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Funding of the terrorist group Daesh: lessons learned

Doc. 14510: compendium of written amendments | Doc. 14510 | 23/04/2018 | Final version

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ADraft Resolution

1The Parliamentary Assembly continues to be concerned about the threat posed by terrorist organisations such as Daesh to peace and stability in the Middle East, even if the plan by Daesh to create a caliphate in Syria/Iraq has failed, thanks mainly to military action by Iraqi and Syrian, including Kurdish, fighters, supported by the international community.
2The Assembly warns that the military defeat of Daesh in Iraq and Syria does not necessarily mean the end of this terrorist group as it will probably morph into something different. It is therefore important to ensure that it will not be able to use the funding sources it has used in the past. In addition, although some of these sources are specific to Daesh, many can be – and are indeed – used by other terrorist organisations.
3Daesh operations have included terrorist attacks undertaken within the Arab World but also beyond. The organisation has claimed responsibility for attacks in many countries around the world. While these tragedies are sometimes the fruit of a more organised group-led attack, often they are carried out by so-called “lone wolves” or isolated individuals, who have been radicalised. One of the most serious challenges to Europe and the United States is posed by these individuals, especially foreign fighters coming home from Iraq and Syria who are likely to revive underground networks in their countries. The Assembly refers in this respect to its Resolution 2091 (2016) on foreign fighters in Syria and Iraq.
4The fight against Daesh has taught us that a terrorist group driven by an extreme Islamist ideology can cause wholesale destruction while capturing territory in which people can be enslaved and money raised through the sale of national resources and extortion. The money can also be exported to other fundamentalists around the world sharing the same ideology, using or bypassing the existing global financial system.
5The foundation underpinning Islamist terrorism, and therefore its funding, is the extreme ideology which drives adherence to the terrorist cause. There therefore needs to be a global initiative to root out extremism and intolerant religion.
6The Assembly welcomes the resolutions taken and implemented by member States and international bodies aimed at tackling the financing of terrorism. In particular, the Assembly hopes for the swift and effective implementation of the Financial Action Task Force (FATF) standards worldwide, specifically of its Forty Recommendations on Combating Money Laundering and the Financing of Terrorism and Proliferation. These should be used by member States to cut off flows of funds and financial and economic assets of individuals and entities on the Daesh and Al-Qaida Sanctions List, as underlined by United Nations Resolution 2253.
7The Assembly also appreciates the decision taken by the FATF to broaden its geographic representation and global engagement to counter terrorism financing. Indeed, terrorism (and as such Daesh) is a fluid, transnational phenomenon, which affects every different part of the world. International bodies and organisations should thus keep their doors open to any new member who wishes to implement legal and financial tools to stop the financing of terrorism. Most importantly, however, they should provide support and advice to underdeveloped countries, which often lack the resources and have strategic deficiencies when it comes to effectively tackling terrorism.
8Effective financial operations are indispensable when it comes to stopping terrorist organisations such as Daesh. National (and international) bodies such as the Financial Intelligence Units can be particularly helpful in identifying terrorist networks and their financial backers, and should thus continue to be supported and used by member States. Collective law-enforcement channels such as Interpol and Europol should also be used more by member States, especially in order to be able to prosecute and penalise foreign terrorist fighters and everyone else who gives material support to Daesh.
9The Assembly acknowledges the work done by the Council of Europe in this field, namely by the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism (MONEYVAL) and the Committee of Experts on Terrorism (CODEXTER).
10The Assembly also recalls the important help provided by the European Union–United States Terrorist Financing Tracking Programme (TFTP) with regard to leads in tracking financial networks and channels of terrorist organisations and thus calls on member States to use the programme more proactively.
11The way in which international terrorist organisations such as Daesh finance their operations around the world can only be tackled by countries acting in concert against such activity; this means using military action sanctioned by the United Nations when and where possible. The challenge is also to share among international organisations financial information which will be able to disrupt and ultimately stop terrorist activity.

