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iii

Strategic Studies Institute

and

U.S. Army War College Press

OPERATIONALIZING COUNTER 

THREAT FINANCE STRATEGIES

Shima D. Keene

December 2014

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iv

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ISBN 1-58487-653-0
v

FOREWORD

It is a well established axiom that attempting to 

defeat an insurgency or a terrorist organization headon is merely treating the symptoms of a problem. For 

long-term success, the campaign must also address 

the root causes of the insecurity that spawned conflict 

in the first place. 

In this monograph, British academic and practitioner Dr. Shima Keene describes a number of ways in 

which financial intelligence can be leveraged not only 

to disrupt adversary activities, but also to provide 

indicators and warnings of future actions and, ultimately, to address underlying insecurities. Dr. Keene 

was previously both a banker and a British Army reservist. In this monograph, she uses her expertise as a 

threat finance specialist to outline specific areas where 

financial intelligence analysis techniques, which 

are common in the private sector, can be applied to 

combating insurgency, terrorism, and other hard 

security threats. 

Dr. Keene argues that financial disruption techniques used in counterinsurgency have been poorly 

coordinated and at times counterproductive, and cites 

the targeting of the Hawala money transfer system 

as a specific example. Instead, she notes intelligence 

derived from analysis of financial data can provide 

much greater value in both understanding and predicting the adversary’s activities, as well as providing 

for precise targeting to disrupt them. 

The Strategic Studies Institute recommends this 

monograph not only to counterinsurgency and counterterrorism practitioners and policymakers, but also 

to the Intelligence community more widely; all of these 
will find its conclusions on the handling of financial 

data and the value of threat finance analysis valuable.

 

 DOUGLAS C. LOVELACE, JR.

 Director

 Strategic Studies Institute and

 U.S. Army War College Press

vi
vii

ABOUT THE AUTHOR

SHIMA D. KEENE is a Director of the Conflict Studies 

Research Centre, Oxford as well as Director of the Security Economics Programme at the Institute for Statecraft, London, United Kingdom (UK). She is also a Deployable Civilian Expert (DCE) and a member of the 

UK government’s Civilian Stabilisation Group (CSG) 

specializing in Intelligence and Security Sector Reform 

which sits under the Security and Justice Function of 

the CSG. She is a former Senior Research Fellow and 

Advisor at the Advanced Research and Assessment 

Group, UK Defence Academy, and Special Advisor 

to the UK Ministry of Defence (MoD), where she had 

responsibility for assessment and recommendations 

for the development of financial counterinsurgency 

(COIN) strategies in Afghanistan. 

Dr. Keene advises and works closely with a number of British and international organizations on topics 

relating to national and international security including the MoD, various UK government departments 

and law enforcement agencies, the Organization for 

Security and Co-operation in Europe (OSCE), the 

Council of Europe, Global Futures Forum, the North 

Atlantic Treaty Organization (NATO), U.S. government departments and law enforcement agencies and 

various global private sector organizations. Dr. Keene 

has 25 years of practitioner experience in a number 

of industries including finance, defense, security, and 

telecommunications in both the public and private 

sectors, working with government departments, law 

enforcement, telecommunications and finance. She is 

also a former British Army reservist with 7 years military service, most of which was spent with 4th Battalion, the Parachute Regiment. Dr. Keene has published 
viii

numerous internal and external MoD and NATO reports as well as award winning academic journal articles, and is the author of Threat Finance: Disconnecting 

the Lifeline of Organized Crime and Terrorism (Aldershot, 

UK: Ashgate, 2012). Dr. Keene graduated with honors from the University of Buckingham in Business 

Studies; and holds an MPhil in Defence and Security 

Studies from Cranfield University, Defence College 

of Management and Technology (formerly Royal 

Military College of Science), Defence Academy of the 

United Kingdom; and a Ph.D. in international criminal law from the Institute of Advanced Legal Studies, 

University of London.
ix

SUMMARY

U.S. military leaders, planners, and decisionmakers face a new security environment in the 21st century, characterized by its complex networked nature, 

which has emerged as a result of globalization accompanied by the ever increasing speed of technological 

advancements. This in turn has created a new set of 

security dynamics that is increasingly spawning a variety of asymmetric threats, changing the very nature 

of conflict. The result is a complex and untidy security 

environment, where even attempting to define the 

nature of the threat has become difficult. Historically, 

adversaries were well-defined, allowing a relatively 

clear course of action to be chosen against them. This is 

no longer the case, as nonstate actors forming a global 

network of terrorist organizations, associated criminal groups, corrupt governments, and indifferent or 

uninformed individuals or corporations, increasingly 

take center stage. The state now faces an enemy whose 

asymmetry is such that concepts such as “civilian” and 

“military” or even “legality” have become obsolete. 

The consequence is that the traditional approach of 

attempting to find a solution for a particular security 

problem has become ineffective. In fact, it is no longer 

appropriate to look for a single solution as such. In the 

new networked world, most problems are multidimensional in nature making them difficult or impossible to solve due to their incomplete, contradictory, 

and constantly evolving nature. These are generally 

referred to as “wicked” problems, characterized by 

their complex interdependencies where action taken 

to address one aspect of the problem may reveal or 

create additional problems. 
x

As such, it is essential that a problem is examined 

not as a stand-alone subject, but in the context of the 

existing interdependencies so as to be better able to 

appreciate the possible knock-on effects of actions 

which may be taken. Furthermore, these challenges 

can no longer be tackled by any single organization or 

country. The hybrid nature of problems and conflict 

itself, coupled with resource limitations, will require 

partners to work more closely together than ever before. This multi-stakeholder environment in itself can 

be challenging due to the existence of differing cultures, both organizational and geographical, as well as 

differing perspectives and motives, despite the united 

goal of the partnership as a whole. 

The reality of this threat environment is that it has 

changed the nature of warfare itself, with significant 

implications for the U.S. Army. In recent years, the 

role of the military has evolved from pure “warfighting” to more non-warfighting missions such as peace 

keeping and preventive engagements. These additional requirements demand that military personnel 

become more aware of the broader security picture, 

as well as that they develop additional skills that will 

allow them not only to be good soldiers, but to have 

the flexibility and adaptability to play a number of additional roles to include peacekeeper, humanitarian 

agent, law enforcement official, and diplomat, as the 

situation demands. 

As such, it is important not only to know what the 

immediate problem is, but to understand the wider 

surrounding issues, as well as the underlying causes 

of that problem. Actions taken without an understanding of the full dynamics of the threat can backfire, and 

numerous examples are available from the last decade 

of counterinsurgency operations. Uninformed actions, 
xi

however well-intentioned, will have negative side effects, and consequences potentially of sufficient magnitude to endanger the overall military mission. 

