Terrorism and Transnational Crime: Foreign Policy Issues for Congress
Released: 2013-06-11T00:00:00

Summary:
This report provides an overview of transnational security issues related to patterns of interaction among international terrorist and crime groups. In addition, the report discusses the U.S. government's perception of and response to the threat. It concludes with an analysis of foreign policy options.
In recent years, the U.S. government has asserted that terrorism, insurgency, and crime interact in varied and significant ways, to the detriment of U.S. national security interests. Although unclassified anecdotal evidence largely serves as the basis for the current understanding of criminal-terrorist connections, observers often focus on several common patterns.
Partnership Motivations and Disincentives: Collaboration can serve as a force multiplier for both criminal and terrorist groups, as well as a strategic weakness. Conditions that may affect the likelihood of confluence include demand for special skills unavailable within an organization, greed, opportunity for and proclivity toward joint ventures, and changes in ideological motivations. Appropriation of Tactics: Although ideologies and motivations of an organization may remain consistent, criminals and terrorists have shared similar tactics to reach their separate operational objectives. Such tactics include acts of violence; involvement in criminal activity for profit; money laundering; undetected cross-border movements; illegal weapons acquisition; and exploitation of corrupt government officials. Organizational Evolution and Variation: A criminal group may transform over time to adopt political goals and ideological motivations. Conversely, terrorist groups may shift toward criminality. For some terrorist groups, criminal activity remains secondary to ideological ambitions. For others, profit-making may surpass political aspirations as the dominant operating rationale. Frequently cited terrorist organizations involved in criminal activity include Abu Sayyaf Group (ASG), Al Qaeda's affiliates, D-Company, Kurdistan Worker's Party (PKK), Revolutionary Armed Forces of Colombia (FARC), Haqqani Network, and Hezbollah.
To combat these apparent criminal-terrorist connections, Congress has maintained a role in formulating U.S. policy responses. Moreover, recent Administrations have issued several strategic documents to guide U.S. national security, counterterrorism, anti-crime, and intelligence activities. In July 2011, for example, the Obama Administration issued the Strategy to Combat Transnational Organized Crime, which emphasized, among other issues, the confluence of crime and terrorism as a major factor in threatening the U.S. global security interests.
While the U.S. government has maintained substantial long-standing efforts to combat terrorism and transnational crime separately, Congress has been challenged to evaluate whether the existing array of authorities, programs, and resources sufficiently responds to the combined crime-terrorism threat. Common foreign policy options have centered on diplomacy, foreign assistance, financial actions, intelligence, military action, and investigations. At issue for Congress is how to conceptualize this complex crime-terrorism phenomenon and oversee the implementation of cross-cutting activities that span geographic regions, functional disciplines, and a multitude of policy tools that are largely dependent on effective interagency coordination and international cooperation.

subsections: section_title: Introduction
paragraphs: Transnational terrorists and criminals may collaborate, appropriate shared tactics, and otherwise benefit from interaction, resulting in bolstered capabilities, enhanced organizational infrastructure, improved access to resources, and expanded geographic reach. Historical examples also indicate that terrorist and transnational criminal groups may evolve, converge, transform, or otherwise alter their ideological motivations and organizational composition to appear similar. Although information on the extent and nature of criminal-terrorist relationships, including their impact on U.S. national security, remains anecdotal, many view the potential confluence of criminal and terrorist actors, skills, resources, and violent tactics as a cause for concern. Such enhancements may in turn lengthen the duration of insurgencies, extend the longevity and capabilities of criminal and terrorist organizations, and undermine the ability of fragile governments to exert full control of their territory.
Some analysts have identified a series of potentially disturbing patterns that has hastened the expansion of relationships between terrorist and transnational crime groups. First, criminal syndicates appear to be growing in size, scope, and ambition. Globalization has extended their transnational reach, while major developments in technology, trade, and the financial industry have provided them with opportunities to exploit vulnerabilities in emerging criminal sectors, such as cybercrime. Many now maintain a transnational footprint and a flexible and networked membership roster that can adapt more readily to new market niches and establish more fluid alliances with external individuals and groups. 
Second, the nature and activities of terrorist organizations appear to have also changed. Terrorist groups today, particularly those that most threaten U.S. global interests, appear to be motivated primarily by religious rather than nationalist and ethnic separatist imperatives that were common in the 1960s and 1970s. This shift has resulted in extremist movements that elicit sympathy well beyond a specific country or geographic region. Further, terrorist groups appear to have become more resilient, due to a combination of continued state sponsorship or support, as well as entrepreneurial expansion into profitable criminal activities. 
Combined, these trends may suggest an increase in geographic overlap where criminals and terrorists could operate and interact. These patterns may also suggest greater blurring of distinctions between one group and the other, the adoption of activities often attributed to the other, or the ad hoc evolution of a group's objectives based on the security challenges they encounter. Key nodes, where interaction is most likely, include prisons; cyberspace, particularly online opportunities for social networking; and ungoverned or difficult-to-govern spaces, which include regions plagued by endemic corruption, conflict or post-conflict zones where legitimate governance has yet to take root, border regions, free trade zones, and urban mega cities where pockets of poverty, violence, criminality, and impunity from national law prevails. Overlap may also be facilitated by the involvement of negligent or hostile governments and kleptocratic or criminal states that may consider sponsorship or support of criminal or terrorist activity of strategic value.
subsections: section_title: Perceived Threat
paragraphs: The U.S. government has asserted that terrorism, insurgency, and crime interact in varied and significant ways, to the detriment of U.S. national security interests. In January 2012, the Director of National Intelligence (DNI) reported to Congress that transnational organized crime and its links to international terrorism was among the nation's most pressing national security concerns, specifically identifying the following areas of concern for crime-terrorism interaction: 
Nuclear proliferation: "We are aware of the potential for criminal service providers to play an important role in proliferating nuclear-applicable materials and facilitating terrorism." Kidnapping for ransom: "Kidnapping for ransom is increasing in many regions worldwide and generates new and deep income streams for transnational criminal networks ... and terrorist networks." Human smuggling: "Those who smuggle humans illegally have access to sophisticated, forged travel papers and the ability to constantly change their smuggling routes—routes that may span multiple continents before reaching their destinations. Smugglers undermine state sovereignty and sometimes facilitate the terrorist threat." Illicit finance: "Terrorists and insurgents will increasingly turn to crime and criminal networks for funding and logistics, in part because of U.S. and Western success in attacking other sources of funding. Criminal connections and activities of both Hizballah and AQIM [Al Qaeda in the Islamic Maghreb] illustrate this trend."
