20041007 In Hot Pursuit of Terrorist Funds

So here we have a problem. Where the money used for funding future crime comes from the commission of a previous crime, then counter-money laundering techniques come into play. But where the money comes from clean sources, those techniques simply do not work.

The amount of money needed to build a bomb can be explained away as a birthday present sent from a relative. We are not, here, looking for international transfers of tens of thousands of dollars: we are looking for a few hundred.

Or if the operative is a student, his living expenses sent from home monthly may include an uplift which can be explained as “rainy day” money but is in fact simply a way of accumulating the small amount of money he needs.

It is morally and factually wrong to assume that all Islamic charities are fronts for terrorism but that is the widespread perception of the actions of the USA. Certainly when we examine the names of organisations and persons whose names have been added to the OFAC list and to the UN anti-terrorism list at the behest, largely, of the USA they are massively biased towards inclusion of Muslim names.

However, there is no doubt that charities are used for the purposes of moving goods and money around the world in some cases for the support of terrorists and their families.

First, let’s consider what is money: for the purposes of counter-money laundering laws and anti-terrorist financing laws, we are not only interested in notes and coin. We are interested in how value may be transferred and how assets may be utilised to increase the availability of funds for criminals. And so anything that has value can be considered “money” for this purpose. That value might even be services.

Focussing on the funding of terrorism, what do terrorists need?

A way into the territory where the act will take place
A means of communication
Somewhere to live
Something to eat and drink
Something to do during the period of waiting
Something with which to commit their acts
An exit route

Each of these is, relative to the expenses that the terrorist already has for these items, generally an insignificant additional expenditure.

Let’s imagine for a moment that there is a plan to commit a terrorist bombing in KL.

It costs MYR30 to get a bus from central KL to central Bangkok. From there it costs the equivalent of a few US dollars to get a bus to Phnom Penh or Ho Chi Minh City.

Or to get a bus to Penang costs MYR12 and a high speed ferry to Medan in Indonesia costs MYR100 plus an embarkation fee of MYR6.

So we can discount the cost of travel around this region: people can move around for sums of money that are insignificant.

Tourists are often subject to registration at hotels. But those who choose to stay in hostels or guesthouses often find a lower standard applied. And those who can arrange to stay with a family, renting a room, for example, can avoid formal registration completely. And even right in the heart of KL, it is possible to rent a room for as little as MYR150 per month.

South East Asia’s culture of street food means that people can eat nourishing food for tiny sums of money: it is actually easy for those who put their mind to it to provide a full day’s food for under MYR15 per day – and possible to live on less than MYR10, even in the very heart of KL.

Now, KL is an especially inexpensive city so long as you don’t drink alcohol. But even doubling or tripling these figures means remarkably little spending – and therefore little need for extensive fund raising or funds transmission.

So we are not looking for large amounts of money and – importantly – we are not looking for large amounts of cash or value in transit.