CHAPTER 1
Introduction
T
he business of terrorism is fear and, in order to generate that fear, terrorism, like any other business, requires money. Money is required to buy safe-houses, to fund travel, to run training camps, to recruit new terrorists, to pay off officials, to procure weapons, to obtain false documentation and covers for sleeper cells, to promote the cause, and for many other ends. Those financial needs are met in different ways, drawing on both legal and non-legal sources. According to those at the forefront in combating terrorism financing (CFT), in particular the Financial Action Task Force against money laundering (FATF), one of the ways that terrorists obtain funds is through nonprofit organizations (NPOs). They draw upon examples of NPOs being used to raise, transfer, and divert funds for terrorist purposes. The international community has taken various remedial measures in response. This paper aims to explain what lies behind the international action targeting NPOs and to clarify what the recognized international standard actually recommends in this respect—there is a lot of misunderstanding as to what is really required. This paper also discusses the issues involved in implementing or advising on CFT policy. It is important in taking action that countries do not overestimate the threat and that they are aware of all the possible consequences, even unintended ones. In many ways, the nonprofit sector of a country is a force for good and needs to be protected, rather than unnecessarily curtailed. Similarly, those who offer technical assistance to countries on this issue should advise and make recommendations that take into account possible adverse side effects of government action against NPO abuse. Applied in the wrong way, government measures can end up harming the NPO-sector and, ultimately, damage the wider counterterrorism effort. After describing the types of cases mentioned in justification of remedial action and the rationale for specific measures recommended, this paper will a empt to highlight key issues surrounding regulation of NPOs for terrorism financing (TF) purposes and make some recommendations on how countries could sensibly deal with this question.
1