DNI James R. Clapper's testimony to Congress in 2012 reiterated the findings of the U.S. intelligence community's 2010 review of threats posed by transnational organized crime. In that review, the first of its kind in 15 years, the intelligence community ultimately concluded that such illicit networks have "dramatically" increased in size, scope, and influence internationally. A public summary of the assessment identified a "threatening crime-terror nexus" as one of five key threats to U.S. national security:
Terrorists and insurgents increasingly will turn to crime to generate funding and will acquire logistical support from criminals, in part because of successes by U.S. agencies and partner nations in attacking other sources of their funding. In some instances, terrorists and insurgents prefer to conduct criminal activities themselves; when they cannot do so, they turn to outside individuals and facilitators. Proceeds from the drug trade are critical to the continued funding of such terrorist groups as the Taliban and the Revolutionary Armed Forces of Colombia (FARC). Terrorist organizations such as al-Shabaab and drug trafficking organizations such as the cartels based in Mexico are turning to criminal activities such as kidnapping for ransom to generate funding to continue their operations. Some criminals could have the capability to provide weapons of mass destruction (WMD) material to other terrorist groups, such as Hizballah and al-Qaida in the Islamic Maghreb, though the strength of these drug links and support remain unclear. U.S. intelligence, law enforcement, and military services have reported that more than 40 foreign terrorist organizations have links to the drug trade. Some criminal organizations have adopted extreme and widespread violence in an overt effort to intimidate governments at various levels.
DNI Clapper's testimony to Congress in 2013 additionally noted that the U.S. intelligence community is "monitoring the expanding scope and diversity of 'facilitation networks,' which include semi-legitimate travel experts, attorneys, and other types of professionals, as well as corrupt officials, who provide support services to criminal and terrorist groups."
Other U.S. government documents characterize the confluence of transnational organized crime and international terrorism as a growing phenomenon. Whereas in previous decades criminal and terrorism links occasionally occurred, such connections appear to be taking place with greater frequency today and may be evolving into more of a matter of practice rather than convenience. According to the U.S. Department of Justice (DOJ), recent investigations suggest that international organized criminals are willing to provide logistical and other support to terrorists. According to the U.S. Drug Enforcement Administration (DEA), 19 of 49 (39%) State Department-designated foreign terrorist organizations (FTOs) have "confirmed links to the drug trade" as of November 2011. In 2003, DEA reported that 14 of 36 (39%) FTOs were involved "to some degree" in illicit narcotics activity. For FY2010, DOJ reported that 29 of the top 63 international drug syndicates, identified as such on the consolidated priority organization target (CPOT) list, were associated with terrorists. 
The State Department's 2012 Country Reports on Terrorism describes more than 20 FTOs as having financially profited from criminal activity to sustain their terrorist operations (see the Appendix ). Such listed FTOs include Al Shabaab, Army of Islam (AOI), Al Qaeda in the Arabian Peninsula (AQAP), Al Qaeda in Iraq (AQI), Al Qaeda in the Islamic Maghreb (AQIM), Abu Sayyaf Group (ASG), United Self-Defense Forces of Colombia (AUC), Continuity Irish Republican Army (CIRA), Communist Party of the Philippines (CPP), Revolution People's Liberation Party (DHKP/C), National Liberation Army (ELN), Revolutionary Armed Forces of Colombia (FARC), Moroccan Islamic Combatant Group (GICM), Hamas, Hezbollah, Haqqani Network (HQN), Jemaah Ansharut Tauhid (JAT), Jemaah Islamiya (JI), Lashkar I Jhangvi (LJ), Liberation Tigers of Tamil Eelam (LTTE), Kurdistan Workers' Party (PKK), Shining Path (SL), and Tehrik-e Taliban Pakistan (TTP).
Such government studies reinforce assessments from the late 1990s that predicted an increase in crime-terrorism interactions. For example, in 1997, a U.S. Department of Defense (DOD) task force study on transnational threats concluded that terrorists groups, religious extremists, anti-government militias, narcotics traffickers, and global criminals were "increasingly linked in new and more cooperative ways." In 2000, a U.S. interagency assessment of international crime threats further highlighted growing crime-terrorism interactions. The assessment identified the end of the Cold War as a major contributor to this development. As certain insurgent and extremist groups were no longer able to rely on Soviet-affiliated state sponsors for aid, some increasingly turned to crime as an alternative source of funds. The assessment also concluded that most crime-terrorism interactions were often fleeting, or based on symbiotic arrangements that were nevertheless strained and marked by suspicion. Some groups, however, viewed criminal activity as not only a lucrative source of funding, but also an effective means to advance their political or ideological objectives. Other groups, meanwhile, underwent transformations in which their primary organization motivations would shift from political to (illicit) profit-driven.
section_title: U.S. Government Strategies
paragraphs: To combat this apparent criminal-terrorist connection, recent Administrations have issued several key strategic documents to guide U.S. government efforts and approach the issue from the perspectives of national security, counterterrorism, anti-crime, and intelligence. The Obama Administration's key strategic documents are described below in chronological order.
In August 2009, the Obama Administration issued its National Intelligence Strategy , which included as a primary mission the goal of penetrating and supporting "the disruption of terrorist organizations and the nexus between terrorism and criminal activities."
