Published in coordination with the 2023 Global Security Forum, of which Defense One is a media partner.
Twenty years of intense counter-terrorism efforts have taught the international community relatively little about what practices and policies actually reduce terrorism, particularly in the realm of sanctions and finance. Our adversaries, unfortunately, have learned much more about how to evade our efforts.
Extreme-right groups and movements, for example, tend to be nebulous and involve individual actors. They have adapted by making their movements less structured and therefore less susceptible to some of our tools and practices. To respond, we also need to adapt, and make our tools more nimble, responsive, and targeted.
Contrary to popular belief, countering terrorist financing is about a lot more than just transactions reported to financial intelligence units or “following the money,” or about targeting a terrorist group’s bottom line. Countering the financing of terrorism includes things like passing new laws to criminalize terrorist financing, and using financial intelligence to better understand terrorist intent and capability, right down to the individual members of a group. These will remain mainstays in counter-terrorism practices.
Arguably, one of the most useful tools to hinder the financing of terrorism has been international and domestic terrorism sanctions that freeze and seize assets. But to use this tool, individual states or the international community must identify and designate terrorists. In some countries, such as the United States, this is complicated by a lack of a domestic designation process. However, for many other countries around the world, there are no such limitations.
These listings can help states deploy the other tools of counter-terror finance, such as mandatory reporting from the private sector (banks and other financial institutions). To tackle the extreme-right threat, states need to coordinate the designation of extreme-right groups, and where no process exists to do this, states should seek to designate these groups and movements through their international associations. Absent designations, states should seek to reproduce the effects of these sanctions through other policies, including through better information sharing with financial entities and the development of knowledge tools and typologies to guide the counter-terrorism community, including the private sector.
There are two other approaches to counter terror finance that are particularly applicable to the extreme-right threat: the use of civil law and financial deplatforming. Historically, civil law has been used against terrorist actors to compensate victims and degrade their future capabilities. This approach holds promise in punishing extreme-right actors. To use this effectively, however, we must look beyond just terrorism activity, and identify other modes of liability for extreme-right actors in both the criminal and civil space. To improve this approach, states should work together to develop a toolkit of legal mechanisms that can be used to target the financing of extreme-right groups and individuals, and create legal crosswalks between jurisdictions to improve international cooperation. States should also consider a much broader range of disruption options against extreme-right threats; while it might be tempting to hold out for a terrorism charge, disrupting the activity before it occurs (perhaps through a money-laundering or fraud investigation) can serve the public interest. The challenge then becomes telling the story of the terrorism disruption.
The second approach that holds promise in countering extreme-right financing is financial deplatforming. While extreme-right actors often benefit from laws that protect freedom of expression, there are few, if any, laws that insist on an individual’s right to profit from hate, fraudulent schemes, or conspiracy theories. In fact, many of the platforms that extremists use to promote their ideas also allow them to profit from them. At the same time, many of these platforms have terms of service that limit the kinds of activities individuals can promote on their sites. Law enforcement, security services, and even the general public can report breaches in terms of service to these platforms and encourage them to deplatform extremists. And public pressure can also encourage platforms to limit their services to extremists. While individuals might have a right to hold extremist ideas, they don’t have a right to profit from them.
Critics of the counter-terrorist financing approach have suggested that there are few concrete outcomes to show for over 20 years of focus; unfortunately, this is true. Many of the outcomes of counter-terrorist financing investigations and disruptions are relegated to the shadows, or are difficult to measure. Other approaches that have more concrete outcomes, like using military strikes against terrorist leaders, are unlikely to work in the context of the extreme right. States need to work on efforts to improve measurement and demonstrate concrete outcomes of counter-terrorist financing approaches. But we should not abandon counter-terror finance as a methodology to reduce the terrorist threat. Instead, we should expand how we conceive of it, refine our approaches to address contemporary threats, and update our toolkits. We need to continue to iterate our legal and policy approaches to the threat, and improve international cooperation.
Because if there’s one thing that unifies the “old” and “new” terrorist threat, it’s that terrorism does not know borders, and terrorist will engage in jurisdictional arbitrage, taking advantage of and seeking safe haven in the weakest and least responsive states in the international community.
Jessica Davis is a Visiting Senior Fellow at the Soufan Center, President and Principal Consultant with Insight Threat Intelligence, and President of the Canadian Association for Security and Intelligence Studies.
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