A Study on Terrorism Financing Risks (I)

Author:Laura LICĂ-BANU

JEL:F 23, K 14

DOI:

Keywords:terrorism financing, global, standards, sources, information

Abstract:
During the last decade, the globalization trends allowed to terrorist groups in maintaining an efficient financial infrastructure and to infiltrate and control international financial systems.\r\nThe Hawala system is an informal traditional method of funds transfer, frequently used by terrorists. It offers the advantage of anonymity, the transactions being performed based only on verbal agreements between the Hawala agent and the beneficiary of this service, without existence of documents to prove its performance. Similarly, non-profit organizations can be used for raising funds for terrorism purposes, being a vulnerable segment by its intensive use of cash and possibility to a fast currency exchange. \r\nOn the same time, due to the development level of the international financial structure, electronic transactions may be performed anywhere in the world, in an extremely short period of time, operating with „megabyte money". Due to the integration of capital markets and fast currency exchange, perpetrators can reinvest immediately dirty money in businesses for having a legal justification and can direct the funds, by multiple transactions, to recipients hard to be indentified for these reasons. \r\nCash couriers are situated in the opposite pole to these transactions. The cross-border transport of cash of bearer negotiable instruments is a mechanism used or controlled especially by the organized crime groups, where the values reach destination by avoiding the traditional financial system.\r\n\r\n

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