In May 2010, the Obama Administration issued its National Security Strategy , a broad-ranging document that identified key priorities for the United States. One such priority was to combat "transnational criminal threats and threats to governance"—including the "crime-terror nexus." The 2010 National Security Strategy encouraged a "multidimensional strategy" that emphasized citizen security and harm reduction, disruption and dismantling of illicit networks, and bolstering the capacity of foreign governments to enforce the rule of law.
In April 2011, the U.S. Department of Defense (DOD) issued a Counternarcotics and Global Threats Strategy . The strategy describes an international security environment characterized by a "confluence of dispersed and decentralized global networks of criminals and terrorists." It further states that such networks are "composed largely of individuals and groups that receive occasional support from corrupt government officials" and "are loosely organized and ever-evolving, pragmatically appearing and disappearing for political-criminal gain." The DOD strategy identifies three strategic goals: 
to disrupt and disable actors and activities related to trafficking, insurgency, corruption, threat finance, terrorism, drug precursor chemical distribution in Afghanistan and Pakistan; to sharply reduce illicit drug and drug precursor chemical distribution, as well as related transnational organized criminal threats in the Western Hemisphere, particularly Mexico, Central America, Colombia, and Peru; and to mitigate the size, scope, and influence of targeted transnational criminal organizations and trafficking networks such that they pose only limited, isolated threats to U.S. national and international security.
In June 2011, the Obama Administration issued its National Strategy for Counterterrorism . Included among its eight "overarching goals" was the goal to "deprive terrorists of their enabling means"—terrorist financing and the facilitation of terrorist travel, materiel smuggling, and communications. The Administration's National Strategy for Counterterrorism sought to achieve this goal by 
blocking the flow of financial resources to terrorist groups through sanctions, prosecutions, international cooperation, and diplomatic pressure (money laundering and kidnapping for ransom); and working with international partners to identify and prevent terrorist groups from moving its recruits, operatives, and supplies across borders (human and weapons smuggling).
In July 2011, the Obama Administration issued its Strategy to Combat Transnational Organized Crime . Among its primary objectives was to "defeat transnational criminal networks that pose the greatest threat to national security by targeting their infrastructures, depriving them of their enabling means, and preventing the criminal facilitation of terrorist activities." Key actions described by the strategy to combat the crime-terrorism nexus included the following: 
Enhancing intelligence collection on transnational organized crime threats, particularly the potential role of criminal groups in facilitating WMD terrorism. Exposing vulnerabilities in the international financial system that could be exploited by "terrorist and other illicit financial networks" and applying financial tools and sanctions against such networks. Establishing a "whole-of-government plan" to combat kidnapping for ransom as a means to finance terrorists, among other "bad actors." Developing a "comprehensive approach" to dismantling drug trafficking organizations with connections to terrorist groups. Enhancing foreign capabilities through counterterrorism capacity building, foreign law enforcement cooperation, military cooperation, and the strengthening of justice and interior ministries.
section_title: Patterns in Crime-Terrorism Interaction
paragraphs: Limited unclassified anecdotal evidence largely serves as the basis for the current understanding of criminal-terrorist connections. In the absence of comprehensive data, it is difficult to assess whether such anecdotal cases are indicative of a widespread problem, a growing trend, or isolated observation. What is clear from existing literature on the subject, however, is that crime-terrorism interactions can vary significantly and change over time. The following sections summarize several common patterns of crime-terrorism links, with specific examples drawn from a range of court cases, reports, and news articles. 
subsections: section_title: Partnership Motivations and Disincentives
paragraphs: The underlying rationales for criminal and terrorist group partnerships as well as the conditions that may facilitate the evolution or transformation of a criminal or terrorist group into the other may vary. Collaboration can serve as a force multiplier for both criminal and terrorist groups, bolstering their capabilities, strengthening their infrastructure, and increasing their wealth. On the other hand, partnering could also have the potential of sowing seeds for distrust and competition among illicit actors—vulnerabilities that could be exploited by international security authorities.
From the perspective of a terrorist organization, the primary motivation for partnering or adopting criminal tactics would be to sustain and grow the organization for purposes of pursuing or financing its ideological-based activities. Out of this sense of perceived need, the organization may turn to or rely more heavily on partnering with criminal syndicates for continued viability. Common disincentives for partnering would include increased attention from government authorities; fear of compromising internal security; ideological resistance to illicit endeavors; and the availability of sufficient alternative funding sources, such as state sponsors. 
From the perspective of a criminal syndicate, motivations for cooperating with terrorist organizations would include the near singular purpose of increasing its financial stature. As with terrorist organizations, common disincentives from the perspective of criminal groups may involve increased and unwanted attention from authorities, risk of infiltration, and heightened vulnerability of organization leadership to capture. Criminal groups already in control of lucrative revenue streams may not find the potential for additional business with terrorist groups sufficient to outweigh the costs. Criminal groups may also opt to avoid collaboration with terrorist groups if such interactions would disrupt their relationships with corrupt government officials who are willing to facilitate criminal activities, but not terrorism-related ones.
Conditions that may affect the likelihood of confluence include a lack of in-house capabilities and demand for special skills to conduct particular operations. Some groups may be more hesitant to collaborate with outsiders, depending in part on the nature of the operational environment, the presence of competitors, and the opportunity for contact with and the strength of relations between terrorist and criminal elements. Other barriers to cooperation may include cultural, religious, or ideological differences across groups. On the other hand, motivations such as greed or necessity for organizational viability or expansion may induce some groups to welcome or seek out external partners. 
