TOPIC: TERRORISM FINANCING

REPORTER: ALFREDO M. ATALIN JR., RCRIM, LPT

OBJECTIVES:
1. to define and give an overview on economic crime and its
typologies
2. to define and generate deeper understanding on terrorism
financing and its trends
3. to give an overview regarding the correlation between
terrorism financing and educational institutions

ECONOMIC CRIME: OVERVIEW

Edwin Sutherland (1939) first used the term “white-collar crime”
to denote “a crime committed by a person of high status and
respectability in the course of his [sic] occupation”.

Economic offences not only inflict pecuniary losses on

individuals but also damage the national economy and have
security implications as well. The offences of smuggling of
narcotic substances, counterfeiting of currency and valuable
securities, financial scams, frauds, and money laundering evoke
serious concern about their impact on the national security.

White-collar crime refers to those illegal acts which are

characterized by deceit, concealment, or violation of trust and
which are not dependent upon the application or threat of
physical force or violence (Barkan, 2006). (FBI)
 *securities and commodities fraud, insurance fraud,
health care and medical fraud, telemarketing fraud,
credit card and check fraud, consumer fraud, illegal
competition, and deceptive practices, bankruptcy fraud,
computer-related fraud, bank fraud, embezzlement and
pilferage, bribes, kickbacks and payoffs, money
laundering, election law violations, corruption of
public officials, copyright violations, computer crimes,
environmental crimes, and receiving stolen property

Economic crime, also known as financial crime, refers to illegal

acts committed by an individual or a group of individuals to
obtain a financial or professional advantage. The principal
motive in such crimes is economic gain.
(https://www.europol.europa.eu/crime-areas-and-statistics/crime-
areas/economic-crime)

An economic crime, as the name indicates, is a crime that has an

adverse impact on the economic standing of an individual or group
of persons, a company or many such institutions, or the
government (State or Central), thus affecting the economic
condition of a certain nation.
(https://blog.ipleaders.in/changing-dimensions-of-economic-
crime/)

Economic Crime means the non-violent criminal and illicit

activity committed with the objectives of gaining wealth
illegally either individually or in a group or organized manner
thereby violating existing legislation governing the economic
activities of government and its administration.
(https://www.lawinsider.com/dictionary/economic-crime)
Economic crime is impacting all aspects of society—citizens,
governments, and businesses. Fraud, money laundering, bribery,
corruption, and terrorist financing expose the most vulnerable in
society to exploitation by organized criminal gangs, through
crimes such as people trafficking, modern slavery, and child
sexual exploitation.
(https://www2.deloitte.com/global/en/pages/public-sector/
articles/tackling-economic-crime.html)

As technology advances and corporations grow, new crimes

begin to surface that not only impact people, but businesses and
the economy as well. Economic crimes as well as white collar
crime and blue-collar crimes continue to impact our society and
structures of life in many different ways and are displayed
throughout our everyday lives.

TERRORISM FINANCING
Republic Act 10168: "The Terrorism Financing Prevention and
Suppression Act of 2012"
SEC. 8. Prohibition Against Dealing with Property or
Funds of Designated Persons. - Any person who, not being
an accomplice under Section 6 or accessory under Section
7 in relation to any property or fund: (i) deals
directly or indirectly, in any way and by any means,
with any properly or fund that he knows or has
reasonable ground to believe' is owned or controlled by
a designated person, organization, association or group
of persons, including funds derived or generated from
property or funds owned or controlled, directly or
indirectly, by a designated person, organization,
association or group of persons; or (ii) makes available
any property or funds, or financial services or other
related services to a designated and/or identified
person, organization, association, or group of persons,
shall suffer the penalty of reclusion temporal in its
maximum period to reclusion perpetua and a fine of not
less than Five hundred thousand pesos (Php500,OOO.OO)
nor more than One million pesos (php 1,000,000.00).
 Terrorist groups need funds/money to sustain themselves and
to carry out terrorist acts. Terrorist financing encompasses the
means and methods used by terrorist organizations to finance
their activities. It may involve funds raised from legitimate
sources such as personal donations and profits from businesses
and charitable organizations, as well as from criminal sources
such as, drug trafficking, fraud, smuggling of weapons and other
goods, kidnapping and extortion.
(https://www.unodc.org/unodc/en/terrorism/expertise/combating-
terrorist-financing.html)

Terrorists use techniques like those of money launderers to

evade authorities' attention and to protect the identity of their
sponsors and the ultimate beneficiaries of the funds. Terrorist
financing may also be directly linked to money laundering if the
proceeds of crime are used to fund terrorist activities. 
However, financial transactions associated with terrorist
financing tend to be in smaller amounts than is generally the
case with money laundering. When terrorists raise funds from
legitimate sources the detection and tracking of these funds
becomes more difficult.

