Report
Outlines Growing Link Between Counterfeiting and Terrorism Financing
by IPT News • Dec 6, 2016 at
11:28 am
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Terrorists increasingly are diversifying their funding sources to
support their violent and nefarious activities. That includes various
criminal activities.
A new Union des Fabricants (UNIFAB) report, commissioned by the French government,
highlights the important relationship between terrorism and counterfeiting
in particular. The criminal-terrorism nexus manifests itself in several
forms, but the main elements include: cooperation between terrorist groups
and organized criminal elements, and crimes by terrorists which are
conducted to finance their own operations.
Since 2001, profits from cigarette smuggling and counterfeiting account
for over 20 percent of illicit financing for terrorist groups, the report
says.
Terrorists' reliance on counterfeiting has attracted further attention
with the rise of Islamic State terrorist networks. Without a formal state
sponsor, and facing considerable setbacks in Syria and Iraq, ISIS may start
to rely more on crime to fund operations. The terrorist organization also extensively recruits European operatives with criminal
backgrounds.
Individual terrorists and cells depended on profits from selling
counterfeit goods on numerous prominent occasions. For example, the
Islamist terrorists responsible for the January 2015 attack in Paris earned
money from drug trafficking and counterfeit sales, including Nike shoes.
The Belgium city of Molenbeek, home to a disproportionate number of radical Islamist
terrorists and sympathizers, is strongly associated with counterfeit
activities. In 2012, for example, authorities there seized about three tons
of counterfeit clothes, perfumes, and other accessories. The UNIFAB report
suggests that law enforcement agencies in France and abroad need to stop treating
counterfeiting as simply "petty crime" and understand it
frequently bankrolls terrorist activity.
The report outlines counterfeiting activities by prominent terrorist
organizations. Hizballah for example, has exploited counterfeiting methods
on several occasions, including in 2003 when Lebanese authorities found
containers full of counterfeit automobile parts worth over $1 million
dollars intended for Hizballah supporters. In 2006, U.S. authorities
arrested 19 people who were part of a counterfeit drug network spanning
five countries and involved significant profits for the Iranian-sponsored
terrorist organization.
Though Hamas' criminal financing operations are well documented, the
report also describes Fatah and the Palestinian Authority members'
suspected involvement in illicit financial activities and cooperation with
criminal networks. Interpol believes that al-Qaida and affiliated
organizations earned between $300 and $500 million in the last decade from
illicit activities and smuggling counterfeit goods worldwide.
While the internet and the rise of virtual currency, such as BitCoin,
allow for illicit transactions to remain anonymous, terrorists still rely
on traditional and clandestine networks such as the Hawala (trust in
Arabic) system to transfer money undetected. Counterfeiting is very
profitable, carries relatively lax legal consequences and involves less
risk compared to other financing activities. Beyond raising critical
awareness, the report outlines key recommendations for law enforcement and
counterterrorism agencies.
Click here to read the full report.
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