This must be avoided at all costs. This monograph 

therefore provides recommendations for addressing a 

specific area where the capability of the United States 

and allied militaries can be augmented for the purpose 

of targeted action against adversaries: that of threat 

finance, and effective counter threat finance strategies.

1

OPERATIONALIZING COUNTER 

THREAT FINANCE STRATEGIES

INTRODUCTION—THE CHALLENGES

U.S. military leaders, planners, and decisionmakers face a new security environment in the 21st century, characterized by its complex networked nature, 

which has emerged as a result of globalization accompanied by the ever increasing speed of technological 

advancements. This in turn has created a new set of 

security dynamics that is increasingly spawning a variety of asymmetric threats, changing the very nature 

of conflict. 

The result is a complex and untidy security environment, where even attempting to define the nature 

of the threat has become difficult. Historically, adversaries were well-defined, allowing a relatively clear 

course of action to be chosen against them. This is no 

longer the case, as nonstate actors forming a global 

network of terrorist organizations, associated criminal groups, corrupt governments, and indifferent or 

uninformed individuals or corporations, increasingly 

take center stage. The state now faces an enemy whose 

asymmetry is such that concepts such as civilian and 

military or even legality have become obsolete.1

The consequence is that the traditional approach 

of attempting to find a solution for a particular security problem has become ineffective. In fact, it is no 

longer appropriate to look for a single solution as 

such. This is because in the new networked world, 

most problems are multidimensional in nature. This 

makes the problems difficult or impossible to solve 

due to their incomplete, contradictory, and constantly 

evolving nature.2 These are generally referred to as 
2

“wicked” problems which are characterized by their 

complex interdependencies, where action taken to address one aspect of the problem may reveal or create 

additional problems. 

As such, it is essential that the problem is examined not as a stand-alone subject, but in the context 

of the existing interdependencies in order to be able 

to appreciate better the possible knock-on effects of 

actions which may be taken. Furthermore, these challenges can no longer be tackled by any single organization or country. The hybrid nature of problems and 

conflict itself coupled with resource limitations will 

require partners to work more closely together than 

ever before. This multistakeholder environment in itself can be challenging due to the existence of differing cultures, both organizational and geographical, as 

well as differing perspectives and motives, despite the 

united goal of the partnership as a whole. 

The reality of this threat environment is that it has 

changed the nature of warfare itself, with significant 

implications for the U.S. Army. In recent years, the 

role of the military has evolved from pure warfighting 

to more non-warfighting missions such as peacekeeping and preventive engagements. These additional 

requirements require military personnel to become 

more aware of the broader security picture, as well as 

to develop additional skills that will allow them not 

only to be good soldiers, but to have the flexibility and 

adaptability to play a number of additional roles to include peacekeeper, humanitarian agent, law enforcement official, and diplomat, as the situation demands. 

As such, it is important not only to know what the 

immediate problem is, but to understand the wider 

surrounding issues, as well as the underlying causes 

of that problem. Action taken without an understand-
3

ing of the full dynamics of the threat can backfire, and 

numerous examples are available from the last decade 

of counterinsurgency (COIN) operations. Uninformed 

actions, however well-intentioned, will have negative 

side effects, and consequences potentially of sufficient 

magnitude to endanger the overall military mission. 

This must be avoided at all costs. This monograph 

therefore provides recommendations for addressing 

a specific area where the capability of U.S. and allied 

militaries can be augmented for the purpose of targeted action against adversaries: that of threat finance, 

and effective counter threat finance strategies. 

THE ROOT CAUSES OF INSECURITY 

AND CONFLICT

In order to provide context for these recommendations, we need to consider the unstable and conflict-prone environments in which they could be employed. Many of the factors that cause insecurity and 

conflict, such as terrorism and insurgencies, are not 

new. Insurgencies of the kind witnessed in the early 

21st century have forerunners in many parts of the 

world throughout human history. Early examples of 

the potentially catastrophic effects of insurgency are 

the invasion of the Akkadian empire in Mesopotamia 

in the 22nd century BC by the Gutians (“barbarian 

people”) from the Zagros Mountains, which resulted 

in the eventual collapse of the empire; and insurgency 

operations conducted by a variety of barbarians such 

as the Huns,3 which contributed to the fall of the Roman empire in the 5th century AD.4

 Other examples 

include the Peninsular War (1807-14), for the control 

of the Iberian Peninsula, which led to the defeat of Napoleon in 1814, and the Greek war for independence 
4

against the Ottomans in the 19th century (1821-32). 

Importantly, some of the key drivers of insurgencies 

remain unchanged over time and therefore can be 

used as indicators and warnings of future instability.

Similarly, terrorism has served as one of the most 

common expressions of man’s inhumanity to man 

since time immemorial. Although definitions remain 

controversial, the term “terrorism” is generally used 

to refer to the killing of innocent people5 with most 

accepting the United Nations (UN) description as: 

. . . any act intended to cause death or serious bodily 

harm to civilians or non-combatants with the purpose 

of intimidating or compelling a government or an international organization to do or abstain from doing 

any act.6

Early examples of terrorism include the terror attacks by the Cimbri tribe in 105 BC which led Rome 

to declare a state of emergency known as terror cimbricus7

, or the use of the word by Jacobins imposing 

a reign of terror during the French Revolution in the 

18th century. However, it was the events of September 11, 2001 (9/11) that brought terrorism to the top 

of the political agenda for the United States and its 

allies. The events of 9/11 served as a turning point for 

terrorism, highlighting its metamorphosis into a new 

age of international terrorism, marked by different 

motivations, actors, and sponsors. In addition, greater 

ambitions and lethality were highlighted, no longer 

confined by geographical boundaries, representing an 

upward shift to a new level of global threat previously 

unseen and unknown. As such, not only will the need 

for effective counterterrorism and COIN doctrine continue into the foreseeable future, but counter efforts 

will need to be more sophisticated than ever before to 

tackle this new form of adversary at all levels. 
5

However, attempting to defeat an insurgency or a 

terrorist organization head-on is merely treating the 

symptoms of a problem. For long-term success, the 

military campaign must also address the root causes of 

that insecurity. In order to achieve this, a move away 

from a pure focus on tactical COIN and counterterrorism operations is essential. Instead, a comprehensive 

approach that combines economic, governance, and 

security measures should be adopted, where the understanding of threat finance should play a key part. 

This can be better achieved when the reasons of insecurity and conflict are fully understood. Numerous 

factors contribute to instability, insecurity, and conflict, ranging from the disruptive influences of adversary organizations, such as terrorist networks and organized crime groups (OCGs), to political unrest and 

social revolution. Some of the key contributors are 

as follows. 

Bad Governance.

