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Terrorist Financing and Money Laundering

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Author Info

  • Tim Krieger

    () (University of Mainz)

  • Daniel Meierrieks

    () (University of Paderborn)

Abstract

Terrorism causes enormous costs to society. Since the 9/11 attacks, the “war on terror” has therefore been an important challenge to all civilized countries. In the present contribution we analyze the root causes and costs of terrorist activity, thereby setting the stage for discussing the need for measures against terrorist financing. We argue that running a terrorist organization requires substantial financial resources which are transferred to the groups through clandestine and often illegal channels. Anti-money laundering policies may appear useful measures to stop transfers to terrorist groups; however, they are not sufficient means to deal with all facets of terrorist financing. Compared to similar activities of organized crime, terrorist financing involves “reverse” money laundering. This is a consequence of some fundamental differences between terrorism and organized crime, which also lead to different implications in terms of choosing appropriate counter-measures.

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File URL: http://groups.uni-paderborn.de/fiwi/RePEc/pdf/wpaper/WP40.pdf
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Bibliographic Info

Paper provided by University of Paderborn, CIE Center for International Economics in its series Working Papers with number 40.

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Length: 26 pages
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:pdn:wpaper:40

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Web page: http://www.uni-paderborn.de/fakultaeten/wiwi/department4/cie/
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Related research

Keywords: terrorist financing; causes and costs of terrorism; money laundering; organized crime vs. terrorism; anti-terrorist financing policies;

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References

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  1. Tim Krieger & Daniel Meierrieks, 2009. "Terrorism in the Worlds of Welfare Capitalism," Working Papers 22, University of Paderborn, CIE Center for International Economics.
  2. Lindelauf, R. & Borm, P.E.M. & Hamers, H.J.M., 2009. "Understanding Terrorist Network Topologies and Their Resilience Against Disruption," Discussion Paper 2009-85, Tilburg University, Center for Economic Research.
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  7. Dreher, Axel & Gassebner, Martin, 2008. "Does political proximity to the U.S. cause terror?," Economics Letters, Elsevier, vol. 99(1), pages 27-29, April.
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  13. Thomas Gries & Tim Krieger & Daniel Meierrieks, 2011. "Causal Linkages Between Domestic Terrorism and Economic Growth," Defence and Peace Economics, Taylor and Francis Journals, vol. 22(5), pages 493-508, June.
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  18. Joras Ferwerda, 2008. "The Economics of Crime and Money Laundering: Does Anti-Money Laundering Policy Reduce Crime?," Working Papers 08-35, Utrecht School of Economics.
  19. Geert Bekaert & Campbell R. Harvey & Christian Lundblad, 2004. "Does Financial Liberalization Spur Growth?," Working Paper Research 53, National Bank of Belgium.
  20. Axel Dreher & Martin Gassebner & Lars-H. R. Siemers, 2007. "Does Terror Threaten Human Rights? Evidence from Panel Data," CESifo Working Paper Series 1935, CESifo Group Munich.
  21. Tim Krieger & Daniel Meierrieks, 2011. "What causes terrorism?," Public Choice, Springer, vol. 147(1), pages 3-27, April.
  22. Bruno Frey & Simon Luechinger & Alois Stutzer, 2009. "The life satisfaction approach to valuing public goods: The case of terrorism," Public Choice, Springer, vol. 138(3), pages 317-345, March.
  23. Gary S. Becker & Yona Rubinstein, 2011. "Fear and the Response to Terrorism: An Economic Analysis," CEP Discussion Papers dp1079, Centre for Economic Performance, LSE.
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