Sometimes, looking for the money trail is missing the point

In the middle of last week, the British media were full of reports of the 37-year-old British Muslim, Parviz Khan, who pleaded guilty in court to plotting to kidnap a British soldier and behead him in front of a video camera, a grisly reminded of the murders of Daniel Pearl and several other terrorism victims.

The plot, originally exposed a year ago by the British security service and police, was, according to the prosecutor, to kidnap a soldier out enjoying himself at night in Birmingham, bundle him into a waiting car, and then "he would be taken to a lockup garage and there he would be murdered by having his head cut off like a pig. This atrocity would be filmed” with the intention of spreading panic and fear in the British armed forces and the public.

If Khan’s plot, which according to the press reports was to be aided by another British Muslim and some local drug dealers, had been successful, it would almost certainly have proved the asymmetric nature of terrorism -- that a single killing carried out with very limited means can have a huge effect on public morale and probably also on the political decision-makers. But what also matters a great deal is that terrorist plots like this one are by their nature completely off the radar screen of counter-terrorism finance. In principle, Khan needed only four items to carry out his plans: a roll of masking tape to bind and gag his victim, a car or van to carry the victim off to the murder site (preferably with false number plates in order to avoid detection by the omnipresent CCTVs), a large kitchen knife to kill and decapitate the victim, and a video camera to capture the deed for later broadcast over the Internet. The masking tape and knife are cheap and easily bought at a corner shop for cash; the car can be stolen easily and then dumped afterwards; the video camera, too, is a commodity item that any one of the plotters could already have owned, or could buy for cash without attracting any attention. But not one of these essential items would have left a money trail, and even if the terrorists had been clumsy enough to buy the video camera by cheque or credit card, the purchase is so ordinary that it wouldn’t have attracted attention.

The point I want to make is an important one for those who make counter-terrorism financing policy and also for those who try to make and enforce CTF regulations. Even if you can force everyone to be identified positively at every point of contact with the financial system, and even if you can successfully monitor every banking or money transfer transaction in real time, something that is essentially impossible, the planning of urban terrorist outrages carried out on the terrorists’ home ground is more than likely to remain under the radar until it’s too late. Even by the standards of the 7/7 bombings in London, where the total cost of assembling the materials and carrying out the attack was less than $10,000, and the financial activities weren’t detected until it was too late, the sums involved in an beheading outrage of this kind are too small to be noticeable, and cash transactions are simply not going to get detected.

Where counter-terrorism financing does matter greatly is in detecting and interdicting the ideological infrastructure of home-grown terrorism, without which there would be few or no Parviz Khans. But whether in Britain, the USA, Italy or Australia, this is also going to mean making tough and unpleasant political decisions, because this level of CTF will require governments to force religious and communal organisations and charities (and not only Muslim ones: the Tamil Tigers are no less active or dangerous as terrorists than the global jihad) to open their books and fund-raising activities to scrutiny. More difficult yet, it will probably mean passing laws that ban certain types of religious propaganda, or propaganda masquerading as educational material, and retroactively punish anyone financing these materials. Done in isolation, these actions could result in unpleasant political consequences, because even innocent members of the communities involved will feel that they are being victimised, and instead of being dissuaded from supporting terrorism, the outcome will be the opposite. That is another reason why I believe, as I described in my last article here, that governments trying to develop rational and effective counter-terrorism policies for their own territory need to ensure that they create strong and credible relations with the communities from which these urban terrorists come.