Bad governance is a major cause of instability and 

conflict. Inadequate governments rife with incompetence, coupled with the lack of an effective judicial 

system, promote a culture that lacks transparency 

and accountability. This in turn creates an environment where corruption and criminality can prosper. 

Money and power are key motivations. In addition, 

social pressures, especially those created by rapid increases in population density, can lead to instabilities 

of governance. This results in general insecurity and 

instability as even established governments are overtaken by rapid and drastic change as they fail to cope 

with explosive social pressures, causing breakdown of 

social stability and increased mobility. The result is a 

failed state.8
6

Failed and Failing States.

Failed states are one of the dominant and defining features of conflict. States that cannot adapt to the 

changing global context risk collapse, and many such 

failures will be accompanied by substantial outbreaks 

of violence. Furthermore, poor governance, economic 

deprivation, and inequality that characterize failed 

and failing states are likely to spread to neighboring states in the form of economic migration as well 

as crime.9

Economic Resources. 

Competition over primary resources such as energy, food, minerals, and water has played a key role 

in conflict throughout human history. Economic resources will continue to drive states’ security interests in terms of both control of those resources and 

methods of their distribution.10 In addition, these considerations are likely to dictate why we fight, where 

we fight, as well as how we fight. This competition 

also engenders a sense of injustice which may lead to 

eventual confrontation. 

Inequality.

The injustices felt as a result of uneven distribution of wealth will contribute to conflict. This wealth 

gap sets the rich against the poor, both within countries (especially in developing countries) and between 

countries, making some national borders especially 

sensitive. The degree of sensitivity and potential 

problems can be expressed in the ratio of wealth dif-
7

ferential. For example, the ratio between the United 

States and Mexico is 6:1. In other words, each U.S. 

citizen is on average six times wealthier than each 

Mexican. Similarly, the wealth ratio for Spain and 

Algeria is 14:1.11 This disparity results in economic 

migrants entering the European Union (EU), causing 

further friction. 

Inability to Manage Change.

One of the biggest causes of drastic instability is the 

failure of societies to handle change. Excessive conservatism and resistance to change, especially when this 

is forced upon a population, causes tensions to build 

within society, just as seismic tension does in California’s San Andreas Fault. If the accumulated tensions 

are released suddenly, the result can be catastrophic.

Information Ubiquity.

As a result of the internet and the availability and 

affordability of technologies such as mobile phones or 

personal computers, populations are able to access a 

wide range of information quickly. Such ubiquity of 

information is essential to sustain the vast urbanized 

populations, but it also brings with it new forms of 

power that we must understand in order to be able 

to exploit and to counter them, as well as to integrate 

them with other forms of power. Failure to do so will 

result in instabilities and loss of influence and power 

for governments and established political structures.
8

Extremist Nonstate Actors.

International terrorist organizations such as alQaeda and its associates are likely to remain a significant threat to the United States and its allies. In its 

globalized franchised form, these actors create partnerships with local militants and organized criminality. Together, they take advantage of any emerging 

instability which they will exploit as a weapon against 

the West.

Ideology, Culture, and Religion.

Ideological movements, based on religion and 

identity, will remain a significant factor as people continue to fight for their beliefs. Irreconcilable cultural 

and religious differences, between and within communities, local, regional, virtual (cyber) and international will continue to be a destabilizing factor. Furthermore, the spread of ideology has no geographic 

constraints due to advancements in communications 

technologies.

Conclusion.

Any one of these factors can cause conflict. However, the more factors present, the more likely it is 

that conflict will emerge, and the more complex and 

intractable will be any resulting problems. Many of 

these factors are driven or exacerbated by financial/

economic concerns. In addition, the nature and impact 

of the current global economic and social revolution 

will dictate where conflict is most likely to happen, 

and where the U.S. military should be ready to deploy 

and employ its tools of influence.
9

CONFLICT AS A NECESSARY EVIL

At the same time, instability and friction, along 

with growth and decline, are essential components of 

a viable society. This is because it is only when existing practices are challenged that growth is possible. 

Unfortunately, change is never universally welcomed, 

nor is it necesssarily good, and a degree of conflict is 

therefore inevitable. Therefore, the key is to ensure that 

the resulting conflict does not escalate out of control. 

To this end, it is imperative to be able to determine 

what level of instability is beneficial and sustainable 

for a society and to assess when that level becomes too 

high or too low. In addition, when instability becomes 

unmanageable, it is important to assess accurately 

what action is necessary to bring the situation back 

under control. 

This can only be achieved by obtaining appropriate intelligence in order to assess correctly the precise 

nature of the threats, instabilities, and opportunities 

present in any given situation. Financial intelligence 

plays a key part in not only assessing the level of instability, but also in suggesting ways to bring instability 

back under control. This is where threat finance comes 

into play.

WHAT IS THREAT FINANCE?

Threat finance is the means and methods used by 

the adversary to ensure their economic survival. The 

term “adversary” refers to individuals and organizations that pose a threat to national and international 

security, including, but not limited to, a wide range of 

actors such as terrorist organizations, narco- and hu-
10

man traffickers, transnational organized crime groups, 

and cyber criminals. Put simply, threat finance is how 

bad guys make, hide, move, and spend their money. 

Understanding threat finance means understanding 

the various mechanisms and networks of third parties 

that enable that to happen.

Adversaries engage in a wide variety of activities, 

both legitimate and illegitimate, to secure their cash 

flow and to maintain their assets. Activities to that aim 

include kidnapping, extortion, arms dealing, drug 

dealing, human trafficking, counterfeiting, cybercrime, and fraud. Legitimate activities include businesses and financial investment such as financial securities trading, as well as other types of investments 

in commodities and real estate. Where the sources of 

funding are illegitimate, money laundering occurs in 

an effort to make the money appear legitimate to conceal its criminal origins. The instruments for money 

laundering are extensive and include the abuse of 

shell companies, mortgages, insurance products, precious stones, real estate, high value goods, charities, 

and banks.12

Counter threat finance (CTF), on the other hand, 

refers to activities intended to undermine those 

threats. This is typically achieved through the use of 

financial intelligence and a number of other available 

measures such as asset seizures, economic sanctions, 

and anti-money laundering regimes. The stakeholders of CTF are broad, ranging from governments, law 

enforcement, and the military to the private sector, to 

include banks, insurance companies, mortgage lenders, money service businesses (MSBs), law firms, accountancy firms, and real estate agents.

Financial intelligence is at the heart of CTF strategies, even though the terms “threat finance” and “financial intelligence” are often used interchangeably. 
11

In addition, the definition of both terms can appear 

ambiguous due to their dynamic nature. This should 

not be seen as a negative, as it is the fluid nature of 

these tools that will prove to serve well against the 

equally ambiguous threat environment outlined at the 

beginning of this monograph. As such, financial intelligence and the use of CTF strategies will be critical in 

unravelling the complexity of the threats that reveal 

themselves through financial networks.