Individual groups may also transition along an apparent crime-terrorism continuum. Over time, ideologically motivated groups that initially avoid involvement with criminal activities may become increasingly attracted by the lucrative nature of criminal activities. In other instances, criminal groups may become radicalized and apply their criminal expertise to conduct operations that not only result in lucrative illicit profits but also further ideologically oriented goals. In other situations, individuals in a terrorist organization may not follow leadership directives to stay away from individuals in a criminal organization (or vice versa) and may unilaterally develop external relationships. Some analysts suggest that this phenomenon may occur with greater regularity due to the increasingly decentralized nature of terrorist groups and other possible factors.
section_title: Appropriation of Tactics
paragraphs: Criminals and terrorists often share similar tactics to reach their operational goals. These include acts of terrorism and political violence; involvement in criminal activity for profit; money laundering; undetected cross-border movements; illegal weapons acquisition; and government corruption. Changes in the selection of tactics may signify shifts in the strength and capacity of an organization or the ideological desires of the organization's leadership. A criminal group under pressure by authorities or rival criminal groups may react by organizing violent attacks to intimidate the public and deter the government from future pursuit. A terrorist group's loss of state sponsorship may prompt it to find illicit alternatives for funding and operational support. The following sections describe several methods and tactics common to both criminal and terrorist groups, including (1) the use of violence for political effect, (2) crime-for-profit activities, and (3) illicit support activity.
subsections: section_title: Violence for Political Effect
paragraphs: Although more commonly associated with terrorist groups, criminal groups have also occasionally used violence as a tactic to change political and public perceptions. Common past examples have included the use of terrorist-style violence, intimidation, and hostage-taking tactics by the Brazilian prison gang and drug trafficking organization (DTO) Primeiro Comando da Capital (PCC) in 2006. In response to counternarcotics pressure in the 1980s and 1990s, the Medellin cartel conducted a wave of violent attacks on Colombian government and civilian targets, including the explosion of a commercial airliner and a truck bomb. The Italian mafia targeted prominent landmarks, politicians, and government officials in response to law enforcement pressure in the 1990s. 
Drug trafficking-related violence in Mexico, which surged in recent years due to a combination of increased counternarcotics pressure by the government and DTO-on-DTO competition, has at times appeared similar to terrorist-style attacks, with comparable tactics of intimidation. Mexican government officials, for example, have been targeted by traffickers, at times in reprisal for their role in cartel arrests. In May 2008, one of Mexico's highest-ranking law enforcement officials, Edgar Millan Gomez, was assassinated in Mexico City by DTO-affiliated gunmen. In other cases, drug traffickers have deployed small improvised explosive devices (IEDs) against law enforcement officials suspected of working for rival gangs. 
Observers continue to debate whether the use of political violence as a tactic by Mexican DTOs warrants describing such groups as terrorist organizations. Most observers recognize that few instances of Mexican DTO violence appear to be motivated by ideology or a desire to overthrow the Mexican government. According to the State Department's 2012 Country Reports on Terrorism, there was "no evidence that these criminal organizations had political or ideological motivations, aside from seeking to maintain the impunity with which they conduct their criminal activities." Some have suggested that one of these exceptions may have occurred in September 2008, when a deadly attack on Mexico's Independence Day involving throwing grenades into a crowd of revelers that had gathered for a firework display was suspected to have been organized by drug traffickers. Yet, in this case, some traffickers appeared to distance themselves from the attack, joining in the victims' outcry and refusing to take responsibility for the attack. Other incidents that have raised questions about Mexican drug traffickers' motives and tactics include a casino fire that killed 52 civilians in 2011, and was allegedly instigated by Los Zetas. 
section_title: Crime-for-Profit
paragraphs: In addition to organized crime groups, some terrorist organizations may seek funding through criminal activities. Often, the potential profits associated with criminal activity are a motivating factor for both organized crime and terrorist groups. Since the end of the Cold War and corresponding declines in traditional state-sponsored sources of funding, some observers suggest that terrorist groups have become increasingly motivated to generate funds through criminal activity to sustain organizational capabilities. Heightened international counterterrorism measures in the past decade may have further depleted other traditional sources of funds, including private sector donations, which reinforce the desire for terrorist groups to seek alternative funding methods.
Criminal activities conducted for profit may range from local crimes of theft, burglary, and extortion to illicit trafficking of high-value commodities on a transnational scale. Terrorist groups may also "tax" other groups or charge a security or protection fee for permitting illicit trafficking activity to take place in a certain region under their control. Although terrorist groups may engage in criminal activity for fundraising, it is not always the case that such groups lose their ideological motivations. As one researcher explains, "[C]riminality does not imply criminalization. It is entirely possible for armed groups to exploit drugs, smuggling, and extortion without becoming motivated by these activities. Resources do not speak for themselves: simply engaging in criminality does not mean that an armed group exists to be criminal."
The universe of potential crime-for-profit activities is vast. The following list describes three common transnational manifestations: drug trafficking, cigarette smuggling, and kidnapping-for-ransom. 
section_title: Illicit Support Activity
paragraphs: Both criminal and terrorist groups rely on a variety of illicit support activities to further their operations. Although some such activities can be conducted with in-house capabilities and assets, others may require cooperation with external criminal specialists, corrupt "gatekeepers," local and regional "fixers," and "shadow facilitators." The depth and durability of these crime-terrorism relationships for support activities vary. Some terrorist groups view links to outside criminal networks as short-term marriages of convenience, where the actors build ephemeral business ties. These interactions often appear to be distinctly transactional in nature, with one criminal actor or organization providing a specific, tangible service to a terrorist group. In other cases, these relationships will be more synergistic, with terrorist and criminal groups creating enduring coalitions. In such coalition relationships, criminals and terrorists assume complementary but separate roles. 
section_title: Organizational Evolution and Variation
paragraphs: Typically, criminal groups are primarily driven by profit motives, whereas terrorist groups are ideologically driven. The motivations that drive terrorist and criminal groups, however, can evolve with time. A purely criminal group may transform to adopt political goals and ideological motivations. Terrorist groups, on the other hand, may shift toward criminality. For some terrorist groups, criminal activity remains secondary to ideological ambitions. For others, profit-making may surpass political aspirations as the dominant operating rationale. The level of involvement and expertise in terrorist or criminal activities may vary, depending on the organization's current leadership, membership composition, geographic distribution of sympathizers and diaspora networks, dependence on state sponsorship, and physical proximity or access to illicit resources. Frequently cited terrorist organizations involved in criminal activity include, among others, ASG, Al Qaeda's affiliates, D-Company, PKK, FARC, Haqqani Network, and Hezbollah. Brief descriptions of these groups' criminal activities are described below. 
