is relevant to such an investigation where there are
reasonable grounds to suppose that the police are conducting or proposing to
conduct a terrorist investigation (Haynes, 2008, p. 308)[2].
The main impact of all of this is that the regulated sector reports their suspicions of
terrorist financing to the SOCA. The sending of so-called Suspicious Activity Reports
to the authorities is therefore known as the “SARs regime”. All SARs relating to
suspected terrorist financing, whether reported to the national FIU under the
Terrorism Act 2000 or the Proceeds of Crime Act (PoCA) are passed on to the specialist
team within the UK’s FIU – the Terrorist Financing Team (SOCA TFT) – to assess
whether further action is required. If the review reveals further action maybe required
the SARs-based intelligence package is disseminated to the National Terrorist
Financial Investigation Unit (NTFIU) based in the Metropolitan Police and/or direct to
the appropriate regional Counter Terrorist Unit (CTU)/Counter Terrorist Intelligence
Unit (CTIU). The NTFIU undertakes or co-ordinates terrorist finance enquire s to
develop both intelligence and evidence. Presently, the NTFIU has a total strength of
approximately 80 full time staff made up of police officers and civilian police staff
supplemented by secondments from regional police forces, law enforcement and
government agencies. The regional CTU/CTIU’s now have permanent financial
investigators carrying out their own enquiries, tasked direct by the security service,
independent of NTFIU.
Schedule 6 of the Terrorism Act 2000 enables law enforcement agencies to obtain
the otherwise private financial details of those suspected of CTF offences by use of
investigative powers if authorised by the judiciary. The latter consists of:
.Customer Information Orders. These enable law enforcement agencies to obtain
information on a named or described individual from a financial institution.
The information that can be obtained includes: a customer’s account number,
their full name and address (or former address), date of birth, the account
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