In the draft resolution, paragraph 11, replace the words "; this mean using military action sanctioned by the United Nations when and where possible" with the following words: "and by employing a comprehensive strategy involving a number of measures focusing on international cooperation and preventive measures, including military action where appropriate".

12Therefore, the Assembly calls on member States to:
12.1oppose and stop, in any way possible, all financial sources, techniques and channels supporting Daesh and other terrorist organisations, among which extortion, taxation, exploitation of natural resources, smuggling of antiquities, drug trafficking, bank looting, looting of civilians and cultural property, external donations and kidnapping for ransom;
12.2continue to promote and support research on the sources and channels of the funding of terrorism, in order to always be up to date on new alternative sources of financing, such as virtual currencies;
12.3engage in and develop collaboration and co-operation efforts across borders, as well as with international bodies and institutions, in order to promote a more transparent, efficient and rapid exchange of information and intelligence;
12.4intensify capacity building and technical assistance in relation to terrorism financing hotspots, as set out in the Action Plan on Countering Terrorism drafted by the G20 member States;
12.5reaffirm the need to build local capability to investigate and counter terrorist financing, including corruption;
12.6study and develop new technologies, in order to be able to better track, monitor and eventually shut down channels of terrorist financing;

In the draft resolution, at the end of paragraph 12.6, insert the following words: ", and assess whether virtual and crypto currencies, block chain and FinTech technologies help fund terrorism and should be regulated in a coordinated way".

Explanatory note

Adapting to new technologies is essential in effectively tackling the funding of terrorism.

12.7improve the effective implementation of the international standards of transparency, as set out in the United Nations and FATF recommendations;
12.8sign and ratify, if they have not already done so, the Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and on the Financing of Terrorism (CETS No. 198). It notes in this respect that Andorra, the Czech Republic, Ireland, Liechtenstein, Norway and Switzerland have not signed it, while Austria, Estonia, Finland, Iceland, Lithuania, Luxembourg and Monaco have signed but not ratified it;
12.9adopt such initiatives as the United Kingdom’s Joint Money Laundering Intelligence Taskforce to facilitate greater intelligence sharing on terrorist financing;
12.10develop, following the example of France, updated national guidelines, based on international standards, providing concrete advice to businesses and people whose sectors have been listed among the sources of Daesh’s financing;
12.11consider banning new business relationships with banks in Syria. Due diligence is needed concerning financial transfers and transactions in Iraq, Syria and Libya as well as in the border regions;

In the draft resolution, after paragraph 12.11, insert the following paragraph:

"oblige banks to monitor pre-paid debit cards, so as to ensure that they can only be reloaded via bank transfers and personally identifiable accounts;".

Explanatory note

Pre-paid debit cards have proved to be one of the main instruments used to fund terrorist acts.

12.12establish a second layer of security that vets the names of clans/tribes at airports or land borders, taking into account the increasing number of refugees and diaspora in Europe from Syria and North Africa;

In the draft resolution, replace paragraph 12.12 with the following paragraph:

"draw up a list of individuals and entities operating under opaque regimes with high rates of suspicious transactions, and step up the monitoring of suspicious organisations engaged in illicit trade, smuggling, counterfeiting and fraudulent practices;".

Explanatory note

This approach could be more useful than adding another layer of vetting while avoiding targeting refugees as scapegoats terror attacks on European soil.

12.13work across government departments and agencies to better co-ordinate action against the funding of terrorism;
12.14pay close attention to the ability of lone-wolf operatives, inspired by extreme ideological beliefs, to raise money by, for example, using welfare payments or prepayment cards to undertake acts of terrorism.
13Finally, the Assembly calls on the member States of the European Union to implement the proposals made in the 2016 Action Plan for Strengthening the Fight against Terrorist Financing, in particular to: bring virtual currency exchange platforms under the supervision of the Anti-Money Laundering Directive; revise the prohibition of centralised registers providing all bank accounts belonging to one person; extend the scope of the Financial Intelligence Units; and improve the efficiency of freezing measures based on the United States listings.