subsections: section_title: Abu Sayyaf Group (ASG)
paragraphs: A Philippines-based terrorist group, ASG appears to have at times prioritized criminal activities over ideological operations. Major shifts toward crime occurred in conjunction with leadership and membership composition changes, which altered the relative importance of ideological zeal and criminal tendencies. During its periods of high criminality, ASG became well known for its success in kidnappings for ransom, maritime piracy, and arms trafficking. Observers suggest that the group's overall drive toward criminal activity has been perpetuated by the group's ability to generate illicit profits, with new recruits tending to be more motivated by ASG's promise of financial wealth rather than ideological convictions. The State Department has listed ASG as an FTO since 1997, and President George W. Bush designated ASG a specially designated global terrorist (SDGT) pursuant to EO 13224 in 2001.
section_title: Al Qaeda's Affiliates
paragraphs: There is no conclusive evidence of senior-level Al Qaeda members directly involved with or motivated by organized crime. Many speculate that this is because of the group's strict ideological beliefs and fear of a loss of credibility if senior leaders were found to be directly involved in such activities. Connections to organized crime activity, however, can be drawn among mid-level and low-level Al Qaeda members and supporters. Moreover, it appears that Al Qaeda's affiliates and franchises do not necessarily share the same aversion to criminal activity. Notable crime-funded Al Qaeda affiliates include AQIM and AQI. Additionally, Al Qaeda's disinclination toward direct involvement in organized crime has not prevented it from cooperating, supporting, and jointly training with other insurgent groups that are more entrenched in trafficking and smuggling activities, including the Haqqani Network and the Taliban. The State Department designated Al Qaeda as an FTO in October 1999, and President George W. Bush designated it as an SDGT pursuant to EO 13224 in 2001. Several of its affiliates have also been designated separately as FTOs, including AQI in December 2004, AQIM in February 2008 (AQIM was also previously designated in March 2002 when it was called the Salafist Group for Call and Combat, GSPC), and AQAP in January 2010.
section_title: D-Company
paragraphs: Dawood Ibrahim, the alleged leader of D-Company, is an INTERPOL fugitive and wanted in connection with the 1993 Mumbai bombing and sanctioned under U.N. Security Council Resolution 1267. Ibrahim was listed in October 2003 by the Treasury Department as a specially designated global terrorist (SDGT), and both Ibrahim and his organization were listed as significant foreign narcotics traffickers (SDNTKs) in May 2008, pursuant to the Foreign Narcotics Kingpin Designation Act. His organization, D-Company, can be characterized as both a transnational criminal syndicate as well as ideologically aligned with terrorist groups operating in South Asia, including Lashkar-e-Taiba (LeT). According to reports, D-Company originated as a smuggling operation in the 1970s. It evolved in the 1990s into an organized crime group not only motivated by profit but also one that engaged in insurgent activity, eventually supporting efforts to smuggle weapons to militant and terrorist groups in the region. By the 1990s, it began to conduct and participate in terrorist attacks, including the March 12, 1993, Bombay bombing. D-Company's criminal activities reportedly span extortion, smuggling, narcotics trafficking, and contract killings. Its apparent willingness to work with and provide logistical, financial, and material support to ideologically motivated violent groups exemplifies the risks associated with converged criminal and terrorists threats.
section_title: Kurdistan Worker's Party (PKK)
paragraphs: Formed in the 1970s and operational since the early 1980s as a Kurdish nationalist group with Marxist-Leninist leanings, the PKK increasingly turned to crime after it lost its state sponsors. By the late 1990s, and particularly after its leader Abdullah Ocalan was captured in 1999, the PKK invested heavily in transnational organized crime activities, such as drug trafficking, arms smuggling, human smuggling, extortion, money laundering, counterfeiting, and illegal cigarettes. By the 1990s, the PKK had formed specialized units to variously carry out militant operations, contraband trafficking, political activities, and information campaigns. As a result, some parts of the PKK appear to behave more like a criminal organization rather than a terrorist or guerrilla organization. According to the U.S. government, many of these criminal activities are centered in Europe, where there is a significant Kurdish diaspora population. The State Department designated the PKK as an FTO in October 1997. The PKK was also designated as an SDGT in 2001. For its alleged involvement in drug trafficking, the President designated the PKK as an SDNTK in May 2008, pursuant to the Foreign Narcotics Kingpin Designation Act.
section_title: Revolutionary Armed Forces of Colombia (FARC)
paragraphs: Operational since the 1960s, the FARC has been described as one of the largest, oldest, most violent, and best-equipped terrorist organization in Latin America. Its longevity is due in part to its involvement in the drug trade. The enormous profit opportunity that drug trafficking has provided to the FARC is widely viewed as the driving factor for its involvement in such criminal activity. According to reports, the FARC first became involved in the drug trade in the 1980s by levying protection fees on coca bush harvesters, buyers of coca paste and cocaine base, and cocaine processing laboratory operators in territory under FARC control. Over time, the FARC took a more direct role in drug production and distribution. By the 2000s, the FARC had reportedly become the world's largest supplier of cocaine. The FARC also reportedly generates revenue from extortion rackets, kidnapping ransoms, and illegal mining. Exploratory peace talks between the Colombian government and the FARC began in August 2012, the outcome of which may have implications for the FARC's future involvement in illicit criminal activities. The State Department designated the FARC as an FTO in October 1997.
