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Law Enforcement Seeks to Destroy Terrorist Funding Sources

Law Enforcement Seeks to Destroy Terrorist Funding Sources

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By Dr. Jarrod Sadulski
Faculty Member, Criminal Justice, American Military University

There are many different initiatives in place to combat terrorism on a national and global scale. Some examples of these initiatives include intelligence analysis, critical infrastructure protection, counter-terrorism fusion centers, and the global war on terrorism, which has led to the deployment of troops around the world.

Another critical aspect of combating terrorism is investigating how terrorist organizations fund their operations to carry out their attacks. So, it is important to understand how these organizations get their funding, which has implications for law enforcement’s criminal investigations and for international stakeholders, such as foreign nonprofit organizations and private businesses that may be inadvertently and unknowingly affected by complex terrorism funding operations disguised as legitimate business transactions

Terrorist group funding is often associated with activities commonly used by traditional criminal organizations and gangs, such as narcotics trafficking, weapons trafficking, human trafficking, extortion, and kidnappings. However, unlike traditional criminal organizations, terrorist groups often receive funding from sympathetic followers, including rogue nations.

Terrorist Funding May Be State-Sponsored from Nations that Support Their Illegal Activities

Terrorist organizations’ funding may be state-sponsored from nations that support their illegal activities. One example is Hezbollah, which has an annual income of $1.1 billion. Hezbollah is involved in an armed conflict against Israel and is linked to the establishment of the Islamic-Shiite state in Lebanon. Hezbollah funds its activities through the narcotics trade and with financial aid from Iran, which is recognized by the U.S. State Department as a state sponsor of terrorism.

ISIS has lost significant territory it once held, in its strengths as a terror organization, and in its finances. At one point, Forbes ranked ISIS first on its list of the “World’s 10 Richest Terrorist Organizations.”

At the Peak of Its Power, ISIS Received about $3 Billion in Annual Revenue

When ISIS was at the peak of its military and political power, Forbes estimated that ISIS received around $3 billion in annual revenue. To increase its revenue, ISIS engaged in oil, extortion, and its own form of taxation. In addition, ISIS engaged in ransom payments, protection payoffs, and bank robberies, Forbes added.

ISIS also has resorted to violence to support its extortion and taxation efforts. It has imposed taxes on public roads, electricity, water, and communications to extort money.

Another terror group with significant income is the Kurdistan Workers’ Party. The KWP is estimated to have an annual income of $180 million, primarily from the heroin and cannabis drug trade. Forbes cites British intelligence as estimating that the KWP is responsible for 40% of the heroin trafficked in European Union countries.

Law Enforcement Is Watching Terrorist Funding Transactions Using Cryptocurrencies

Law enforcement agencies are also watching terrorist funding transactions using cryptocurrencies, such as Bitcoin. By using cryptocurrencies, terrorist organizations can remain unknown to law enforcement and layer their funds through various privacy coins and storage programs such as crypto wallets. This creates an auditing challenge because funds can be transferred between accounts anonymously.

While a challenge, cryptocurrency is on law enforcement’s radar. For example, the FBI spends around 75% percent of its financial crime-related time conducting investigations associated with cryptocurrency.

It is important to understand terrorism funding because disrupting this activity can have a significant impact on reducing terrorist operations. Counter-terrorism intelligence fusions centers in the United States and abroad are essential in tracking and investigating terrorism funding.

Through the National Strategy for Combating Terrorist and Other Illicit Financing, the U.S. government utilizes law enforcement resources, financial sanctions, and other financial activities to identify and dismantle terrorist funding operations. To be fully effective in combatting terrorism funding, it is important for U.S. law enforcement to work with the private sector and its international partners.

About the Author

Dr. Jarrod Sadulski has been involved in homeland security for over two decades and he is an associate professor at American Military University. He also has local law enforcement experience in two local law enforcement agencies where he was a member of the agency’s Crime Suppression Squad and was the agency’s Officer of the Year. Currently, he serves as a Sworn Reserve Deputy at a sheriff’s office in Southwest Florida. His expertise includes infrastructure security, maritime security, homeland security contraband interdiction and intelligence gathering. Jarrod was selected as the Coast Guard’s Reserve McShan Inspirational Leadership Award recipient for 2019.

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