FINANCIAL INTELLIGENCE

The use of financial intelligence in defense has 

improved in recent years, but nevertheless remains 

rudimentary compared to the analysis provided in 

the private sector, such as by investment banks. Its 

use in defense also displays a tendency to over focus 

on individual strands or components of finance. Although “following the money” is a key part of developing financial intelligence, this alone is not enough. 

It is only the starting point. What really matters is the 

interpretation of the data so that the intelligence gathered can be used to help achieve a given objective. In 

other words, the key is in the analysis of what that 

financial raw intelligence actually means, and how it 

can be used.

Thus the same principle applies to financial intelligence as to intelligence in general. A common mistake 

is to consider “intelligence” as being synonymous 

with “information.” However, information by itself is 

not intelligence. Information plus analysis equals intelligence. So without analysis, there is no intelligence. 

Misuse of the term has also led to the phrase “collecting intelligence” instead of “collecting information.” 

Intelligence is not what is collected; it is what is pro-
12

duced after collected data is evaluated and analyzed. 

While this should to be a basic principle of established 

intelligence disciplines, its application in the field of 

financial intelligence is even more insufficient than in 

other areas of intelligence assessments. 

Furthermore, this analysis requires thoughtful 

contemplation that results in conclusions and recommendations. Computers may assist with analysis by 

compiling large amounts of data into an easily accessible format, but this is still only collated data; it is not 

analyzed data or information, and, as such, falls far 

short of being intelligence. 

The same applies to financial intelligence in that 

even when valuable financial data is collected, the 

mere collation of such information is in itself not altogether helpful. The value is in the interpretation, 

without which CTF strategies cannot be operationalized fully. The significance and its relevance to the 

military is that the correct interpretation can be used 

to reveal patterns of enemy behavior, motivations and 

possible intentions as well as lifestyles and networks, 

all of which will impact directly upon military operations within a COIN environment. 

After all, money is in itself just paper or coins. 

What makes money so important to people is its ability to transform into power, lifestyle, influence, food, 

shelter, weapons, a wife (or more than one in some 

cultures), family, realization of dreams, and more. In 

other words, it is the corresponding economic value 

as opposed its mere financial value that is at stake. As 

such, money, or financial intelligence, must be understood within its broader economic context. 
13

SECURITY ECONOMICS

Threat finance is a component of security economics which is the analysis of the economic aspects of 

human-induced insecurity, such as terrorism and organized crime. Many security threats are driven by 

the desire for economic gain, either as an end in itself, 

or to assist in achieving an ultimate end. In other cases, economic factors can be used to determine likely 

future human actions. For example, the decision for 

an individual to join either the Taliban or the Afghan 

army is often based on economic factors as opposed 

to ideology alone. There are undoubtedly individuals 

with strong beliefs that will not be swayed by economic factors. However, for the majority, the ability 

to survive economically will be the main factor. 

This equally applies to the wide network of individuals in the financial network that enable threat 

finance to take place, referring for example to individuals who work in the financial system who may 

be willing to turn a blind eye to certain customers for 

personal economic gain, especially if the risk is considered to be minimal. For example, a mortgage salesman 

may be willing to turn a blind eye to certain risks in 

order to meet his monthly sales target. Internal policy 

and the existence of internal compliance officers are of 

limited effectiveness in deterring such activity when 

economic motivations override ethical considerations. 

As such, the broader economic considerations must be 

part of any CTF strategy.
14

BRIEF HISTORY OF THREAT FINANCE

The concept of threat finance originated from terrorist finance. The events of 9/11 not only brought terrorism to the top of the political agenda for the United 

States and its allies, but highlighted the importance of 

tackling terrorist finance, which was acknowledged 

as being the lifeblood of terrorism. It was recognized 

that by disrupting the terrorist funding supply chain, 

it was possible to mitigate and maybe even prevent 

further terrorist attacks.13

However, as the interest in terrorist finance intensified, so too did the realization of its complexity. Furthermore, as the depth of understanding increased, it 

became clear that the subject of terrorist finance could 

not be looked at in isolation. It is this realization that 

gave birth to the term “threat finance” which examines not only terrorist finance, but also other strands 

of threat finances, referring to the finances of a wide 

range of adversaries to include terrorist organizations, 

narco- and human traffickers, transnational organized 

crime groups, and cyber criminals. 

CTF EFFORTS TO DATE

Following the 9/11 attacks, the first financial strike 

by the United States in the so-called “global war on 

terror” came in the form of Executive Order 13224,14

which targeted the financial assets of organizations 

and individuals linked to terrorism, including al-Qaeda. Executive Order 13224 was followed by numerous 

initiatives by the United States, the United Kingdom 

(UK), and various international bodies creating many 

new organizations with the goal of attacking terrorist 

financial networks. These multilateral initiatives led 
15

to the designation of 315 entities and seizures amounting to $200 million (£106 million)15 in monetary and 

other assets in over 1,400 accounts worldwide, as well 

as the arrests of over 4,000 suspects,16 including many 

senior al-Qaeda operatives, making the countering of 

terrorist finance one of the most active dimensions in 

the global war on terror.

The events of 9/11 also led to increased international cooperation. Over 100 countries have offered 

increased intelligence support leading to intensified 

counterterrorist operations by more than 200 intelligence and security services worldwide.17 In addition, at the Asia-Pacific Economic Cooperation Forum 

(APEC) Summit in Shanghai, China, in October 2001, 

APEC leaders issued a statement on counterterrorism 

in which they strongly condemned the 9/11 attacks 

and pledged to improve counterterrorism cooperation 

through a number of means. 

These means have included putting in place appropriate financial measures to prevent the flow of funds 

to terrorists, including work on combating financial 

crimes through the APEC Finance Ministers Working 

Group on Fighting Financial Crime, as well as more 

involvement in related international standard setting 

regimes. These initiatives have led to agreements to 

undertake early and constructive consultation prior 

to designating terrorist assets, exchanging information on national legal criteria required to freeze terrorist funds, and updating global assessments of 

frozen terrorists’ funds. However, the stakeholders 

of CTF are not restricted to governments, militaries, 

and the law enforcement community but extend to the 

private sector.
16

PRIVATE SECTOR

The aim of CTF in general is to create a financial 

environment that is hostile to adversary organizations. With that in mind, governments and regulators 

are continuing to introduce new laws and regulations 

to keep up to pace with the ever mutating modus operandi of individuals involved in threat finance. The 

requirement to comply covers not only financial institutions, but also other organizations such as estate 

agents, legal firms, and accounting firms. Together, 

the private sector can be described as being the first 

line of defense for CTF strategy and operations. At the 

heart of the Anti-Money Laundering (AML) regimes 

is the concept to “Know Your Customer” (KYC) and 

the submission of Suspicious Activity Reports (SARs), 

both of which are rich sources of financial intelligence.

