Ben Brandon, a partner at the London law firm Russell Jones & Walker who specialises in UK and international criminal law, reviews international initiatives againist terrorist financing. Article published in Amicus Curiae - Journal of the Society for Advanced Legal Studies. The Journal is produced by the Society for Advanced Legal Studies at the Institute of Advanced Legal Studies, University of London

Brandon, Ben

English

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Article20Amicus Curiae Issue 47 May/June 2003INTERNATIONAL LAW ANDINTERNATIONAL TERRORISMUntil recently, the collective response of theinternational community to the threat ofinternational terrorism has been limited andlargely ineffective. Individual states have regardedterrorism as either an internal security issue, or haveresponded by using force against other states believed to beresponsible for harbouring or supporting terrorists.Coercive strategies to combat international terrorism arealmost always controversial, and there is frequently anelement of doubt as to whether such actions are lawful.Having said this, it is not an easy task to identify strategicalternatives to the use of force in the fight againstinternational terrorism before the mid 1990’s. Politicalinitiatives were few and far between. Peaceful strategiesusing the institutions and instruments of international lawwere visible, but of doubtful efficacy.The lack of any coherent non-coercive internationalstrategy to combat terrorism can be attributed to twofactors. First, the paralysis of the international law makingcommunity during the Cold War. Secondly, armedstruggles for national liberation in the developing world ledto an ideological conflict between North and South overthe legitimacy of independence movements, and the tacticsthey employed. These two factors inhibited the emergenceof any shared concept of what terrorism meant, or who theterrorists were.Despite these difficulties, the international communityhad made some effort to respond peacefully to the threatof terrorism. The first of a series of internationalconventions that sought to encourage international co-operation to deal with aircraft hi-jackings was concluded in1963. This limited treaty making activity, which addressedspecific terrorist acts whilst avoiding the need to agreeupon a definition of terrorism, continued throughout theCold War.With the fall of the Soviet Union, and as the ideologicalconflicts of the national liberation era were replaced withmore contemporary concerns, the obstacles to developingan effective and peaceful international response to counterterrorist activity began to fall away.International lawmakers, already well versed in theintrumentalities of combating drug dealers and organisedcrime, saw advantages in using anti money laundering andanti-racketeering techniques developed by the lawenforcement community in their fight against terrorism.Terrorist activity was increasingly regarded as being both aninternational crime, and linked to other kinds of criminalactivity. Agreed definitions of terrorism, previouslyexclusive to domestic law, began to emerge frominternational institutions.This article examines the record of international andregional law makers and the programme of the FinancialAction Task Force both pre and post September 11. It willdemonstrate that innovative criminal justice strategiespreviously used to attack the profits of criminal cartels arenow an essential part of the international community’scollective response to international terrorism. It concludesthat although valuable, such strategies possess seriousshortcomings, and should not be the only peacefulresponse deployed in the “war against terror”.INTERNATIONAL RESPONSE PRESEPTEMBER 11Although the term terrorism has been part of ourpolitical vocabulary since the 1790’s, attempts to reach aninternationally agreed legal definition have consistentlyended in failure. The first definition, approved by theLeague of Nations in 1937, was rejected by theinternational community. Only 24 states signed therelevant treaty and none ratified it.The United Nations confined itself to concluding aseries of treaties that addressed specific categories ofPeaceful strategies inthe “War againstTerror”by Ben BrandonThe author reviews recent international initiatives againstterrorist financingterrorist acts, such as attacks on civilian aircraft, the takingof hostages and attacks on ships.These UN sponsored anti-terrorist treaties share anumber of common features. They all require states tocriminalise particular offences, and promote prosecutionor extradition mechanisms to ensure that no personsuspected of having committed an offence covered by atreaty can find refuge in the territory of another state party.The pre-September 11 anti-terrorism conventions alsoshare a number of