section_title: Haqqani Network
paragraphs: The family-run Haqqani Network is commonly described as an insurgent group, in equal measures one of the Taliban's most capable militant factions as well as an enterprising transnational criminal organization. Headquartered in North Waziristan, Pakistan, this insurgent group is suspected of conducting major attacks against allied coalition members of the North Atlantic Treaty Organization (NATO) and U.S. forces in Afghanistan as well as active involvement in a wide range of highly profitable licit and illicit activity. In the 1980s, Jalaluddin Haqqani first gained a reputation as an effective mujahedin commander and U.S. ally against the Soviet Union. He later joined the Taliban regime in the 1990s when in power in Afghanistan. The group continues to maintain relationships not only with Al Qaeda and other militant groups in the region, but also purportedly benefits from a relationship with Pakistan's Inter-Services Intelligence Directorate (ISI)—a relationship strongly decried by America's top ranking military officer in September 2011. As part of a strategy of financial diversification to ensure the organization's resiliency against external pressures, the group also benefits financially from extortion and protection rackets, robbery schemes, kidnapping for ransom, and contraband smuggling (e.g., drugs, precursor chemicals, timber, and chromite). The Haqqanis also reportedly control licit import-export, transportation, real estate, and construction firms through which illicit proceeds can be laundered. Pursuant to the Haqqani Network Terrorist Designation Act of 2012 ( P.L. 112-168 ), the State Department designated the group as an FTO in September 2012.
section_title: Hezbollah
paragraphs: Based in Lebanon, with established cells in Africa, North and South America, Asia, and Europe, Hezbollah is known to have or suspected of having been involved in terrorist attacks against U.S. interests worldwide. Although primarily funded and trained with support from state sponsors, chiefly Iran, Hezbollah also reportedly benefits from a sprawling global commercial network of licit and illicit businesses, largely connected to expatriate Lebanese communities worldwide. Sources of funds include private donors and large-scale investments in legitimate businesses. Criminal indictments and statements by U.S. officials and other experts suggest that Hezbollah has also become well-integrated in the domain of transnational organized crime, deriving profits from a wide range of illicit enterprises, such as drug trafficking, precursor chemical trafficking, counterfeit pharmaceutical trafficking, sales of counterfeit commercial goods and electronics, auto theft and fraudulent re-sale, diamond smuggling, cigarette and baby formula smuggling, credit card fraud, and insurance scams, among potentially many others. Pursuant to EO 12947, Hezbollah was designated in January 1995 as a specially designated terrorist (SDT). The State Department designated Hezbollah as an FTO in 1997. In October 2001, Hezbollah was also designated as an SDGT pursuant to EO 13224.
section_title: Foreign Policy Responses
paragraphs: With recognition that every crime-terrorism partnering circumstance will be different and the tools to identify and address such concerns may change, a wide range of anti-crime and counterterrorism policy options can be considered. The variety of options available, however, also challenges policymakers to consider several key questions in formulating responses. Should a specific agency or an interagency coordinating body be designated as leading U.S. government responses to crime-terrorism threats? Under what circumstances would U.S. responses to crime-terrorism threats be most appropriately led by the intelligence community, military, diplomatic corps, or law enforcement agencies? How can resources and authorities be allocated and managed to avoid excessive duplication while also ensuring effective policy response coverage? 
The following sections describe selected key foreign policy responses to crime-terrorism nexus threats and related policy considerations for Congress for each response. These may be applied in various combinations or sequences, depending on the specific circumstances.
subsections: section_title: Diplomacy
paragraphs: U.S. diplomatic efforts to promote anti-crime and counterterrorism goals occur through bilateral, regional, and multilateral mechanisms. Such efforts are often led by the U.S. Department of State and include initiatives developed by its regional bureaus, the Bureau for International Narcotics and Law Enforcement Affairs (INL), and the Bureau of Counterterrorism (CT). Relevant U.N. treaties to which the United States is party to include the International Convention Against the Taking of Hostages, International Convention for the Suppression of Terrorist Bombings, International Convention for the Suppression of the Financing of Terrorism, U.N. Convention against Transnational Organized Crime, and International Convention for the Suppression of Acts of Nuclear Terrorism. Through the U.N. Security Council, the United States also participates in the Security Council Sanctions Committee. The Sanctions Committee administers and enforces a range of sanctions and targeted measures against Al Qaeda and the Taliban, among others, which include arms embargoes, travel bans, asset freezes, and diplomatic restrictions. 
Bilaterally, the U.S. government maintains mutual legal assistance treaties (MLATs) and extradition agreements with foreign countries to facilitate transnational investigations and information sharing. Other options available to the State Department include designating entities as FTOs, pursuant to the Immigration and Nationality Act (INA), as amended, and barring known foreign terrorists and transnational organized criminals from entry into the United States and providing grounds to remove and deport such individuals if in the United States, pursuant to several visa ineligibility conditions. (See text box below for more on a recent FTO designation, the Haqqani Network.) Additionally, the U.S. Department of the Treasury's Office of Terrorist Financing and Financial Crimes (TFFC) leads the U.S. delegation in meetings of the Financial Action Task Force (FATF), an international body that develops global regulatory standards for combating money laundering and terrorist financing. 
Congress has provided direction to relevant federal departments to conduct diplomatic activities to address crime-terrorism issues by enacting legislation that authorizes and appropriates funds to relevant agencies to perform such tasks, as well as by conducting program oversight through hearings and reporting requirements. Given the inherently transnational nature of many current crime-terrorism challenges, diplomacy often plays a central role in responses. The extent to which diplomacy can be effective in combating crime-terrorism threats, however, is limited by delays associated with achieving consensus agreements and potentially long-lasting gaps in foreign political will and capacity.
section_title: Foreign Assistance
paragraphs: Several U.S. departments and agencies administer programs to train foreign law enforcement officials and other security forces; develop legal frameworks in partner nations to criminalize and combat various crime-, drug-, and terrorism-related activities; and support institutional capacity building for foreign internal security and border enforcement entities. U.S. foreign assistance efforts to combat international terrorism or transnational crime can have mutually beneficial implications. In cases of crime-terrorism confluence, some have cautioned that an increasingly blurred line between counterterrorism and anti-crime assistance could reduce foreign aid transparency and raise additional challenges in planning and coordinating projects to avoid redundancy. In some cases, foreign development aid may also risk unintentionally providing illicit groups with an additional source of funding. In regions where known crime-terrorist groups are known to operate, such as Afghanistan, funds intended for development projects have at times benefited illicit groups, who offer development contractors with security and protection services.
