Understanding the Financing of terrorism

By Rwanda Financial Intelligence Centre
On 22 February 2023 at 05:02

Terrorism financing occurs throughout the world and represents great threats to the world’s stability and security. Terrorists’ funds may originate from legitimate sources, or from criminal activities such as looting, extortion, robbery of economic assets and natural resources, exploiting non-profit organizations, kidnapping for ransom, cash smuggling among others.

The fight against terrorism financing is very crucial in the fight against terrorism; it leads to terrorists’ lack of funds, which limits their ability to prepare and carry out attacks. Terrorists or terrorist groups need fund for equipment, travel, accommodation and trainings to plan and execute their terrorist acts. Denying them access to fund limits their ability to carry their terrorist acts. Therefore, the successful fight against financing terrorism is one of the most effective ways to deter terrorism.

What is Financing of terrorism?

According to International Standards (Financial Action Task Force -FATF Recommendations, the interpretive notes and its Glossary), Financing of terrorism is an offense committed by any person who wilfully provides, collects funds or other assets by any means directly or indirectly, with the unlawfully intention that they should be used or in the knowledge that they are to be used, in full or in part, to carry out or attempt to carry out terrorist acts, by terrorist organisations or by individual terrorists.

The definition of terrorism financing under Rwandan Law is tailored to FATF definition.

In accordance with the Article 3 (3º) of Law Nº 75/2019 of 29/01/2020 on prevention and punishment of money laundering, financing of terrorism and financing of proliferation of weapons of mass destruction as amended to date, terrorism financing is:

 an act committed by a natural or legal person who by any means provides, collects or manages any property or funds whether from legitimate or illegitimate source, directly or indirectly, or attempts to do so, with the intention that they should be used or in the knowledge that they are to be used in whole or in part to carry out a terrorist act, or by a terrorist or by a terrorist organization;

 offering advice, financing of teaching or training in order to acquire skills and knowledge knowing that they may be used, or intended to be used for terrorism act and the financing of travelling of individuals who travel to States other than their States or their States of residence for the purpose of the perpetration, planning or preparation of, or participation in terrorist acts, or the providing or receiving of terrorist training.

From the definitions above the following should be noted:

 Financing of terrorism includes the financing of terrorist act, the financing of terrorists or the financing of terrorist organisations;

 It can be committed by an individual or a legal person;

 It extends to the provision or collection of fund or any other asset whether from legitimate or illegitimate source;

 Financing of terrorism is committed even if the fund or asset collected or provided is not linked to a specific terrorist act;

 Any support to a terrorist, knowing that he is a terrorist is a terrorism financing act;

 Any support for individual to travel for the purpose of preparation, planning or participation in terrorist acts is terrorism financing act;

 Terrorism financing extends also to the offering of advice or training to acquire the knowledge or skills that may be used or intended to be used for terrorism act.

Mechanisms to counter the financing of terrorism

Different approaches are used to tackle the financing of terrorism including legal, institutional and coordination frameworks. However, terrorists or terrorists’ organisations constantly adapt the ways of raising and moving fund to be able to used them without being caught. To effectively fight against terrorism financing, existing approaches should be kept updated.

The success of counter-financing terrorism requires an effective coordination framework, involvement of all key players from both public and private, public support in reporting any suspected terrorist or terrorist financing activity, enhanced inter-agency cooperation, strengthened international collaboration, control of movement of cash cross border or within the country, deterrent sanctions, strengthened relevant institutions as well as effective sharing of information to mention some.

The public, media and civil society are key actors by reporting suspected financing terrorism behaviour or activities. Hence, they are called upon to play their role and inform relevant authorities any suspicious related to financing terrorism without delay. Individuals are also advised to perform a due diligence before getting involved in any untrusted program or project.

Terrorism financing punishment in Rwanda

Article 30 of the Law Nº 75/2019 of 29/01/2020 on prevention and punishment of money laundering, financing of terrorism and financing of proliferation of weapons of mass destruction states that a person who carries out acts of terrorism financing or who is involved in an association aiming at committing one of the acts of financing terrorism commits an offence.

Upon conviction, he or she is liable to imprisonment for a term of not less than twenty (20) years but not more than twenty-five (25) years and a fine of Rwandan francs of three (3) to five (5) times the amount of money given; the same penalties apply to a person who knowingly makes an agreement or has interest in it in order to acquire funds or any other assets, or enables another person to acquire money or support, knowing or having reasonable grounds to believe that they can be used for terrorist purpose.

The Financing of terrorism is a felony offense and its punishment is made up of both imprisonment and fine.

Terrorism financing risks in Rwanda

The National Risk Assessment conducted in 2017/2018 revealed that Terrorism financing’s risk in Rwanda is Medium Low; according to Global Terrorism Index 2017, Rwanda was ranked 81th (from the countries with highest to lowest risk), 21st in Africa and lowest risk in EAC countries.

According to the aforementioned information, terrorism or terrorism financing acts are not alarming. However, Rwanda must always be vigilant because the country is not an island, it operates in international community where terrorism or terrorism financing risks exist.

What is required for an effective Counter-terrorism financing national program

The fight against terrorism financing requires a synergy between and among all stakeholders at international, regional and national level. An effective fight against terrorism relies on a comprehensive approach against terrorism financing which requires the use of the whole society approach where all key actors and the public work together to ensure that terrorists or terrorists groups find no means to operate their terrorism acts. An effective implementation of counter-financing of terrorism measures is key.

Moreover, the use of digital tools and systems should be promoted in order to track any fund raised in relation to terrorism financing and its movement.

Terrorists must be denied the opportunities of raising, storing, moving or using funds or any other assets.

“Without being financed, terrorism will end.”

The successful fight against financing terrorism is one of the most effective ways to deter terrorism.