Terrorist Financing and Money Laundering
AbstractTerrorism 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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Bibliographic InfoPaper provided by University of Paderborn, CIE Center for International Economics in its series Working Papers with number 40.
Length: 26 pages
Date of creation: Jun 2011
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terrorist financing; causes and costs of terrorism; money laundering; organized crime vs. terrorism; anti-terrorist financing policies;
Find related papers by JEL classification:
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
- H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
- D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances
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- repec:diw:diwdiw:diwepb7 is not listed on IDEAS
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