Most U.S. foreign police assistance is administered through the U.S. Departments of State and Defense, and programs are variously implemented by other U.S. agencies and federal contractors in host nations. In some situations, the U.S. government may be requested to support foreign militaries in their efforts to combat crime-terrorism threats, such as the FARC in Colombia or the Taliban in Afghanistan. In addition to U.S.-funded foreign security forces support efforts, the U.S. Agency for International Development (USAID) is often involved in developing related justice sector and rule of law assistance programs. DOJ maintains in-house expertise through its Office of Overseas Prosecutorial Development Assistance and Training (OPDAT) and International Criminal Investigative Training Assistance Program (ICITAP) to implement capacity building projects that support foreign countries investigate and prosecute cases involving transnational crime and international terrorism. U.S. federal prosecutors may serve as Resident Legal Advisors (RLAs) overseas to support related justice sector training, institution building, and legislative drafting. 
Congress has played an active role in establishing the scope and amount of U.S. assistance that can be provided for the purposes of counterterrorism and anti-crime. Specific authorities are outlined in the Foreign Assistance Act of 1961, as amended, Title 10 of the U.S. Code, and periodic National Defense Authorization Acts. Additional conditions may also be included in appropriations acts for the various agencies involved in administering foreign assistance for counterterrorism and anti-crime. 
section_title: Financial Actions
paragraphs: Several unilateral and multilateral policy mechanisms are available to block transactions and freeze assets of specified terrorist or criminal entities, as well as to strengthen international financial systems through enhanced regulatory requirements. Unilaterally, the Treasury Department's Office of Foreign Assets Control (OFAC) administers and enforces unilateral targeted financial sanctions against a list of foreign entities and individuals (specially designated nationals, or SDNs) that include SDGTs, FTOs, Middle Eastern terrorist organizations found to undermine and threaten Middle East peace process efforts (specially designated terrorists, or SDTs), transnational criminal organizations (TCOs), and specially designated narcotics traffickers and trafficking kingpins (SDNTs and SDNTKs). Authorities for OFAC to designate such entities are derived from executive order and legislative statutes, which include the International Emergency Economic Powers Act (EEPA), the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), and the Foreign Narcotics Kingpin Designation Act. 
Additionally, Title II of the USA PATRIOT ACT of 2001 ( P.L. 108-56 , as amended) introduced several policy tools that strengthened the existing U.S. framework to combat illicit finance. Among other provisions, this act developed a procedure, popularly known as Section 311, to apply enhanced regulatory requirements, called "special measures," against designated jurisdictions, financial institutions, and international transactions that are found to be involved in criminal or terrorist financing activities. At the multilateral level, the United Nations administers several sanctions programs to freeze funds related to persons involved in acts of terrorism, including individuals and entities associated with Al Qaeda and the Taliban, pursuant to U.N. Security Council Resolution 1373 (2001), U.N. Security Council Resolution 1267 (1999), and U.N. Security Council Resolution 1988 (2011). 
Many observers have argued that a key tool to combat the confluence of crime and terrorism is to follow their overlapping money trails and apply financial sanctions and heightened regulatory conditions to vulnerable financial sectors. Both types of groups require funds to sustain operations, and such funds often intersect with the formal international banking system. Critics of such tools to counter illicit financial transaction suggest that they are often laborious and time-intensive to implement, and not necessarily effective in dismantling crime or terrorism networks. Policymakers have acknowledged that criminals and terrorists continue to exploit opportunities to move funds and hide their financial tracks in multiple ways: in the formal financial system; through centuries-old techniques such as bulk cash smuggling, trade-based money laundering, and hawala-type informal value transfer systems; and through modern technologies such as pre-paid cards, mobile banking systems, and the Internet. 
section_title: Intelligence
paragraphs: Although few details are publicly available about the intelligence community's role in combating crime-terrorism threats, intelligence can play a significant role in developing strategic analyses that prioritize crime-terrorism trends of national security significance, as well as in developing operational and tactical responses to detect, influence, and target specific crime-terrorism networks, nodes, plans, and actors. The 2009 National Intelligence Strategy described the nexus between terrorism and criminal activities as among the intelligence community's priorities. 
In the past, some have suggested that there appeared to be limited, if any, systematic gathering of intelligence related to the nexus between crime and terrorism and, as a result, an incomplete understanding of the scope and nature of relationships between and convergence among terrorists and criminal actors. The Obama Administration's 2011 Strategy to Combat Transnational Organized Crime acknowledged that "a shift in U.S. intelligence collection priorities" since 9/11 resulted in "significant gaps" related to transnational organized crime. The 2011 Strategy also identified the enhancement of "U.S. intelligence collection, analysis, and counterintelligence" on transnational organized crime as "a necessary first step." Since 9/11, numerous bills have addressed terrorism as well a transnational crime-related issues. Similarly, a number of congressional hearings have focused on issues relating to international terrorism and transnational crime. Some observers suggest that heightened congressional focus on the confluence of crime and terrorism may have an impact on the executive branch's approach to the issue and appreciation for the risks and vulnerabilities associated with crime-terrorism partnering arrangements. 
section_title: Military Actions
paragraphs: In some cases, particularly in non-permissive security environments in which traditional law enforcement units may have difficulty operating, the U.S. military has been called upon to contribute to certain joint counternarcotics and counterterrorism or counterinsurgency activities. In 2002, for example, Congress first authorized DOD to support a "unified campaign against narcotics trafficking ... [and] activities by organizations designated as terrorist organizations such as the Revolutionary Armed Forces of Colombia (FARC), the National Liberation Army (ELN), and the United Self-Defense Forces of Colombia (AUC)." Although Congress renewed this authority through FY2012 in the National Defense Authorization Act for Fiscal Year 2012 ( P.L. 112-81 ), it has not been codified and is limited only to activities in Colombia. Military operations in Afghanistan provide another example in which DOD has taken an expanded approach to crime-terrorism nexus issues. In late 2008, DOD amended its rules of engagement in Afghanistan to allow U.S. military commanders to target drug traffickers and others who provide material support to insurgent or terrorist groups such as the Taliban and members of hybrid crime-terrorism groups such as the Haqqani Network. DOD further clarified that the U.S. military may accompany and provide force protection in counternarcotics field operations. In some cases, the U.S. military has chosen to take lethal action to rescue or attempt to rescue hostages in kidnapping for ransom situations.