weaknesses. They have no effectiveenforcement provisions. If a state refuses to abide by itsobligations under a treaty, other states cannot enforcecompliance. There is also no international court to try theoffences created by the pre-September 11 treaties in theabsence of domestic justice. Even the new InternationalCriminal Court does not have jurisdiction over the specificoffences created by these conventions.There are other problems. Insufficient numbers of statesare parties to the relevant treaties. Several states, which areconsidered by the West to harbour terrorists, have takenmany years to ratify anti-terrorist conventions, or simplynot signed up to them at all.Prior to September 11, no international treaty in forcecontained a general definition of terrorism, or addressedthe issue of the financial support given to terrorists orterrorist organisations. However, change was in the wind.The seeds of this change appeared in two GeneralAssembly Resolutions of 1994 (Res 49/60) and 1996 (Res51/210). The latter Resolution calls upon all states;“To take steps to prevent and counteract, through appropriatedomestic measures, the financing of terrorists and terroristorganisations…[and] in particular to consider, whereappropriate, adopting regulatory measures to prevent andcounteract movements of funds suspected to be intended forterrorist purposes.”Following an initiative by the French PermanentRepresentative, The International Convention for theSuppression of the Financing of Terrorism opened forsignature at the UN in January 2000. The FinancingConvention contained, for the first time, an internationallyagreed definition of terrorism. It also contained a range ofprovisions attacking the sources and means of financialsupport for terrorist organisations.FINANCIAL ACTION TASK FORCE PRESEPTEMBER 11The link between terrorist and other criminalorganisations whose success and longevity depends onfinancial support and laundering the proceeds of crime wasnot made explicit by the FATF before September 11. TheFATF “Forty Recommendations” makes no mention ofterrorist financing, and concerns itself with “provid[ing] acomplete set of counter-measures against moneylaundering covering the criminal justice system and lawenforcement, the financial system and its regulation, andinternational co-operation”THE REGIONAL RESPONSE (EU) PRESEPTEMBER 11The only regional treaty in force in Europe prior toSeptember 11 was the 1977 European Convention on theSuppression of Terrorism. This Convention shares many ofthe weaknesses of its international counterparts. Crucially,it does not contain any definition of terrorism. The mainpurpose of the Convention appears to have been anattempt to strike out the effect of the political offenceexception contained in most extradition arrangementsbetween contracting states.The European community’s initiatives against moneylaundering were more sophisticated. The principal sourceof European law on the subject before September 11 wasthe 1991 EU Money Laundering Directive. The Directivecontains familiar measures to combat money laundering,including client identification, reporting, tipping off, andimmunity from suit provisions.European lawmakers clearly intended that whilst drugrelated crimes would constitute the majority of predicateoffences in domestic law, terrorism would be included inthe designation of criminal activity in domestic legislation,as the preamble to the Directive notes:“since money laundering occurs not only in relation to theproceeds of drug related offences but also in relation to theproceeds of other criminal activities (such as organised crimeand terrorism) the member states should, within the meaningof their legislation, extend the effects of the Directive toinclude the proceeds of such activities”.SUMMARY OF RESPONSE PRESEPTEMBER 11Although it is important to understand the legal andpolitical obstacles that have inhibited the internationalpeaceful response to the threat of terrorism pre-September 11, the dynamism of international law makingshould not be underestimated.Law enforcement strategies that sought to attack theprofits of criminal enterprises are relatively recent arrivalson the domestic as well as the international scene. TheFATF was created by the G7 in 1989. The first anti moneylaundering legislation in the UK was introduced in thesame year. At that time drug trafficking, and to a lesserextent organised crime, were the primary targets. Yet onlyfive years later, the UN General Assembly clearly saw theadvantage of incorporating anti money laundering andfunding strategies in the fight against internationalterrorism. The EU was also beginning to recognise thevalue of money laundering regulation in combatingterrorist organisations by the mid 1990’s. 21Amicus Curiae Issue 47 May/June 2003ArticleArticleTragically, it was the