UK (Parliament Politic Magazine) – Fraud has emerged as a prevalent method for financing terrorist activities, yet the connection between fraud and terrorism financing in the UK has been consistently overlooked by successive governments, despite acknowledging this link. Regrettably, the recent fraud and counter-terrorism strategies implemented by the UK government fail to address this pressing issue, lacking any policies aimed at tackling the problem.
Prior to the terrorist attacks in the United States in September 2001, the global community primarily directed its efforts towards combating money laundering as a form of financial crime. However, the tragic events of 9/11 prompted governments to initiate a comprehensive “financial war” against terrorism. It is effectively restricting the funding sources accessible to terrorist organizations.
Occurrence of Terrorists Attacks Through Fraudulent Means
My research centers on the extensive occurrence of terrorist attacks that have been funded through fraudulent means. Through this work, I have uncovered a comprehensive dossier on terrorism financing, encompassing various forms of fraud such as passport fraud, immigration fraud, identity theft, financial fraud, and tax fraud.
One of the most prevalent methods employed to finance terrorism in Europe, particularly in Belgium, Scandinavia, and the UK, is benefit fraud. In the US and the UK, credit card fraud, personal loan fraud, and bank fraud are commonly observed within terrorism networks. Additionally, not-for-profit organization fraud and tax fraud are prevalent in the US, UK, and Spain. Nevertheless, it is imperative that the UK extends the endeavors to address acts of terror that are financed through fraudulent means.
The UK government has implemented a range of measures aimed at addressing these pressing concerns. Notably, the Economic Crime (Transparency and Enforcement) Act 2022 and the economic crime and corporate transparency bill (2022) have been introduced, with the latter currently undergoing parliamentary proceedings.
These legislative initiatives are designed to support the UK’s sanctions regime and enhance the efficacy of unexplained wealth orders, which enable the seizure of assets without the need to establish criminal wrongdoing.
US Terror Attacks
In July 2005, a devastating terrorist attack unfolded in London, claiming the lives of 52 innocent individuals and leaving over 770 others injured. The attackers, utilizing four improvised explosive devices, unleashed chaos and destruction. However, the roots of this heinous act and its connection to fraudulent activities can be traced back to 1995.
During that time, Shehzad Tanweer, one of the terrorists involved, was suspected of engaging in fraudulent activities. Astonishingly, the HMRC (Her Majesty’s Revenue and Customs) had identified these suspicions, but failed to disclose this crucial information to either the UK’s Financial Intelligence Unit or the security and intelligence services.
In May 2017, Salman Abedi carried out a devastating act of terrorism by detonating an improvised explosive device within the confines of the Manchester Arena. This heinous act resulted in the tragic loss of 22 innocent lives and left over 800 individuals severely injured. Shockingly, Abedi had deceitfully exploited student loans and his maintenance grant to finance this abhorrent attack.
Abedi cunningly managed to obtain £7,000 from the Student Loans Company, having secured a place at a university in October 2015. Astonishingly, higher education institutions are not legally obligated to report any suspicions of fraud or the financing of terrorism to the National Crime Agency (NCA).
Act of Terror on London Bridge
In June 2017, Khuram, Rachid Redouane, and Youssef Zaghba orchestrated a heinous act of terror on London Bridge. They employed a van to ruthlessly mow down numerous innocent pedestrians before proceeding on foot to carry out their nefarious assault. Tragically, this despicable act claimed the lives of eight individuals and left 48 others gravely injured.
In October 2016, an individual was investigated and subsequently arrested by Scotland Yard on suspicion of falsely reporting fraudulent activity on three different bank accounts. Following the arrest, the individual was granted bail, and eventually, the fraud charges were dropped due to insufficient evidence. However, it is important to note that the banks were not legally obligated to submit a report to the National Crime Agency (NCA).
The aforementioned examples clearly illustrate the ineffectiveness of the existing reporting obligations in thwarting terrorism financing threats. Given these instances, it is imperative that organizations be mandated to report instances of fraud. This would ensure that fraud is accorded the same legal significance as money laundering, a recognized and significant source of terrorist financing.