Combating the Financing of Terrorism

In the 1990s, the interest to the UN bodies responsible for preparing

and implementing strategies to suppress terrorism was framed by the is-54 GA UN resolution 52/164, 15 December 1997.

55 Cf. Gioia, A. „The UN Conventions on the Prevention and Suppression of International Terrorism,” in: International Cooperation in Counter-terrorism: The United Nations and Regional Or-ganizations in the Fight Against Terrorism, Nesi, G., ed., Ashgate 2006, p. 9.

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sues of border protection, trade in arms and explosives, forgery of doc-uments, or incitement to violence. From among this broad spectrum of emerging problems, most attention was attached to the financial support of terrorism. This particular concern with the issue comes from a patently obvious conclusion that the number and gravity of acts of international terrorism depend on the funds at the disposal of terrorists.⁵⁶ Suppression of the transfer of funds to terrorist groups is thus seen as preventing their activity, or at least limiting their operational capabilities.

Initially, to stamp out the sponsoring of terrorism some existing legal measures were invoked laying down the principles of international co- operation developed as a response to money laundering, or the legaliza- tion of proceeds from criminal activities. Today, despite the obvious con-nections between these two phenomena, they are commonly regarded as distinct and that they should be separated under criminal law.⁵⁷ In both cases, the source of funds may be criminal activity, such as kidnapping for ransom, robbery, extortion, murder “by contract,” the smuggling of people across the border, drug trafficking and arms trade. However, the fi-nancing of terrorism also takes lawful forms, and thus cannot be qualified as typical money laundering. These forms include support from the state, donations and contributions from followers (the so-called revolutionary tax), profits from business, charitable, or cultural activity, etc.⁵⁸

In addition to raising funds, an equally important element of the fi-nancing of terrorism is how to secure their transfer to the recipients. To do this, the following measures are used: regular cash turnover, financial institutions (banks, investment funds, insurance companies), and the so-called alternative systems of money transfer (hawala/hundi), employed

56 Cf. Manes, V. „I canali di approvvigionamento finanziario,” in: Terrorismo e crimini con-tro lo stato, Barillaro, M., ed., Milano 2005, p. 87, Rice-Oxley, M. Why Terror Financing Is Tough to Truck Down; the full text available at: www.csmonitor.com/2006/0308/p04s01-woeu.html, The 9/11 Commission Report. Final Report of the National Commission on Terrorist Attacks Upon the United States, p. 169, the full text available at: www.gpoaccess.gov/911/index.html.

57 Cf. Kersten, A. „Financing of Terrorism – A Predicate Offence to Money Laundering?”

EJLR 2 (2002), p. 306, Suppressing the Financing of Terrorism: A Handbook for Legislative Drafting, Legal Department, International Monetary Fund, Washington 2003, p. 49.

58 Cf. Filipkowski, W., Lonca, R. „Kryminologiczne i prawne aspekty fi nansowania terro- Cf. Filipkowski, W., Lonca, R. „Kryminologiczne i prawne aspekty finansowania terro-ryzmu,” WPP 4 (2005), pp. 28-30, Navias, M. S. “Finance Warfare as a Response to International Terrorism,” PQ (2002), pp. 68-69, Stankiewicz, W. “The Development of Nation Function in the Context of Legal Aspects with the Fight of Terrorism,” in: Terrorism as a Timeless Actor on the International Stage, Wojciechowski, S., ed., Poznań 2005, p. 100, Vlcek, W. “A Leviathan Rejuve-nated: Surveillance, Money Laundering, and the War on Terror,” IJPCS 1-4 (2008), p. 25, Wójcik, J. W. Przeciwdziałanie finansowaniu terroryzmu, Warszawa 2007, pp. 80-98.

 The New UN Strategy of Combating Terrorism within a single community and based on tradition and complete trust in the intermediaries, and thus hardly traceable.⁵⁹

The UN’s work on an international agreement tackling specifically the financial support for terrorism was initiated in 1998 by France. The ulti- mate text of the International Convention for the Suppression of the Fi-nancing of Terrorism (hereinafter: the New York Convention (V))⁶⁰ was ad-opted by the General Assembly of the United Nations in resolution 54/109 of 9 December 1999.

Among the legal measures aimed at facilitating international coopera-tion, a noteworthy provision is on the conduct that comprises the financing of terrorism. In accordance with Article 2(1) of the New York Convention (V), any person commits an offence within the meaning of this Convention 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: a) an act which constitutes an offence within the scope of and as de-fined in one of the treaties listed in the annex; or b) any other act intended to cause death or serious bodily injury to a civilian, or to any other person not taking an active part in the hostilities in a situation of armed conflict, when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a government or an international organization to do or to abstain from doing any act. Also, an attempt to commit an of-fence, participation as an accomplice, organization or directing others to commit an offence were criminalized (Article 2 (4-5)).

Of importance was the final agreement on the description of the act whose commission is facilitated by the available or collected funds, i.e.

the “proper” terrorist offence. Besides unquestionable references to the offences named in the sectoral conventions, a general indication in the Ar-ticle 2(1)(b) of the New York Convention (V) of other conduct is a novelty;

this conduct is based on three characteristics: 1) interest protected by law (human life and health), 2) the subject of the attack (civilian or any other person not taking an active part in the hostilities), 3) purpose (to intimi- date a population, or to compel a government or an international orga-nization to do or to abstain from doing any act). This provision is rightly

59 Cf. Alexander, D. C. Business Confronts Terrorism: Risks and Responses, Madison 2004, pp.

69-70, Bolechów, B. “Counterterrorism after 9/11,” in: Terrorism as a Timeless Actor on the Interna-tional Stage, Wojciechowski, S., ed., Poznań 2005, p. 77, Wójcik, J. W. Przeciwdziałanie finansow-aniu, pp. 98-104.

60 The convention entered into force on 10 April 2002 ratified by 167 states.

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seen as introducing, although indirectly, the first definition of terrorism in international law.⁶¹

The New York Convention (V) recommends that each state party take the necessary measures to enable a legal entity located in its territory or organized under its laws to be held liable when a person responsible for the management or control of that legal entity has, in that capacity, com-mitted an offence of financing terrorism. Such liability may be criminal, civil or administrative (Article 5). States should also adopt such measures as may be necessary, including, where appropriate, domestic legislation, to ensure that criminal acts within the scope of the Convention are under no circumstances justifiable by considerations of a political, philosophi-cal, ideological, racial, ethnic, religious or other similar nature (Article 6).

None of such offences will be regarded as a fiscal offence (Article 13) or as a political offence or as an offence connected with a political offence or as an offence inspired by political motives (Article 14). The invoking by the perpetrator of the above conditions cannot therefore underlie the refusal of a request for extradition or for legal assistance.

The catalogue of measures under criminal law aimed to allow the punishment of the perpetrator of the financing of terrorism lists the state obligations known from former international agreements: to establish ju-risdiction (Article 7), to submit the case to competent authorities for the purpose of prosecution or to extradite the perpetrator (Articles 10, 11), to afford mutual legal assistance in connection with criminal investigations, including the non-refusal of a request for legal assistance on the ground of bank secrecy (Article 12) and to cooperate in the prevention of such of-fences (Article 18).