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About the movement of terrorist funds.

111militantmoney-1351875320-191-640x480How do terrorists move money?  This article examines six of the most widely used methods: cash couriers, informal transfer systems (e.g. hawala), money service businesses, formal banking, false trade invoicing, and high value commodities.  When terrorists move money, they choose methods that take into account issues of: volume, risk, convenience, simplicity, costs, and speed. This article analyzes the methods according to these issues. It draws on multiple cases and examples, including the most recent cases of Hezbollah’s and al Shabaab’s use of money service businesses, and many others.

Terrorist groups utilize multiple methods for moving funds, demonstrating how they are flexible and adaptive; when one method becomes riskier or costlier, they move to other methods. Terrorists also take advantage of legal and regulatory differences between states, finding the seams where they can work. This makes stopping terrorist financial flows a challenging problem.

To counter the movement of terrorist funds, there are reporting requirements for banks and non-bank financial institutions, as well as a loosely coordinated international regime consisting of organizations like the Egmont Group of Financial Intelligence Units which share financial intelligence, and FATF-style regional bodies that evaluate member states’ compliance regimes. It is beyond the scope of this article to describe the full regime here, as others have done so more than adequately. Read article here