Know Your Customer.

The KYC requirement is essentially the due diligence procedures which should be carried out as part 

of the initial client acceptance procedures. These include the verification of identity through the presentation of personal identification documentation such 

as a passport, supported by utility bills to verify the 

address of the potential customer. Other risk factors to 

be taken into consideration include the geographical 

location of the client (whether this is categorized as a 

high-risk country), as well as whether the client is registered as a politically exposed person (PEP), a term 

describing someone who has been entrusted with a 

prominent public function, or an individual who is 

closely related to such a person. Examples include 

current or former senior officials in the executive, leg-
17

islative, administrative, military, or judicial branch of 

a foreign government (elected or not); a senior executive of a foreign government-owned commercial enterprise; being a corporation, business, or other entity 

formed by or for the benefit of any such individual; an 

immediate family member of such an individual; or 

any individual known to be a close personal or professional associate. 

PEPs generally present a higher risk for potential 

involvement in bribery and corruption by virtue of 

their position and the influence that they may hold. As 

such, they are more closely monitored for the purpose 

of CTF activities. The purpose of monitoring financial 

transactions is so that any unexplained or potentially 

suspicious activity can be reported to the Financial Intelligence Unit (FIU) of that country.

Suspicious Activity Reports (SARs).

A SAR is a report submitted by organizations such 

as financial institutions to include banks, mortgage 

providers, and insurance companies, as well as real 

estate agents, law firms, and accounting firms, to report suspicious or potentially suspicious financial activity to the FIU. Each jurisdiction has its own FIU. For 

example, the Financial Crimes Enforcement Network 

(FinCEN), which is a bureau of the U.S. Department 

of the Treasury, is the FIU for the United States. Its 

equivalent (in terms of its role as the country’s FIU) in 

the UK is the National Crime Agency (NCA), which is 

a law enforcement agency.

SARs include detailed information about financial 

transactions that are, or appear to be suspicious. Reporting institutions are required to categorize these 

transactions as either potential money laundering or 
18

terrorist financing activity. The FIU collates the SARs 

received and makes the reports available to regional 

law enforcement agencies based on the geographical 

location of the account holder. It is a requirement in 

the UK that all financial institutions have a system in 

place to monitor financial transactions and to report 

any suspicious activity to the FIU.18

The first stage of the risk-based financial monitoring process begins with financial profiling. Financial 

profiling takes into consideration factors such as age, 

profession, known income, and expenditure. Other 

factors such as peer group analysis are used to set parameters indicating normal activity. Financial transactions are then monitored using the rules derived from 

the financial profiles. Any transactions that fall outside these “normal” parameters flag up an alert which 

is subsequently investigated by one of the bank’s 

specialist financial investigators.

SARs can provide an essential pool of financial intelligence and place the private sector in the forefront 

of the fight against terrorism and crime. SARs, also 

known as disclosures, contribute intelligence to existing law enforcement operations, identify the proceeds 

of crime, and initiate investigation into previously 

unknown criminal activities. Unusual or suspicious 

activities can also be identified not only through the 

monitoring of transactions, but also through monitoring customer contacts, such as meetings, discussions, 

and in-country visits, as well as third party information such as newspapers, the internet, and vendor 

databases. Knowledge of the client’s environment 

in terms of an understanding of the political situation in his home country may further contribute to 

its analysis. 
19

SMART SANCTIONS

Existing CTF measures which target specific individuals and organizations responsible or associated with the funding of terrorism can be described 

as falling under the category of ”smart sanctions.”19

The origin of smart/targeted sanctions predates the 

events of 9/11. A brief background may be helpful in 

understanding the concept which led to its development. Prior to the existence of smart sanctions, the use 

of standard economic sanctions against enemy states, 

including those which supported terrorism, was commonplace. However, traditional economic sanctions 

have long been recognized as being ineffective. In addition, they possess a highly undesirable side effect 

in the form of an indiscriminate impact on a country, 

which can entail severe negative humanitarian consequences for the civilian population.20

This side effect is particularly of concern in the context of terrorism. International terrorism frequently 

utilizes the suffering of innocent civilian populations 

in two ways. First, the victimhood of those people 

is emphasized, either to the victims themselves or 

to those who empathize with those individuals. The 

goal is to radicalize those individuals so that they can 

either be recruited into the terrorist organizations or 

provide other means of support. 

Second, examples of unjust treatment are used to 

attract funding, which in turn is used for the purpose 

of financing terrorism. This is of particular importance, 

because the origin of much of the donor funding is 

derived through appealing to the charitable nature of 

wealthy individuals who may or may not be aware of 

the ultimate purpose of their financial donations.21
20

WHAT COUNTER THREAT FINANCE 

STRATEGIES CAN DO

The targeting of the financial, and perhaps more 

importantly, the economic base of an organization, 

will not only impact the operational capability of that 

organization, but can ultimately lead to its destruction. To date, CTF strategies have been used predominantly for the purpose of disruption. However, the 

potential application of CTF strategies goes far wider. 

They have the potential to be a multifaceted weapon, 

capable of tackling a number of issues relevant to the 

military not only in terms of enemy disruption, but for 

detecting impending instability.

For example, at a macro level, the movement of 

money has the ability to provide early warning signals of impending activity. If people (especially key 

individuals and organizations who possess the best 

local knowledge) are moving their money and assets 

to another country, this could signify expectancy of 

future instability with potential security implications. 

Furthermore, if financial/economic migration intensifies sharply, this could be catastrophic for the region 

in itself, as the mass migration of money may cause 

economic collapse, again leading to social unrest. 

In such situations, it would be the role of the international community to intervene to provide financial assistance to stabilize the economic situation. 

Although the military would not be involved in this 

stage of the process, this is an unstable situation which 

could easily escalate with numerous security implications of direct relevance to the military. As such, intelligence assessments of these warning signs should be 

observed and tracked carefully by military planners.
21

Similarly at a micro level, the movement of money 

can signify impending action, or equally important, 

inaction by adversary organizations allowing the military to plan its own operations accordingly. Here, the 

proverb attributed to both Napoleon and Frederick the 

Great that “an army marches on its stomach” (“C’est la 

soupe qui fait le soldat”) translated as the “soup makes 

the soldier,” stands true. The proverb suggests that a 

group of soldiers or workers can only fight or function 

effectively if they have been well fed.22 What is needed 

to feed soldiers is, of course, money to buy the food. In 

addition to the food of the proverb, soldiers or insurgents depend for effective fighting ability on shelter 

or accommodation, logistic support for movement, 

medical services to treat the injured, and supplies of 

weapons and ammunition. In addition, money is also 

needed to buy loyalty and increase morale, as well 

as care for the relatives of the soldiers/insurgents in 

the event that they do not survive a battle, and leave 

family behind that require support. 

