Terrorist financing: foxes run to ground

Pages301-305
DOIhttps://doi.org/10.1108/13685200310809617
Date01 October 2003
Published date01 October 2003
AuthorDavid D. Aufhauser
Subject MatterAccounting & finance
ANALYSIS
Terrorist Financing: Foxes Run to Ground
David D. Aufhauser
A great deal of ink has been spilled over the subject of
terrorist ®nancing during the past several weeks. A
UN monitoring report was widely touted for the
unremarkable conclusions that the task is challenging
and that the likes of al-Qaeda are still a threat to the
US community. Other reporting has suggested that
the ®nancial underwriters of terror have taken
refuge in untraceable precious stones and metals,
thereby defying all convention of identi®cation,
location and capture.
But the report, and all such stories, mistake di-
culty for lack of purpose and box scores for lack of
eect. What is missing is an appreciation of a baseline
and the dynamic nature of the ¯ow of capital. An air-
line ticket cannot be bought with gold. Platoons of
child killers cannot be propelled around the globe
carrying satchels of cash. People cannot plant them-
selves for years at a time in a foreign land without
establishing a footprint of the source of their funding,
and the apparent intention of their malice.
Indeed, even if that footprint is counterfeit, it is
revealing. At least, as long as people are watching.
And, of course, they have begun to watch.
There is more than a modest reason to smile if the
product of new found diligence is retreat by would
be bankers of terror from 21st century digitised com-
merce into an awkward, cumbersome, Neanderthal
economy of lugging gold bullion across mountain
borders under cover of night. It cannot be doubted
that such value transfers occur today as they have
since the beginning of time, but they do not de®ne
the threat that requires response. There is, in fact,
no border in a war that places a premium on the
death of civilians and the domination of faith.
But even infamy requires logistical support. And
that is what explains the high pro®le of money in
the campaign against terrorism. Terror cannot be
exported eectively without exploiting the means
of modern electronic transfer. At some juncture Ð
be it collection, recruitment, training, transport,
housing, planning or execution Ð terrorist ®nancing
will intersect with the recorded ®nancial system. The
challenge over the past year has been to structure an
international regulatory regime that reduces the
opportunity for access, yet divines means for
identifying when the system has been penetrated
with terrorist design.
This is dicult to acknowledge. Last year the
promise of decades of work on money laundering
was silenced by the assault on New York and
Washington. It seemed as if the world had been
observed through the wrong end of a telescope.
Money had been spirited around the globe, by
means and measures and in denominations that
mocked detection. The more immediate threat to
well-being was `clean' money intended to kill, not
illicit proceeds of crime looking for a place to hide.
The job was now prevention, not crime-busting.
It seemed probably that the Treasury Department
would do the orthodoxy in war: collect revenues, sell
war bonds and send money across the river to the
Pentagon. But this is a profoundly uncommon war.
There is no known sovereign; no uniformed army;
no hill to take; no target that is out-of-bounds. It is
shadow warfare and the primary source of the stealth
and mobility necessary to wage it is money. It is the
fuel for terror's enterprise. It is also, however, its
Achilles' heel. It leaves a signature.
Much of the intelligence of war is, in fact, suspect
Ð the product of treachery, deceit, custodial inter-
rogation, bribery and encrypted talk. But audit
trails do not lie. They are diaries of terror. And
they reveal the secrets necessary to stem tithes
intended to underwrite acts of terror.
Detecting that `giving' is a daunting task. It
requires extensive international cooperation, an
extraordinary display of civic responsibility by the
world banking community and regulatory regimes
that do not sacri®ce focus in the interest of the
appearance of being comprehensive.
Indeed, the world economy is a deliberately open
and porous one, designed to encourage the free
¯ow of capital, investment and economic develop-
ment. To elect rules that intrude on that dynamic is
Page 301
Journal of Money Laundering Control Ð Vol. 6 No. 4
Journalof Money Laundering Control
Vol.6, No. 4, 2003, pp. 301± 305
#HenryStewart Publications
ISSN1368-5201

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