Terrorist Financing

Terrorist Financing

The Failure of Counter Measures

Nick Ridley

For over a decade international efforts by law enforcement, government and financial regulatory authorities have been deployed in combatting terrorist financing, in good faith and with dedication beyond reproach. This book surveys the methods of financing of numerous terrorist groups and organisations – including the Chinese and Asian dimension – and considers why ultimately international efforts to combat the financing of terror are failing. Nick Ridley expertly illustrates the scale of the problem by first outlining the strategies of anti terrorist financing, the pre and post 9/11 differences in scope and extent of terrorist attacks, the financial support and the national and international efforts to implement and carry out countermeasures. He then goes on to set out a detailed analysis of the apparent failure of such counter measures to date.

Chapter 8: The strategic mind-set

Nick Ridley

Subjects: law - academic, finance and banking law, terrorism and security law, politics and public policy, terrorism and security


Two of the causes for the failure of international efforts against terrorist financing, namely, the inherent and varied legal difficulties, and a failure to perceive the full significance of the modus operandi of terrorist financing, have been presented in the previous chapters. The analysis in this chapter will highlight the third cause, which is that of the strategic mind-set of governments and law enforcement intelligence agencies in the field of certain types of financial crime and counter measures against terrorist financing. The delay in accepting the full significance of cash couriers as a potential terrorist financing modus operandi was due to the collective response of international law enforcement and regulatory authorities, as the post-9/11 reaction to terrorist financing was founded upon anti-money laundering principles. Globally, suspicious transaction reporting systems in different jurisdictions fit into one of three models, with variations depending upon the standardization of intelligence received and/or which agency has primacy within the reporting system (discussed further below). The 2001 Financial Action Task Force (FATF) anti-terrorist financing Special Recommendations were formulated under an EU-US transatlantic methodology which, in keeping with the approach at the turn of the twenty-first century, was grounded in anti-money laundering principles.

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