U.S. military involvement in situations where there are overlaps between anti-crime and counterterrorism goals is not necessarily warranted or desired. In some situations, political sensitivities and rules of engagement may prevent or prohibit the U.S. Armed Forces from direct involvement. Some observers caution that militarized counternarcotics or anti-crime policies may risk escalating suppression tactics and contribute to violations of human rights. 
section_title: Investigations
paragraphs: Various elements of the U.S. Departments of Justice (DOJ) and the Department of Homeland Security (DHS) are tasked with investigating cases that involve alleged prohibited acts related to international terrorism and transnational crime. These include the U.S. Federal Bureau of Investigation (FBI), the U.S. Drug Enforcement Administration (DEA), the International Organized Crime Intelligence and Operations Center (IOC-2), and Immigration and Customs Enforcement (ICE). The State Department, DOD, and FBI also publicize rewards programs for citizen tips that lead to the apprehension of selected high-profile perpetrators of transnational organized crime, including money launderers, human traffickers, and drug traffickers, as well as terrorists.
Some observers see the nexus between crime and terrorism as a potential benefit for detection and law enforcement prosecution that could be further exploited. Even if prosecutors do not have sufficient evidence to convict a suspected terrorist of terrorism-related charges, other criminal charges may be effectively used. Furthermore, some criminal charges, such as violations related to drug trafficking, can lead to jail sentences and penalties similar in magnitude to terrorism ones. It remains unclear, however, how effective such law enforcement and prosecution approaches have been to combat terrorism or how frequently such strategies have been implemented in practice, both in the United States and among partner nations, due to the lack of consistency in tracking cases with crime-terrorism nexus connections. Congress may have an interest in assessing how existing statutes have been used to support investigative and prosecution-related activities in response to entities suspected of engaging in terrorism-crime partnering activities. Assessing investigative, prosecution, and sentencing data collected in the 11 years since the attacks of 9/11 may provide Congress with information regarding statutes that have been effectively used to address crime-terrorism partnering activities and areas where additional legislative assistance might be required. 
section_title: Looking Ahead: Implications for Congress
paragraphs: Policy issues related to the interaction of international crime and terrorism are inherently complex. While the U.S. government has maintained substantial long-standing efforts to combat terrorism and transnational crime separately, questions remain about how and whether issues related to the interaction of the two threats are handled most effectively across the multiple U.S. agencies involved. Efforts to combat transnational crime can result in positive and negative outcomes with counterterrorism policies, raising fundamental questions about how to prioritize combating crime or terrorism aspects of a case when both elements are present. Further, questions remain on how links between terrorist-criminal activity and potentially related U.S. polices—including but not limited to WMD proliferation, cyber security, post-conflict reconstruction efforts, and counterinsurgency—are integrated across agencies. 
Since the September 11 attacks, Congress has enacted several landmark bills that have given the U.S. government greater authority and additional tools to counter the convergence of organized crime and terrorism. Less than six weeks after the attack, Congress enacted the USA PATRIOT Act ( P.L. 107-56 ) to strengthen the U.S. government's ability to detect, report, and prevent terrorist activities, including potential connections between organized crime and terrorism. Additionally, Congress enacted the Intelligence Reform and Terrorism Prevention Act of 2004 ( P.L. 108-458 ) and the USA PATRIOT Improvement and Reauthorization Act of 2005 ( P.L. 109-177 ), which further enhanced U.S. government efforts to crack down on terrorist financing and money laundering. 
Based on recent U.S. assessments, transnational crime and international terrorism appear to intersect and overlap in ways that will, at times, affect U.S. national interests. To this end, Congress may choose to continue to evaluate existing approaches and programs to combat the confluence of crime and terrorism through hearings and requesting or legislating reports to be issued by relevant executive branch agencies and inspector general offices. Congress may also choose to modify, adapt, or enhance existing legislative authorities and mandates to target various dimensions of the problem. Such approaches may be region- or group-specific, or global in scope. 
More broadly, as policymakers consider the crime-terrorism nexus issue and relevant policy responses, key questions for Congress may include the following: 
What is the scope of the crime-terrorism issue? What types of crimes are involved? Which groups and actors of both kinds pose the greatest threat to U.S. national security? What political, social, economic, geographic, and demographic circumstances facilitate the interaction between transnational crime and international terrorism? Has the United States successfully exploited the partnering arrangements and differences in motivations and capabilities of terrorist groups and criminal organizations? If so, what lessons learned could apply to current and future activities by such actors? What prevents the U.S. government and international community from disrupting and dismantling current crime-terrorism threats? Which federal government entities have the lead roles for addressing various aspects of the crime-terrorism phenomenon? How are government funds being spent to address concerns about crime-terrorism links? Is there a need to expand or adjust existing congressional authorities to combat the combined crime-terrorism threat? Are the available U.S. foreign policy tools sufficient to meet today's crime-terrorism concerns—and are such tools effectively implemented? If not, what can be improved?
subsections: section_title: Appendix. Terrorist Links to Criminal Financing
paragraphs: The following table summarizes the State Department's descriptions of how current foreign terrorist organizations (FTOs) raise funds and whether, if at all, an FTO is involved in criminal activities as a source of revenue. Among the 51 FTOs described in the State Department's most recent Country Reports on Terrorism (from May 2013), sources of funding vary. Common sources of funding include, in various combination, state sponsors, private donors, other terrorist groups, legitimate business activity, proceeds of crime. Popular forms criminal financing include extortion, kidnapping for ransom, drug trafficking, robbery, human smuggling, weapons smuggling, other contraband smuggling, money laundering, bank fraud, credit card fraud, cybercrime, immigration fraud, passport falsification, and illegal charcoal production. For 9 of the 51 FTOs, the State Department reports that funding sources and mechanisms are "unknown."