Terrorism and Money Laundering


By Noor Alam Khan, Advocate, Peshawar

The international community is slow to formulate a universally agreed upon, legally binding definition of "terrorism". There is no consensus regarding the definition of the "terrorism". Various Governments and legal systems use different definitions of "terrorism". These difficulties arise from the fact that the term "terrorism" is politically and emotionally charged. Terrorism is damage of people or property of local as well governmental, by the people not acting according to law of the country, and for the purpose of redressing an imaginary injustice attributed to an established government and aimed directly or indirectly to defeat an established government. The established governments observe terrorist activity as terrorism. Terrorists themselves see it as war - war against an enemy, an oppressor, war for freedom, justice, etc. Indeed, they see themselves as on a rightful path, fighting for their lawful rights. They pursue their wars by destroying people and property.

"Terror" is used as a sign of horror, shock or hatred, is known to human society and civilization since times immemorial but "terrorism" as an `ism' or an articulated pattern of thought and activity. Test to determine whether a particular act is "terrorism" or not, is the motivation, object, design or purpose behind the act and not the consequential effect created by such act. Terrorism, in this context has to be understood as a species different and apart from terror, horror, shock, fear, insecurity, panic or disgust created by an ordinary crime. Therefore, word 'Terrorism', inter alia would mean the use or threat of action, where use or threat was designed to coerce and intimidate or impress the government or the public; or a section of public or community; or sect or create a sense of fear or insecurity in society; and would create a serious risk to safety of the public or a section of public; or was designed to frighten the general public and thereby prevent them from coming out and carrying on their lawful trade and daily business; and disrupt civil life. So a person who has committed an offence of terrorism as defined above or who has been concerned in the commission, preparation or instigation of acts of terrorism is called "terrorist".

Money laundering means the concealment of money of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from serious crime. The money launder,

--- needs to conceal the true ownership and origin of the proceeds;

--- he needs to maintain control of the proceeds; and

--- he needs to change the form of the proceeds.

It is also mean the crime of moving money that has been obtained illegally through banks and other businesses

to make it seem as if the money has been obtained legally. Money laundering is the process by which large amounts of illegally obtained money (from drug trafficking, terrorist activity or other serious crimes) is given the appearance of having originated from a legitimate source. Money laundering plays a fundamental role in facilitating the ambitions of the terrorist. And every civilized country has made the fight against money laundering and the financing of terrorism which is a main concern.

Terrorist financing involves the illegal gain of funds, with the intention that they may be used to support terrorist acts or organizations. This fund is received from illegal source. To overcome the illegal transfer of funds, the United Nations has also passed an "International Convention for the Suppression of the Financing of Terrorism" with the aims to facilitate the prosecution of persons accused of involvement in the financing of terrorist activities, by obliging States parties to prosecute them or extradite them to another State that has established its jurisdiction to try them. It also requires States parties to take a number of measures to prevent and counteract the financing of terrorism. This Convention, is therefore, broader in scope than earlier so-called sectoral counter-terrorism conventions, in that it does not relate to certain specific types of terrorist acts, but rather seeks to prevent such acts by "drying up" their sources of financing. According to this convention, a person commits the crime of financing of terrorism "if that person by any means, directly or indirectly, unlawfully and wilfully, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out" an offence, within the scope of the Convention. Moreover, according to the Vienna Convention and the Palermo Convention provisions on money laundering describes three ways that are: (i) the conversion or transfer, knowing that such property is the proceeds of crime (ii) the concealment or disguise of the true nature, source, location, disposition, movement or ownership of rights with respect to property, knowing that such property is the proceeds of crime; and (iii) the acquisition, possession or use of property, knowing, at the time of the receipt, that such property is the proceeds of crime.

In terrorism and money laundering the criminals make an illegitimate use of the financial sector. The techniques used to financial support for terrorism are very similar and in many instances are identical. An effective anti-money laundering/counter financing of terrorism framework must, therefore, address both risk issues: it must prevent, detect and punish illegal funds entering the financial system and the funding of terrorist individuals, organizations and/or activities. Therefore, efforts should be made to identify the various components of the criminal or terrorist network. This implies to put in place mechanisms to read all financial transactions, and to detect suspicious financial transfers. The primary goal of individuals or entities involved in the financing of terrorism is, therefore, not necessarily to conceal the sources of the money but to conceal both the financing and the nature of the financed activity.

Acquiring of funds i.e. money and property of others is the vital purpose of every serious criminal. These assets are also the main source of criminal activities and also stimulate for further crime. In the case of the terrorist, funds are acquired not as an end in itself, but to achieve political ends by aggressive means. In either case, tracing of the funds may be a way of identifying the criminal, recovering the proceeds, and preventing further criminal acts. The laundering of money, camouflage its source and giving it an atmosphere of propriety. It plays an essential part in serious and organized crime; from which it follows that the combating of money laundering plays an equally important part in the fight against organized crime, and to defeat the financing of terrorism.

Many of the methods applied by criminals for terrorism (financial support) and money laundering for the transfer of funds to achieve their hidden desires. Financial institutions, in particular banks, are most vulnerable to abuse for that purpose. In order to protect themselves, it is essential that financial institutions have adequate control and procedures in place that enable them to know the person with whom they are dealing. Adequate due diligence on new and existing customers is a key part of these controls.

Hundi system of transfer of money on the performance and honour of a huge network of money brokers, which are located in all the world specially in the Middle East, North Africa, the Horn of Africa, and South Asia. It is basically a parallel or alternative remittance system that exists or operates outside of, or parallel to traditional banking or financial channels. This type of system is, also a type of money laundering, also helpful for the terrorist and their transfer of funds to achieve their goals.

The international community is going to fight against terrorism and money laundering. Among the goals of this effort are: protecting the integrity and stability of the international financial system, cutting off the resources available to terrorists, and making it more difficult for those engaged in crime to profit from their criminal activities.

In the last, I would say that it is impossible to stop terrorism by killing or punishing terrorist leaders. As long as the cause of terrorism such as financial support remains, new terrorist leaders appear and replace those killed or punished. The killed terrorist leaders become symbols, martyrs, saints and role models for their followers. Occasional terrorist incidents become regular and increasingly frequent part of daily life, until they reach the proportions of a full-scale civil war. All of it is happened when financial gain (by money laundering) and support is going on. The efforts should be made to control financial support. Because on the way of spreading terrorism is the money laundering. When there should no funding then there will be no way for a terrorist to purchase arms and ammunition.

It is a high time that person(s) on helm of affairs should take concrete steps to eradicate this nuisance from our society and make such laws, and of course implement them in letter and spirit, in whose presence the terrorist(s) find the act of terrorism a hard nut to crack rather than easy pickings.

© 2020 PakistanLaw.pk, All rights reserved.