The 2018 NFTRA exposed tactics terrorist groups employ to conceal the source and purpose of financial transactions . Some of these groups used intermediaries or third countries to collect funds , add them to a concoction of funds from other supports , then transfer them to the terrorist organization . The stacking of layers in these transactions creates a challenge for anyone looking for connections to terrorist funding activity .
Challenges Of Countering Terrorism Funding
The 2022 NFTRA highlighted several other challenges when tackling bank-funded terrorism .
U . S . banks providing correspondent banking services to foreign financial institutions , potentially leading to unwittingly processing funds associated with terrorism .
• Acting as intermediary or respondent banks , U . S . banks lack direct relationships with the originators or beneficiaries of transactions , relying on correspondent banks to manage associated risks .
• Inadequate insider threat mitigation practices at correspondent banks may expose U . S . banks to complicit employees facilitating terrorism financing ( TF ) activity .
• This scenario can result in U . S . banks unintentionally processing transactions from foreign banks on behalf of complicit entities , including local money remitters aiding terrorist groups like ISIS .
• Larger fund transfers may also be involved , such as those sent on behalf of Hizballah or Iran to support terrorist proxies , regional militant groups , or other malign activities .
Hizballah ’ s regular use of the international banking system and its vast financial resources
• This tactic is likely enabled by Iran providing hundreds of millions of dollars .
• Hizballah gains access to foreign financial institutions through supporters or sympathizers who willingly conduct transactions on behalf of Hizballah leaders or affiliated entities .
• In August 2019 , Treasury sanctioned Jammal Trust Bank ( JTB ), a Lebanon-based financial institution , for knowingly facilitating banking activities for Hizballah .
• JTB was accused of maintaining a longstanding relationship with a key Hizballah financial entity and providing financial services to Hizballah ’ s Executive Council and the Iran-based Martyrs Foundation .
Hizballah not being under UN-targeted financial sanctions , and many foreign jurisdictions not domestically designating it as a terrorist organization .
• Hizballah political leaders or social welfare groups could potentially open accounts and conduct fund transfers through EU banks .
• The limited use and inconsistent implementation of counterterrorism sanctions by foreign governments and financial institutions pose a challenge .
• These designations are crucial for isolating specific facilitators from the international financial system and aiding in the identification of financial activities linked to other terrorist networks .
Personal bank accounts or accounts provided by online payment services being the most frequent channels used for Domestic Violent Extremist ( DVE ) activity .
• This activity may include sending funds to supporters or websites fundraising for violent extremist groups ; purchasing weapons , tactical gear , explosives components , etc .; or traveling domestically for paramilitary training .
• When four individuals affiliated with violent white supremacist groups faced charges for various crimes , including conspiring to damage a U . S . energy facility and manufacturing illegal firearms , two of the individuals allegedly utilized their personal bank accounts and associated online payment platforms to transfer funds related to illegal firearms manufacturing .
46 x The Trial Lawyer