attacks on the WTC of September11 that focused the attention of the internationalcommunity on the importance of enhancing existingpeaceful initiatives to combat terrorism. The fact that theattacks could not have taken place without significantfinancial support to train and maintain a large Al-Qa’idacell within the US, added considerable momentum to theimplementation of strategies that attack terrorist funding atsource.INTERNATIONAL RESPONSE POSTSEPTEMBER 11The UN Security Council acted with immediate effectshortly after the September 11 attacks, issuing a number ofResolutions dealing with both the peaceful and coerciveinternational response to international terrorism.Resolution 1373 targets those who finance terrorist acts.It requires all states to criminalise terrorist fund raising,freeze the financial of terrorists or terrorist organisations,and prohibit the provision of any form of economicassistance to terrorists, terrorist organisations or relatedentities. Domestic lawmakers are also required to ensurethat the financing of terrorist acts are established as seriouscriminal offences in their respective jurisdictions.The Security Council built in a novel enforcementmechanism into the resolution. It borrowed the statereporting and committee system from international humanrights conventions and set up a Counter TerrorismCommittee to monitor implementation of Resolution1373. All states are obliged to report to it regularly on stepsthat they have taken to implement the resolution’s provisions.The Security Council also called upon all states tobecome a party to the 1999 Financing Convention. Priorto September 11, the Convention had only four of the 22ratifications necessary for it to enter into force. It now has52 parties, and has been in force since April 10 2002.The innovations contained in the 1999 FinancingConvention are too numerous to be discussed here. Insummary it contains, for the first time, a workabledefinition of terrorism, and creates an internationaloffence prohibiting the financing of terrorism. State partiesare obliged to change their domestic laws to make thefinancing of terrorism criminal offences in their ownjurisdictions, punishable by appropriate penalties.The 1999 Financing Convention also provides for thefreezing and forfeiture of terrorist funds, and requires thatconfiscated assets should be used to compensate thevictims of terrorist acts. In addition, the 1999 FinancingConvention requires state parties to co-operation inimplementing financial regulations to include identificationand reporting provisions similar to those that appear in antimoney laundering instruments.The success of the 1999 Financing Convention dependson its implementation. Nonetheless, the alacrity withwhich states acceded to the Convention after September11, the binding nature of Security Council Resolution1373, and the newly established Committee on CounterTerrorism suggests that suppressing the finances ofterrorism has rapidly become a permanent part of theinternational community’s peaceful strategy to combat thethreat of international terrorism.THE FINANCIAL ACTION TASK FORCE POSTSEPTEMBER 11The response of the FATF to the September 11 attackswas equally swift.The FATF responded by producing eight “SpecialRecommendations on Terrorist Financing” which incombination with the earlier “Forty Recommendations”are intended to provide an international standard forsuppressing terrorist financing. The SpecialRecommendations cover familiar ground and include thecriminalisation of terrorist financing and associated moneylaundering, the freezing and confiscating of terrorist assets,international co-operation, and the reporting of suspiciousor complex transactions to national authorities.The FATF also agreed a plan of action, in an attempt toensure compliance with the new recommendations, whichincludes “naming and shaming” those states which fail totake appropriate measures to combat terrorist financing,and the provision of technical assistance to non-members.THE REGIONAL (EU) RESPONSE POSTSEPTEMBER 11There have been a vast number of EU initiatives sinceSeptember 11. These include political agreement on acommon definition of terrorism, increased co-operationbetween member states and the EU and the United States,and initiatives to freeze and confiscate terrorist finances.For present purposes, the most concrete developmentpost September 11 is the amended money-launderingdirective, which was finally agreed on 19 November 2001.The main changes which affect terrorist financing is theextension of the definition of predicate offences to includeall serious crimes.The extent of the inter-relationship between the sourcesof international law discussed in this paper can be seen inboth the Amending Directive, which urges member statesto consider the FATF “Forty Recommendations” asguidance