To move their funds terrorists use; the formal banking

system, informal value-transfer systems, the oldest method of
asset-transfer, the physical transportation of cash, gold and
other valuables through smuggling routes.
(https://guernseyfiu.gov.gg/article/175968/What-is-Terrorist-
Financing)

Any crime which results in a profit can be used to finance

terrorism. This means that a country may face terrorism finance
risks even if the risk of a terrorist attack is low.

Sources of terrorist funding include, but are not limited

to, low-level fraud, kidnapping for ransom, the misuse of non-
profit organizations, the illicit trade in commodities (such as
oil, charcoal, diamonds, gold and the narcotic “captagon”), and
digital currencies.
(https://www.interpol.int/en/Crimes/Terrorism/Tracing-terrorist-
finances)
The financing of terrorism is defined as the distribution or
collection of funds, in any way, directly or indirectly, with the
purpose of or knowledge that these funds will be used in full or
in part by a terrorist or a terrorist organization. Like the
fight against money laundering, embargoes and the respect of
international sanctions, the fight against the financing of
terrorism contributes to the security and the reliance of the
financial market and its actors.
(https://pideeco.be/services/compliance-consultancy/financial-
crime/terrorist-financing/)

Terrorism activities take place in many different forms

ranging from isolated acts to planned activities of organized
groups. The forms of financing of terrorism therefore vary
accordingly. It comprises not only the financing of the terrorist
acts as such, but also any support to the criminal network.
Terrorist organizations require significant funding, both for the
actual undertaking of terrorist acts, but also to other issues:
to maintain the functioning of the organization, to provide for
its basic technical necessities, as well as to cover costs
related to spreading related ideologies.
(https://www.coe.int/en/web/moneyval/implementation/financing-
terrorism)

TERRORISM FINANCING AS LINKED TO EDUCATIONAL INSTITUTIONS AND

STUDENTS
All educational institutions – from universities and
colleges to academies and private schools - are susceptible to
financial crime in an ever-growing variety of forms…and one of
which could possibly be financing terrorist groups.

Schools have been a target of terrorists for decades.

 *Terrorist groups may fund an existing student organization
and/or even sponsor educational expenses of students through
legitimate scholarship program grants as a front to cover up
and/or launder their illegally obtained finances with the
intention of investing to these students for possible recruitment
in the future. And in turn, some of these grantees will establish
loyalty to the group holistically whether they are aware or not
of these facts/agenda.

Some students, school facilitators, and the like, may also

fund terrorist groups unknowingly and directly or indirectly
through engaging in to business of the group ranging from
transacting, making purchases, consumption, dealing with in any
services catered by and associated to the group, and as well as
patronage to legitimate and illegitimate (illegal) businesses
where laundered money are concealed and layered down.
 And in some cases, they may be knowingly aware that they
become an instrument to fund terrorist organizations through
payment of community taxes or heeding to solicited gifts…that
some students and/or school employees act as cadres, active and
passive supporters of the group and that there is also a
possibility that students are connected or even children of
members of these terrorist groups.

No matter how connected and intertwined the relationship

might be, we cannot deny the fact that we somehow or by any
means, consciously or unconsciously, and unintentionally and
intentionally become instruments to fund these terrorist groups.

Since terrorists require financing to recruit and support

members, maintain logistics hubs, and conduct operations,
preventing terrorists from accessing financial resources is
crucial to successfully counter the threat of terrorism. However,
many States lack the legal and operational frameworks and
technical expertise needed to detect, investigate and prosecute
terrorist financing cases.
(https://www.unodc.org/unodc/en/terrorism/news-and-events/terrori
st-financing.html)