Terrorist Financing via Money Transfer Systems

What is it about?

With the rise of the self-proclaimed Islamic State (ISIS) and the resulting war in Syria and international refugee crisis, the combat of terrorism has, once again, become a major goal for European authorities and legislators. One approach is to interrupt the funding of terrorist organizations. Terrorist financing is a transnational crime —frequently, funds are raised in Europe and then transferred to crisis regions. Thus, most counter the financing of terrorism (CFT) measures focus on the banking sector, which is why offenders increasingly use other transfer methods. Whereas previous literature focuses mainly on the preventive perspective, this article reconstructs how intelligent offenders operate to fly under the radar of law enforcement and prosecutors with a particular focus on so-called money transfer services. For this purpose, a qualitative study of 15 presumed providers of illegal financial services and 15 compliance experts was conducted. Based on the findings of the study, innovative measures in the form of electronic surveillance and an expansion of undercover agents' jurisdiction are suggested.

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