The international community’s efforts have recently succeeded in reducing the sources of funding of many terror organizations in the Middle East. ISIS is one instance, where the military operations launched by a US-led global coalition since September 2014, have significantly reduced the terrorist group’s funds generated from oil sales and illicit trade and caused huge losses.
Moreover, the United States also imposed sanctions against some terrorist organizations such as Lebanon’s Hezbollah, according to a law known as the US Hezbollah International Financing Prevention Act (HIFPA), passed in December 2015 and also known as H.R.2297.
Nonetheless, the greatest concern in the coming period in the region is how to dry up sources of funding for small-size terrorist cells and individuals known as lone wolves, who act on their own and usually do not need large amounts of money to fund their activities. Rather, their sources of funding are personal savings or money transfers that do not raise suspicions of local or international banks, as was the case in many terrorist attacks in Europe in the past two years.
Given the above-said manner of funding, local authorities in the region might face a difficulty in identifying sources of funding of terrorist organizations, which will require a higher level of their security and financial cooperation to be able to dry up sources of funding of terrorist networks.
Drying Up Sources of Funding
In recent years, after it seized large swathes of territory in Iraq and Syria, ISIS succeeded in building a solid financial system relying on substantial revenue from oil sales, taxes and illicit trade. The group made USD 2.4 billion in 2015, according to several estimates.
However, the Global Coalition Against ISIS which has been conducting military offensive, since September 2014, has succeeded in reducing the group’s oil resources after attacking oil facilities and financial depots in Iraqi cities. Moreover, after the liberation of Mosul in July this year, ISIS practically lost all its territory in Iraq as well as its most important sources of oil revenue and taxes.
Equally effective was the H.R.2297 act, through which the US authorities succeeded in imposing powerful restrictions on Hezbollah’s financial transactions inside and outside Lebanon. According to the act which threatens sanctions on violators, no individuals or entities affiliated with Hezbollah will no longer be able to do business with any Lebanese or international banks.
In addition, the international community and US authorities managed to dry up part of Hezbollah’s sources of funding, generated from illicit drug trade and other activities.
New Patterns
In contrast to large terrorist organisations, small cells and individual terrorists or lone wolves face only minor financial needs since costs of terrorist attacks are often small, according to a report released in 2015 by the Financial Action Task Force, an intergovernmental agency. As such, lone actors and small cell terrorist networks have a much smaller funding requirement given that they do not control territory, field conventional militias, engage in recruitment or propaganda operations, operate checkpoints or deliver social services.
That said, they must have the financial means to provide for their own food, shelter, communications devices, transport and any procurement requirements for terrorist plots, according to the FATF report entitled “Lone Actors and Small Terrorist Cells.”
In most situations, all they need is to develop mechanisms for their attacks and ensure limited logistical services. In Europe, for instance, roughly 75% of the 40 violent extremist terrorist plots in Europe, in the period from 1994 and 2013, cost less than the equivalent of $10,000 according to a report published in 2015 by the Norwegian Defence Research Establishment.
The costs associated with the lethal component of the plot i.e. obtaining assault rifles, explosives, and training, etc. represents the most expensive part of what may actually be a low cost attack.
However, none of the extremely low-cost attacks (less than $1,000) are represented in the case studies. While it is important to know that attacks exist in which the only expenses were for knives or an axe bought at the local store, there is little reason to undertake an in-depth study of their financing. The discussion of each case is structured according to the three main elements in the chain of financing: income, transfers and expenses.
In most cases, these terrorist lone actors and small cells rely on personal funds and international money transfers while avoiding detection by the international monetary system. This represents another significant source of funding for lone wolves in Europe. Following ISIS’ calls to terrorists in recent years to carry out attacks using inexpensive tactics and tools such as knives and trucks, recent reports have warned that some terrorist elements would adopt this type of funding.
Within this context, Europe witnessed several terrorist attacks using tools such as knives, axes and vehicle-ramming, as was the case in a March 22, 2017 attack on Westminster Bridge in London, UK.
In early May 2017, the US Department of State alerted US citizens to the continued threat of terrorist attacks throughout Europe saying that recent, widely-reported incidents in France, Russia, Sweden, and the United Kingdom demonstrate that ISIS, al-Qaida and their affiliates have the ability to plan and execute terrorist attacks in Europe.
Without a doubt, some states in this region are facing the same dangers. The defeat of ISIS in Mosul, its diminishing influence in some areas in Syria might very well prompt some terrorist elements to execute new terrorist attacks using their own financial resources. The possible escalation can create more difficulties for local authorities of involved states that seek to heighten their efforts to combat terrorist financing networks. This is especially significant because some terrorist elements are not known to security authorities, and the small funds that these elements receive, through money transfer agencies or the international financial system, may not raise suspicions.
Overall, it can possibly be concluded that tracking sources of funding of terrorist cells and lone wolves requires a preemptive approach based on security and intelligence foundations, including detecting and tracking ISIS sympathizers while bolstering cooperation and exchange of financial information among regional states and tightening control on financial transfers in the Middle East region.
