July 10, 2017

Financing Terrorism: What the U.S. and its Gulf Partners Are Doing to Cut Off Funding to Violent Extremist Networks

July 6, 2017

From seizing control of banks to extortion and trafficking in oil and oil-related products, terrorist organizations have diversified their revenue streams to amass significant war chests to fund their operations. The Islamic State in Iraq and the Levant, which is fighting to hold on to territory in Iraq and Syria while claiming attacks around the globe, has been described as the wealthiest terrorist organization in history.

The United States and its Gulf Arab partners have taken significant steps to stem the flow of funds to terrorist groups over the past decade, culminating with the announcement of the new Terrorist Financing Targeting Center, co-chaired by the United States and Saudi Arabia. However, despite various measures instituted to better regulate and secure the formal banking sector, alternative remittance systems like hawalas, and charitable organizations in the Gulf, some terrorist organizations are still able to generate income from the region and fund continued attacks.

On July 6, AGSIW hosted a panel investigating what the United States and its Gulf Arab allies are doing to cut off funding to violent extremists.

Click here to watch on CSPAN.

Panelists:

Katherine Bauer, Blumenstein-Katz Family Fellow, The Washington Institute for Near East Policy

David Cohen, Former Deputy Director, CIA

Juan Zarate, Chairman and Co-Founder, Financial Integrity Network

Stephen A. Seche, Executive Vice President, AGSIW (Moderator)

Juan Zarate began the discussion by explaining the evolution of cooperation between the United States and its Gulf Cooperation Council allies following 9/11 on countering terrorism financing. He noted that the United States still heavily relies on the cooperation from and communication with these countries. He stated that the most success in combating terrorist financing occurs when like-minded allies work together to gather intelligence and information and agree on a common strategy. He noted that repairing the rift between Qatar and other Gulf states is highly important to maintain cooperation on this international security issue.

David Cohen stressed the necessity of a fully functioning U.S. State Department in the fight against terrorist financing. He also noted the importance of a unified GCC and bilateral communication and cooperation. For Qatar to continue its forward leaning efforts against terrorist financiers, Cohen argued, it is necessary for the United States and other Gulf countries to maintain relations with Doha.

Echoing Cohen and Zarate’s concerns about the GCC crisis, Katherine Bauer maintained that cooperation among all GCC states is very important. She highlighted the opportunity the international community has to continue to press Qatar to take action against individuals guilty of terrorism financing, as well as follow through with already implemented regulations. International cooperation and communication, Bauer stressed, is extremely important when rooting out all possible channels of terrorism financing.

The conversation shifted toward the issues of financial support for terrorist organizations on the individual level. Zarate recognized the flexibility terrorist groups have in sources of financing. The adaptability of these organizations, Zarate highlighted, makes cutting off access to capital and resources all the more important.

Cohen continued on this thread, saying it would be a mistake to narrowly define terrorism financing. He argued what matters most is not how the money is raised, but rather how it is moved. Eliminating access to formal financial systems is the most efficient and effective method of reducing the funds available to terrorist organizations, regardless of how the organizations are getting their funds.

Terrorism Financing Panel