Therefore, when payments are delayed or not 

made, the entire logistical supply chain of the essentials of food and other vital supplies becomes disrupted, impacting heavily on the physical and psychological state of those fighters. This, in turn, will affect not 

only their ability, but also their motivation and willingness to fight. As such, financial intelligence is able 

to serve as a good indicator of the level of morale, as 

well as the combat capability of the insurgents. 

Although more work has been achieved in this 

field at a local level (in country), there are additional 

upstream factors that impact upon local circumstances, which also need to be taken into consideration. It 

is also important to understand the various sources 

of financial information that can be used to produce 

financial intelligence for this purpose.
22

SOURCES OF FINANCIAL INFORMATION

Financial intelligence is the end product of analysis 

of information gathered about the financial affairs of 

individuals or entities of interest. It has the ability to 

complement existing intelligence by providing additional supporting evidence, as well as to provide new 

leads or to detect activities or networks which were 

previously unknown. 

Raw financial data can be obtained from a variety 

of sources in the private and public sectors as well as 

from individuals. Examples in the private sector include those financial institutions and service providers already listed, as well as MSBs such as Western 

Union or Informal Value Transfer Services (IVTS). 

It is worth noting that there is a wealth of data not 

currently utilized which falls outside the previously 

mentioned SARs. Many banks, for example, have the 

mechanisms in place to enable them to monitor and 

detect not only the financial transactions themselves, 

but also where the money is coming from, where it 

is going, changes of address, contact numbers, and 

so forth. 

However, it should also be noted that the private 

sector is not an unlimited resource. Such organizations are bound by laws and regulations as well as 

internal policies, and client data is protected by data 

protection and human rights legislation. However, if 

the questions are framed correctly and the organizations are approached in the right way, it is possible to 

access this data which can be extremely valuable.

Although the monitoring and reporting requirements mentioned earlier relate to the regulated sector, 

this does not mean that the unregulated sector also 
23

does not hold valuable financial intelligence. IVTS 

such as Hawala23 retain transactional data which can 

be highly relevant.24 The challenge is that due to the 

lack of standardization,25 some of the information 

made be difficult to interpret without the help of the 

Hawaladar.

26 Furthermore, as there is no regulatory requirement for holding onto data, historic transactions 

may be discarded, once the business has concluded 

(i.e., the financial transaction has been made), and it 

is entirely at the Hawaladar’s discretion how long he 

wishes to maintain records.27

Financial information can also be provided by 

various private sector organizations where the core 

business is not financial. Examples include retail outlets such as supermarket chains that provide loyalty 

cards. Such information is particularly useful in that 

the stores often offer a variety of services to include 

insurance, communications (mobile phones, landline 

phones and internet), as well as financing, all of which 

is a rich source of financial information. In addition, 

the stores’ delivery services for many items such as 

food, furniture, and electrical goods, provide valuable 

data in terms of addresses connected to the account 

holder. Airline companies, utility providers such as 

electricity or gas, mobile telephone and broadband 

providers, and mail delivery companies also provide 

valuable financial information as well as additional information such as telephone numbers and addresses. 

M-transfers, also referred to as mobile money, mobile money transfer, and mobile wallet, generally refer 

to payment services made via a mobile device such as 

a mobile phone. Instead of paying with cash, check, 

or credit cards, a consumer can use a mobile phone to 

pay for a wide range of services, as well as for digital 

or hard goods. Such services have become increas-
24

ingly popular and widespread, especially in developing countries, where the formal banking system may 

be limited or nonexistent. This forms a relatively new 

method of moving money or paying for goods, in that 

the technology that is needed, namely a mobile device 

and connection to the internet, have only been in existence since the late-1990s.28

In addition to M-transfers, on-line auction houses 

such as EBay and Amazon can also provide valuable 

sources of financial information.29 Although their purpose and use is predominantly legitimate, as with the 

Hawala system, there is on-going concern as to possible 

use for criminality due to inadequate regulations and 

loopholes in the law, which has diluted the requirement to report suspicious transactions. Also, even 

where regulations exist, since they were developed 

with bank transactions in mind they do little to cater 

to M-transactions which are typically small value high 

volume transactions. 

In addition, there are challenges in terms of how 

long records of transactions are required to be kept. 

Nevertheless, it must be recognized that this is potentially a good source of financial information which 

could be utilized. Furthermore, it is likely that as with 

any emerging technology or service, regulations will 

be enhanced once the dangers of not doing so are 

further recognized.

Financial intelligence can also be obtained from 

public sector sources such as government departments dealing with tax and social benefits. It is also 

important to understand the ways in which illegitimate money flows are moved. For this, an appreciation of money laundering and of the various vehicles 

used to launder money are necessary.
25

Money Laundering.

Much of existing counter threat finance strategies 

relies upon existing anti-money laundering (AML) 

regimes enforced by legislation and regulation. However, there are two main challenges to this approach. 

The first is that the AML regimes were initially introduced in the 1990s in response to the laundering of 

the proceeds of narcotics trafficking related money.30

Although the AML regimes have been modified to 

include other aspects of threat finance, such as terrorist finance, critics argue that this has simply been 

an “add-on” which fails to tackle the issue of terrorist financing appropriately.31 The existing approach 

is better described as being “one size fits all” as opposed to a tailored approach to tackle finances relating to terrorism. Nevertheless, the main benefit of the 

AML regimes is that financial information is captured, 

which can then be interrogated by the investigating 

authorities.32

A further challenge is that money laundering is understood by many simply as a process whereby “bad” 

money turns into “good” money.33 Unfortunately, 

money does not only come in two simple shades of 

black and white. White money, also known as clean 

money, refers to “ordinary” money that is obtained in 

small denominations through hard work and related 

bonuses, prudent investment, or inheritance.34 The 

opposite of clean money is dirty or “black” money, 

which is obtained through criminal means. But there 

is also “grey” money, money that the owner wishes 

to disassociate him or herself from, even though its 

origins may not have been illegal. 

One example is where an individual may not wish 

his spouse, partner, or relatives to be aware of his 
26

wealth for a variety of reasons, such as impending divorce. Another example is where a profitable business 

may wish to maintain a low profile to avoid attracting attention which may result in increased competition.35 In addition, there is “hot” money, referring to 

financial movements stimulated by adverse changes 

in economic, social, and/or political conditions. A further consideration is that the best place to hide black 

money is with white or grey money, and the movements are often made unnecessarily complex in an attempt by the criminal to put off the investigator as a 

result of the lack of transparency, as well as the time 

needed to unravel the financial audit trail. 

