Fraud is among the hottest strategies now used to fund terrorist actions. However the connection between fraud and terrorism financing within the UK has been ignored by successive governments, regardless of an acknowledgement of that hyperlink.
Till the terrorist assaults within the US in September 2001, the worldwide neighborhood had centered its monetary crime efforts on tackling cash laundering. Because of 9/11, governments instigated a “monetary conflict” on terrorism which has restricted the sources obtainable to terrorist teams. Now related work is required to sort out the acts of terror funded via fraud.
My analysis focuses on the quite a few terrorist assaults which have been financed by fraud. This work has recognized a terrorism financing file, which incorporates passport fraud, immigration fraud, establish theft, monetary fraud and tax fraud.
Profit fraud is among the most typical strategies used to fund terrorism in Europe, particularly in Belgium, Scandinavia and the UK. Bank card, private mortgage and financial institution fraud is prevalent in terrorism networks within the US and the UK. And never-for-profit organisation fraud and tax fraud are additionally prevalent within the US, UK and Spain.
The UK authorities has launched a sequence of measures to attempt to sort out these points. These embody the Financial Crime (Transparency and Enforcement) Act 2022 and the financial crime and company transparency invoice (2022), which continues to be going via parliament. Each are meant to increase the UK’s sanctions regime and enhance using unexplained wealth orders (which permit for the confiscation of property with out proving criminality).
Nonetheless, there are not any particular measures to sort out the affiliation between fraud and the financing of terrorism. This implies there are nonetheless various loopholes that terrorists might exploit. And organisations are beneath no obligation to report fraud to the safety companies. However terrorists have used fraud to assist finance assaults within the UK over the previous twenty years.
UK terror assaults
In July 2005, 4 suicide bombers killed 52 individuals and injured greater than 770 others after detonating 4 improvised explosive gadgets in London. The financing of this terrorist assault and its affiliation with fraud stretch again to 1995.
That’s when HMRC linked a number of suspected frauds with Shehzad Tanweer, one of many terrorists. But this info was not disclosed to both the UK’s Monetary Intelligence Unit or the safety and intelligence companies by HMRC.
In Could 2017, Salman Abedi detonated an improvised explosive machine within the Manchester Area, killing 22 individuals and injuring greater than 800 others. Abedi had fraudulently used scholar loans and his upkeep grant to fund the assault.
He obtained £7,000 from the Pupil Loans Firm after securing a spot at college in October 2015. Greater training establishments are beneath no authorized obligation to report any suspicions of fraud or terrorism financing to the Nationwide Crime Company (NCA).
In June 2017, Khuram Butt, Rachid Redouane and Youssef Zaghba used a van to knock down a number of pedestrians on London Bridge earlier than persevering with their terrorist assault on foot. In whole, eight individuals had been killed and 48 others had been injured.
Butt had been investigated and arrested by Scotland Yard on suspicion of falsely reporting fraudulent exercise on three separate financial institution accounts in October 2016. After his arrest, Butt was granted bail and the fraud prices had been ultimately dropped as a result of inadequate proof. However the banks had been beneath no authorized obligation to submit a report back to the NCA.
What these examples display is that the present reporting obligations are unable to forestall such terrorism financing threats. In gentle of those instances, the reporting of fraud ought to turn into necessary for organisations. It might place fraud on the identical legislative footing as cash laundering, for instance, which is already recognised as an necessary supply of terror finance.
The UK authorities additionally must rethink its present fraud and counter terrorism methods. They need to embody measures that concentrate on utilizing fraud investigation as a disruptive mechanism to forestall future acts of terrorism.