An introduction to recent trends in terrorism financing

Abstract

This paper discusses recent trends in terrorism financing and their implications for financial compliance. In particular, concrete methods used by terrorism financiers will be illustrated, based on 100 qualitative expert interviews with both compliance professionals and criminals. Those interviewees’ insights offer suggestions for improving compliance mechanisms, which will be discussed. The banking system, hawala banking, cryptocurrencies and the antiquities market are all found to be extraordinarily suitable for financing terrorism. By identifying concrete methods of terrorism financing, this paper aims to provide compliance officers, law enforcement agencies and legislators with valuable insights into criminal activity. Whereas existing literature focuses on organisations fighting terrorism financing, this paper instead describes how criminals avoid detection, thereby focusing on the perspectives of criminals and prevention officers.