HOW EFFECTIVE HAS CTF BEEN TO DATE?

The importance of tackling the finances of adversary organizations has long been recognized. However, despite the existence of relevant legislation and 

regulation, the current environment continues to favor 

the adversary. For example, some economists have 

calculated that less than 1 percent of terrorist finances 

have been captured to date.36 There are many reasons 

for this, but one is because of limited understanding as 

to what threat finance is in terms of first, how to detect 

it, and second, knowing what to do about it. Although 

the understanding of each of the individual components of threat finance has undeniably increased in recent years, counter threat finance strategies have not 

been particularly effective in real terms. 

One reason is in relation to the way in which CTF 

strategies are understood and applied. The understanding of the subject is often limited and over-simplistic and, as such, has not been fit for the purpose. 

In addition, finance is often treated as a stand-alone 
27

subject. Instead, it should be treated not only as valuable intelligence in its own right, but also a tool that 

enables different types of intelligence to be brought 

together, and to validate or discard existing intelligence as appropriate. This is particularly relevant in 

an era where intelligence fusion is continuing to be 

recognized as key to the future of defense intelligence.

Lessons Not Learned.

Financial disruption strategies to date, typically 

characterized by their disjointed nature, have not 

been particularly effective. For example, in Afghanistan, in some cases efforts to disrupt Taliban finances 

are likely to have done more harm than good in terms 

of the overall COIN effort. A case in point is the pursuit of Hawaladars, an easy target, where the broader 

economic consequences of such actions are frequently 

overlooked. The disruption of a single Hawaladar, 

especially if the action is not justified, will do more 

to promote insurgency than to prevent it. In general, 

there is an overemphasis on disruption, where the 

goals are so focused that they frequently fail to acknowledge the damage that action might be causing 

in the wider context, which in turn exacerbates the 

underlying problem.

CONCLUSIONS 

CTF strategies have the potential to become “hyper-strategic” weapons due to the fact that “financial 

war” is easily manipulated and allows for concealed 

actions, as well as having the capacity to be highly destructive. Furthermore, financial warfare is likely to be 

an increasing form of conflict due to its position which 
28

lies at the intersection of powerful long-term trends in 

technology, networks, information, and finance. The 

precise targeting feature of financial warfare, relative 

to conventional economic warfare, marks a significant 

change in the nature of conflict.

In addition, the use of finance should be recognized 

as a tool for influence. Financial intelligence holds 

special utility in that it is easily controlled to actionable outcomes designed to influence target behavior, 

the target being any individual or organization in the 

financial logistical supply chain. Influence is reliant on 

the successful manipulation of incentives and disincentives. This involves shaping the spectrum of options that are available to groups through tailored and 

focused activities aimed at specific pressure points.

However, in order to achieve this, there must be 

the willingness to embrace more complex financial 

analysis to include “high” finance. To date, there has 

been a tendency to overfocus on targeting the vast 

volume of low hanging fruit; the “smart” targeting 

of “low volume, high return” targets must also be encouraged. Given the constraints in available resources, every effort must be made to pursue actions that 

optimize return on investment. In order to further the 

U.S. Army’s development and capability in effectively 

operationalizing CTF strategies in future years, the 

following recommendations should be considered.

FUTURE COUNTER THREAT FINANCE

STRATEGIES: RECOMMENDATIONS FOR THE 

U.S. ARMY

1. Integration—Counter finance strategies should

be fully integrated as part of a comprehensive COIN/

CT/stabilization strategy, to ensure that short-, me-
29

dium-, and long-term financial targeting strategies are 

adopted to address both upstream and downstream 

finances to maximum effect.

2. Embrace Complexity—The willingness to embrace more complex high finance methods must be developed. In order to address the tendency to overfocus 

on targeting the vast volume of low hanging fruit, the 

smart targeting of “low volume, high return” targets 

must be encouraged.

3. Influence—The use of finance as a tool for influence should be further explored through developing 

knowledge of the broader financial network in order 

to be able to identify suitable pressure points.

4. Knowledge and Intelligence Gaps—These gaps 

should be addressed through education, the use of 

suitably qualified expertise, and by carrying out a selfassessment to ensure that the right questions are being 

framed, and that the right people are being engaged to 

obtain the necessary answers.

5. Global Financial Audit Trail—A deeper understanding of the broader global financial networks and 

investment strategies will help identify key vulnerabilities in the networks.

6. Financial Intelligence—Finances, including 

economic assets, should be viewed not only as a target subject to disruption, but also as a lucrative intelligence source. The existing tendency to focus on individual strands or components of finance should be 

avoided and replaced with a conscious effort to adopt 

a networked approach to the collection and analysis of 

financial data. Collation of financial data by following 

the money should be supported by better analysis to 

enable better use of that data. In other words, better 

interpretation of financial data focusing on possible 

application is needed. Appropriate financial analysis/
30

intelligence will reveal patterns of enemy behavior, 

motivations, possible intensions, lifestyles, networks, 

as well as morale and readiness to fight.

7. Kinetic vs. Influence—Caution should be exercised against the overuse of kinetic targeting. The 

impact of such action must first be properly assessed 

not only in terms of the enemy, but the wider network 

which will consist of both those who are part of the adversary network, as well as civilians who should not 

be regarded as collateral damage—either in a physical 

or a financial/economic sense. Instead, consideration 

should be given to the possibility of replacing kinetic 

action with influence strategies whenever possible.

8. Hawala System—Targeting the Hawala system, 

as well as associated Hawaladars, must be carried out 

with caution, taking local economic factors into consideration. Cultural considerations must form part of 

any finance targeting to enable effective disruption 

operations to take place while mitigating side effects.

ENDNOTES

1. Harold A. Gould and Franklin C. Spinney, 4GW is Here! 

Center for South Asian Studies Newsletter, Charlottesville, VA: 

University of Virginia, 2001, available from www.virginia.edu/soasia/newsletter/Fall01/warfare.html, accessed on October 10, 2013; 

and www.smallwarsjournal.com/documents/ 4gw.htm, accessed on 

October 10, 2013.

2. Australian Government, “Tackling Wicked Problems: a 

Public Policy Perspective,” Canberra, Australia: Australian Public Service Commission, 2007, available from www.apsc.gov.au/

publications-and-media/archive/publications-archive/tackling-wickedproblems, accessed on March 3, 2014.

