Terrorist Financing 101

Over at the Counterterrorism Blog, there's a nice primer on terrorist financing. The whole thing is worth reading, but I thought the following excerpt was especially relevant to local efforts to prevent terrorism:

The unfortunate reality is that regardless of the level of vigilance and detection, terrorists will always have access to funds; however, the more robust the detective efforts, the greater the likelihood for disruption. Every disruptive success reduces the operational capability of terrorists. In this vein, one of the primary areas of vulnerability to terrorists is finance. It is critically important that financial and non-financial institutions understand this fact and the vital role they play in the process.

Two key areas where terrorists are vulnerable when dealing with financial institutions are with respect to Know Your Customer (KYC) practices and Suspicious Activity Reporting (SAR). Whether using their true names or false identities, terrorists are at risk of detection through KYC mechanisms.

Financial Institutions should incorporate terrorist financing specific training into their AML training programs. It is essential to understand and simplify terrorist financing as much as possible. It is equally important for individuals in the financial and business sector to understand that they are on the front line of the economic war on terrorism and are capable of playing a vital role through risk recognition, AML monitoring and mechanisms to include KYC and SARs.

This all gets back to the basic idea of collaborating and sharing information with others. If you work in a financial institution and notice something suspicious, you're more likely to report it if: A) someone has shared information with you about the threat, and B) your institution has a trusting relationship with law enforcement and other authorities.