Twenty-six nations wrapped up a meeting in Bali on countering terror financing Thursday by pledging to cooperate in strengthening intelligence efforts in cutting off funding sources even as terrorists change their methods of delivering cash.
In a joint statement co-hosts Indonesia and Australia, along with Malaysia, Thailand and other participants at the 2016 Counter-Terrorism Financing Summit committed to working together to reduce four major financing risks to the Southeast Asia and Australian region: self-funding from legitimate sources; at-risk non-profit organizations (NPO); fundraising through social media and crowd sourcing; and criminal activity.
“There needs to be a rule that charities are not misusing donations, including channeling funds for terrorism,” Muhammad Yusuf, chairman of Indonesian Financial Transaction Reports and Analysis Center (PPATK), told reporters at the end of the four-day meeting.
The four major risks to the region were assessed in a 48-page document published at the meeting, titled the Terrorism Financing Regional Risk Assessment 2016 report, and which was co-produced by Australia and Indonesia in conjunction with the other nations.
Among its findings, the report pointed to the likelihood that terrorists were adapting and changing their financing methods including through increasing the use of stored value cards similar to gift cards, because law enforcement had disrupted previous funding methods.
According to the report, foreign terrorist fighters have used stored value cards before and after departure to their destinations. The cards can be loaded with cash or through non-reportable electronic methods, easily carried to another country and are not subject to reporting requirements, the report said.
Funds can be redeemed through ATM withdrawals restricted only by limits on how much cash can be taken out. Cards can be reloaded remotely and anonymously by third parties, meaning that the face value of some cards can understate their value, the report stated.
The report included a chart that rated Indonesia as at high risk for each of the four sources, while Malaysia was rated at high risk for self-funding from legitimate sources and fund raising through social media. Thailand was at high risk for self-funding and at-risk through non-profit organizations.
Other key points highlighted in the report include that Indonesia faces a high threat of terrorism because about 258 Indonesians are involved in conflicts in Syria and Iraq conflict and 183 are believed to have returned home. The report has identified 11 active designated terrorist groups – and some of the most active are linked to the Islamic State (IS) and al-Qaeda.
Malaysia elevated the risk of terrorism and financing in 2014 because of threats posed by IS and foreign terrorists. The report estimates that 73 Malaysian nationals have joined or attempted to join extremist groups in Syria and Iraq, and at least 19 have been killed.
“Malaysia continues to be a transit country for recruits for terrorist groups active in other countries,” the report said.
Thailand, which claims no known foreign fighters, sees its national security influenced by the conflicts in the Deep South, the report stated.
“Thailand’s porous national borders increase its exposure to illegal movement of weapons, people, cash and goods of exchange,” the report states.
Self-funding – a high risk for all three Southeast Asian participants – is likely to “remain a key enduring risk across the region over the next three to five years,” the report went on to say.
It pointed out that in Malaysia, self-funding is used primarily for tactical, short-term purposes such as lone actor or small-scale attacks. In Indonesia, a terror group collected legitimately sourced funds that were then used to finance military training, the report said.
The level of misuse of non-profit organizations to fund terrorists is lower than expected across the region, the report stated. Still, some NPOs in Thailand have diverted money to fund propaganda to support separatist insurgents in the country’s Deep South.
The report suggested that financial investigative units (FIU) should collaborate more closely with relevant NPO supervisors or regulators to improve oversight; reporting institutions to ensure due diligence; and NPO leaders to build community trust.
It pointed to Malaysia’s positive efforts. “In contrast to many regional countries, Malaysia has conducted a comprehensive risk assessment of the sector and has adopted target approaches to risk mitigation.”
The report said online activity had been minimal and largely opportunistic.
Terrorists are more likely to use social media as a communication channel to solicit and broadcast calls for funding, and not actually collect funds, it said. These platforms can be used by FIUs to detect terrorist activities and suspicious activities.
Criminal activity remains a key source for funding terrorist organizations in the region, the report added.
Kidnapping for ransom remains a source of income for the Abu Sayyaf Group in the Philippines, while militants in Indonesia rely on violent robbery to raise funds, the report said. In Thailand, Deep South insurgents have stolen cars and smuggled oil, but rely mainly on extortion to raise funds.
While conference participants focused on Asia and Australia, Malaysia Home Ahmad Zahid Hamidi said his proposal for combating terrorists globally drew support from the other attendees, according to Malaysian state news agency Bernama.
Hamidi proposed the formation of a global secretariat to combat international terrorism.
“Interpol Executive Director Jürgen Stock met me personally and will take up the recommendation for its implementation and coordination by the United Nations,” he told Bernama.