in determining what can properly be consideredpredicate offences, and the European Council Meeting inGhent of 19 October 2000 which urged all member statesto ratify the 1999 Financing Convention.SOME THOUGHTS AND CONCLUSIONSSince September 11, the international communityappears to have more or less agreed what terrorism is, andhow to deal with it. An internationally agreed definition of22Amicus Curiae Issue 47 May/June 200323Amicus Curiae Issue 47 May/June 2003Articleterrorism, or at least one accepted by 52 states, hasappeared for the first time in the 1999 FinancingConvention. The Ad-Hoc Terrorism Committee of the UNis close to producing a draft Anti-Terrorism Convention,which will be put before the General Assembly later thisyear. The European Council has adopted a commondefinition of terrorism in its Framework Decision of June13 2002. The coincidence of terminology amongst manyof the instruments, together with the exhortationsemanating from international institutions to implementthe latest conventions, suggests an unprecedented degreeof unanimity as to the appropriate peaceful strategy tocombat terrorism.Responses to international terrorism that do notinvariably result in the deaths of innocent civilians arepopular, and certainly necessary. The strategies discussedhere are also attractive because they are a legal response tothe challenge of terrorism, expressing the collective will ofthe international community, as opposed to the legallydisputed acts of individual states who use force againstothers.Having said this, the appeal of the peaceful responsediscussed in this article should not blind us in anyconsideration of its appropriateness. Organised crimesyndicates and drug trafficking cartels share many of thecharacteristics of international terrorist organisations,which is why innovative criminal justice strategies tocombat the former were borrowed and adapted byinternational lawmakers to fight the latter. Organisedcriminals and international terrorists operate acrossborders, and are dependent on finance for their survival.Their funds move from one jurisdiction to another withbewildering speed. Their organisations are secretive, highlydisciplined and notoriously difficult to infiltrate. Theymove personnel from state to state, and their impact on thesafety and security of us all is devastating.However, there is one clear difference between thesetwo threats to our safety and security. Criminals aremotivated by profit, which is why domestic lawenforcement agencies believe that strategies that confiscatethe principal benefit of crime are so effective. Terrorists aremotivated by ideology, whether political, religious ornational. Those who provide financial support to terroristsare often motivated by ideology to contribute to a cause,but also by a sense of injustice, alienation and helplessness.The actual sums of money involved in supportingterrorist organisations are relatively small in any event.Estimates vary, but it is thought that the September 11attacks cost Al-Qa’ida less than $300,000. The transferswere made in relatively small amounts. Making them moredifficult to detect using traditional anti-money launderingtechniques.Also, many of the law enforcement strategies that appearin these instruments are untried against internationalterrorists, and unproven against drug traffickers andorganised crime. Such strategies carry with themsignificant risks: not least the freezing and confiscation ofassets on the basis of uncorroborated intelligence andundisclosed evidence. It may be that the real risk of relyingexclusively on such strategies is yet to emerge – that infailing to understand and address why terrorists receive somuch financial support, the international community failsto prevent future fund raising – which in turn facilitates thecommission of further terrorist crimes.Finally, whilst states are signing up in large numbers torecent conventions and initiatives to suppress terroristfinancing and improve the regulation of their fiscal systemsto prevent the laundering of terrorist funds, the realsuccess of the peaceful strategy discussed here will bemeasured in criminal convictions and confiscated assets. Todate, the record of states in not only implementing theirinternational obligations, but also actually taking actionagainst organisations and individuals is patchy at best.Achieving genuine international co-operation in the fightagainst organised crime and drug trafficking has provedelusive. Success in the campaign to halt the flow of fundsto international terrorists may prove even more difficult toachieve.Ben BrandonThe author is a partner at the London law firm Russell Jones & Walker,and specialises in UK and international criminal law.

Peaceful strategies in the "War against Terror"

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