30 Jan 2017
More needed to stop terrorism financing
By Simon Norton and Paula Chadderton
When Turkish police arrested Abdulkadir Masharipov, the man suspected of committing the terrorist attack that killed 39 people in an Istanbul nightclub on New Year's Eve, they found he had $US197,000 ($261,000) in cash, two guns, and drones. In a related raid, Istanbul police discovered another $US150,000 that they think was intended for Masharipov's use.
These are significant amounts of money: $US347,000 can provide a terrorist in most places with the means to sustain themselves and potential collaborators, and buy weapons to use in attacks. The discoveries are a reminder not only that money is vital to terrorism, but of the important role counter-terrorism financing (CTF) measures can play in preventing terrorist attacks.
Disrupting and denying terrorist financing makes it harder for terrorist groups to equip themselves, conduct their operations and attract new members. CTF measures also provide intelligence to support the disruption efforts of police. So how's Australia doing on this front? Overall Australia's system is robust but it could be enhanced and strengthened. The area requiring most urgent reform is timely information sharing about terrorism-financing risks. While some restrictions on information are necessary, currently too many barriers exist.
The Australian government recognises this. The April 2016 review of the Anti-Money Laundering and Counter-Terrorism Financing Act (AML/CTF Act) found the Act's secrecy and access provisions "are overly complex and impede information-sharing". It recommended developing a simplified model to enable AUSTRAC – Australia's financial intelligence unit – to share more information more often with public and private stakeholders.
Terrorism financing's evolving nature means government agencies must look beyond those traditionally associated with law enforcement and intelligence to do this: so the private sector can't be precluded from sharing information where terrorism is suspected.
Currently the private sector can only receive limited information from law enforcement despite being on the frontline of CTF efforts. Financial service providers, gambling and bullion dealers must report suspicious activities to authorities. To do this effectively, they need information about terrorism and terrorism financing risks and trends from government agencies.
Law enforcement and intelligence agencies should release more de-identified terrorism-financing case studies to help the private sector better identify new methods and suspicious activity indicators. Case studies that are co-authored by law enforcement, intelligence agencies and the private sector would also be valuable to alerting and informing the broader public of developing trends in terrorism financing methods.
To facilitate expanded information sharing, terrorism-financing laws also need reform. The first priority is enhancing law enforcement and intelligence agencies' ability to share information with trusted private sector partners. And it's also needed to enable private sector companies to better share information about suspicious activity amongst themselves.
Right now, when the private sector detects suspicious activity, its ability to share such information is heavily restricted. For example, the AML/CTF Act prevents companies from sharing information about suspicious customer transactions that have been reported to authorities with companies outside their group, and in some circumstances within their own group. These restrictions need to be modified. Companies must be allowed to share information about terrorism financing both within their own company and with others in the sector.
Policymakers should also think creatively about new initiatives that allow government, the private sector, and international partners to better collaborate and share information about terrorism and terrorism financing in a trusted environment.
Many examples exist domestically and internationally that could provide a model. For example, in Australia, taskforces focusing on particular law enforcement issues (such as Project Wickenby's efforts to fight tax evasion) have proven very effective. And cyber security information sharing initiatives, such as CERT Australia, are well advanced.
To date, Australian law enforcement has been very successful in disrupting terrorist plots. However we shouldn't be complacent. The challenge of terrorism and its financing is constantly evolving.
Many in government and the private sector already hold important terrorism related information. More needs to be done to better allow this information to flow so that terrorist attacks continue to be detected, disrupted and their funding denied.
Simon Norton is an analyst and Paula Chadderton a visiting fellow at the Australian Strategic Policy Institute. They are the authors of a new ASPI report, Detect, disrupt and deny: Optimising Australia's counterterrorism financing system.
Originally published: Sydney Morning Herald. 27 Jan 2017