Moneylaundering.com and Fortent Inform recently posted a very interesting article on Trade-Based Money Laundering and terrorism financing to which I contributed. Trading of commodities has been a key terrorism financing vehicle for years, as a way to provide cover for illegal activities and transactions, especially in Sudan and the Balkans.
One of the main characteristics of the Al Qaeda network has been its ability to operate behind a traditional economic and financial network, the best example was provided by the network formed between 1983 and 1996 in Sudan, that crystallized for several years the overall spectrum of facilities and tools at bin Laden’s disposal to carry out its fundamentalist goals, through apparent legitimate companies and charities.
This trend was later observed in many investigations, including in Europe, where an Al Qaeda cell in Spain was operating behind several real estate companies.
In November 2006, a post on a jihadi website (Alsayf.com) was still recommending as an “Innovative method of communication between components of the cell”, “to open a small company, real estate office or any industrial company”, in order to recruit members, organize meetings and raise funds.
The Moneylaundering.com article suggests that international regulators such as the FATF could focus on new regulations in this field. It is indeed more than necessary, although agreeing and imposing international regulations will not be an easy task, due to the complexity of identifying illegal transactions when confronting legitimate businesses. From the experience of past investigations, this is usually determined in a case by case basis. Regulators could usefully work on identifying and listing patterns of suspicious investments or transactions, based on various parameters of a transaction, including its pricing, financial structure, actors and location.