3. Huns were a nomadic horse people migrating from Central Asia. They appeared in Europe around 370 AD and caused 

considerable harm to the Roman power in the West. See Max 
31

Boot, Invisible Armies: An Epic History of Guerrilla Warfare from Ancient Times to the Present, New York and London, UK: Liveright

Publishing Corporation, 2013, pp. 26-27.

4. Ibid.

5. Robert Mackay, “Can Soldiers be Victims of Terrorism?” 

New York Times, November 20, 2009.

6. United Nations Secretary General Report, November 2004.

7. Donald Greer, The Incidence of the Terror during the French 

Revolution: A Statistician Interpretation, Cambridge, MA: Harvard 

University Press, 1935.

8. Chris Donnelly and David McOwat, Understanding the 

Revolution in the Nature of Conflict, Global Perspective Statecraft 

Paper, October 23, 2012, available from www.statecraft.org.uk/

research/understanding-revolution-nature-conflict www.statecraft.org, 

accessed on April 19, 2014.

9. The Future Character of Conflict, London, UK: Ministry of 

Defence, available from www.gov.uk/government/uploads/system/

uploads/attachment_data/file/33685/FCOCReadactedFinalWeb.pdf, 

accessed on April 10, 2014.

10. Donnelly and McOwat, Understanding the Revolution in the 

Nature of Conflict.

11. Chris Donnelly and David McOwat, Adapting Forces to Deal 

with New Challenges to National and International Security, Global 

Perspective Statecraft Paper, October 18, 2012, available from 

www.statecraft.org.uk/research/adapting-forces-deal-new-challengesnational-and-international-security, accessed on April 19, 2014.

12. Shima D Keene, Threat Finance: Disconnecting the Lifeline of 

Organized Crime and Terrorism, Abingdon, UK: Gower Publishing, 

2011, p. 162.

13. Ibid., p. 5.
32

14. U.S. Department of the Treasury, Office of Foreign Assets 

Control, “Executive Order 13224, Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, 

or Support Terrorism,” available from www.treasury.gov/resourcecenter/sanctions/programs/documents/terror.pdf, accessed on April 

13, 2014.

15. Transnational Institute, “Global Enforcement Regimes 

Transnational Organized Crime, International Terrorism and 

Money Laundering,” Report from the TNI Crime and Globalisation seminar, Amsterdam, The Netherlands, April 28-29, 2005, 

p. 20, available from www.tni.org/sites/www.tni.org/archives/crimedocs/enforce.pdf, accessed on April 13, 1014.

16. Ibid.

17. Dean C. Alexander and Yonah Alexander, Terrorism and 

Business, New York: Transnational Publishers Inc., 2002. p. 184.

18. Trifin J. Roule and Jeremy Kinsell, “Legislative and Bureaucratic Impediments to Suspicious Transaction Reporting 

Regimes,” Journal of Money Laundering Control, Vol. 6, No. 2, 

2002, p. 151.

19. An unrelated example current at the time of writing is the 

U.S. and Canadian sanctions against key individuals close to the 

Russian leadership over events in Ukraine. These smart sanctions, 

precisely targeting specific influencers, are distinct from the more 

generic and less effective sanctions introduced at the same time 

by, for example, the European Union (EU). 

20. Peter L. Fitzgerald, “Smarter Smart Sanctions,” International Studies Review, Vol. 26, 2007, p. 37.

21. Keene, Threat Finance, p. 194.

22. Emanuel Strauss, Concise Dictionary of European Proverbs, 

New York and Abingdon, UK: Routledge, 1998.

23. Hawala is one of many informal money transfer systems in 

the world, collectively known as Informal Value Transfer Systems 

(IVTS). IVTS is a trust-based system used to transfer funds across 
33

countries and continents. In addition, alternative terminologies 

such as hawala, hundi, fei ch’ien, and phoe kuan are used, depending 

on the geographic location and the ethnic group associated with 

the system. Hawala is a term that originated in India and is associated with trust, reference, or exchange.

24. P. M. Jost and H. S. Sandhu, “The Hawala Alternative Remittance System and Its Role in Money Laundering,” Interpol 

General Secretariat H.S, 2000.

25. Nikos Passas, “Informal Value Transfer Systems and 

Criminal Organizations: A Study into So-Called Underground 

Banking Networks,” Boston, MA: Northeastern University, 

1999, p. 9.

26. A Hawaladar is the Hawala agent.

27. FinCen, “Informal Value Transfer Systems,” FinCen Advisory, United States Department of the Treasury Financial Crimes 

Enforcement Network Advisory Issue 33, 2003, p. 2.

28. Shima D. Keene, “Terrorism and the Internet: A Double 

Edged Sword,” Journal of Money Laundering Control, Vol. 14, No. 

4, 2011, p. 359.

29. F. N. Baldwin, “The Financing of Terror in the Age of the 

Internet: Wilful Blindness, Greed or a Political Statement?” Journal of Money Laundering Control, Vol. 8, No. 2, 2004, p. 127.

30. Barry A. K. Rider, “Law: The War on Terror and Crime 

and the Offshore Centres: The ‘New’ Perspective?” in Donato Masciandaro, ed., Global Financial Crime: Terrorism, Money 

Laundering and Offshore Centres, Farnham, Surrey, UK: Ashgate 

Publishing, 2004, p. 92.

31. Keene, Threat Finance.

32. Michelle Gallant, “Promise and Perils: The Making of 

Global Money Laundering, Terrorist Finance Norms,” Journal of 

Money Laundering Control, Vol. 13, No. 1, 2010, p. 175.
34

33. Petrus C. van Duyne, Melvin R. J. Soudijn, “Hot Money, 

Hot Stones and Hot Air: Crime-Money Threat, Real Estate and 

Real Concern,” Journal of Money Laundering Control, Vol. 12, No. 

2, 2009, p. 173.

34. G. Merlonghi, “Fighting Financial Crime in the Age of 

Electronic Money: Opportunities and Limitations,” Journal of 

Money Laundering Control, Vol. 13, No. 3, 2010, p. 202. 

35. Jeffrey Simser, “Money Laundering and Asset Cloaking 

Techniques,” Journal of Money Laundering Control, Vol. 11, No. 1, 

2008, p. 15.

36. Loretta Napoleoni, Modern Jihad: Tracing the Dollars behind 

the Terror Networks, London, UK: Pluto Press, 2004, p. 170.
U.S. ARMY WAR COLLEGE

Major General William E. Rapp

Commandant

*****

STRATEGIC STUDIES INSTITUTE

and

U.S. ARMY WAR COLLEGE PRESS

Director

Professor Douglas C. Lovelace, Jr.

Director of Research

Dr. Steven K. Metz

Author

Dr. Shima D. Keene

Editor for Production

Dr. James G. Pierce

Publications Assistant

Ms. Rita A. Rummel

*****

Composition

Mrs. Jennifer E. Nevil