The business of terror

How do we differentiate between terrorist and criminal activity? Convergence of crime and business Continuing business enterprises

How do we differentiate between terrorist and criminal activity?

Convergence of crime and business

Continuing business enterprises

Terrorism ,a sub-species of crime? Why do terrorists require money? Crime as a force in globalization Or Globalization as a force in crime

Why do terrorists require money?

Crime as a force in globalization

Or

Globalization as a force in crime

A working definition “ Terrorism is actual or threatened violence intended to indirectly coerce a primary target(typically a government or a people) to accept a demanded outcome through the fomenting of intense fear or anxiety”

“ Terrorism is actual or threatened violence intended to indirectly coerce a primary target(typically a government or a people) to accept a demanded outcome through the fomenting of intense fear or anxiety”

Features of a terror organization Pan- nation activity sphere Not receive or require nation sponsorship Self financed Highly goal oriented ,tech savvy Infiltration of banking channels No fastidiousness regd activity

Pan- nation activity sphere

Not receive or require nation sponsorship

Self financed

Highly goal oriented ,tech savvy

Infiltration of banking channels

No fastidiousness regd activity

How are terrorist organizations funded? State funding Business funding Banking channels Drug trade Arms trade Diamond trade Criminal activity –kidnapping,looting,protection money,smuggling

State funding

Business funding

Banking channels

Drug trade

Arms trade

Diamond trade

Criminal activity –kidnapping,looting,protection money,smuggling

Charity and donation

Charity and donation

Legitimate and illegitimate business

Legitimate and illegitimate business

Money laundering Need to change the form of money Need to conceal the origin and ownership of the money Need to control the money

Need to change the form of money

Need to conceal the origin and ownership of the money

Need to control the money

Stages of money laundering Placement Layering Integration

Placement

Layering

Integration

How is money laundered? Money transferred Shell corporation created Funds deposited in name of dummy corp. Money transferred to international clean bank Corp borrows money for use

Money transferred

Shell corporation created

Funds deposited in name of dummy corp.

Money transferred to international clean bank

Corp borrows money for use

46% of all money laundered in USA 18% -destination USA Daily $1000 bn exchanged in currency mkt of London

46% of all money laundered in USA

18% -destination USA

Daily $1000 bn exchanged in currency mkt of London

Shadow economy Germany-16.9% of GDP France-10.9% of GDP Italy-18.2% U.K.-10.6%

Germany-16.9% of GDP

France-10.9% of GDP

Italy-18.2%

U.K.-10.6%

USA worlds biggest market for drugs- $100 billion annually 80% of all the drugs are foreign in origin Thus $ 80 bn is sought to be laundered in USA annually

USA worlds biggest market for drugs- $100 billion annually

80% of all the drugs are foreign in origin

Thus $ 80 bn is sought to be laundered in USA annually

Methods Starburst Boomerang Shell companies Casinos Trade Charity money Internet

Starburst

Boomerang

Shell companies

Casinos

Trade

Charity money

Internet

Al Qaeda Wealth over $5 billion Annual budget between$20-50 million Origins of the money 1)drugs 30-35% 2)Donations20-30% 3)classic criminal activity-10-15% 4)unknown 30-35%

Wealth over $5 billion

Annual budget between$20-50 million

Origins of the money

1)drugs 30-35%

2)Donations20-30%

3)classic criminal activity-10-15%

4)unknown 30-35%

US dollars Narcotics as currency

US dollars

Narcotics as currency

OFCs Business discretion Weak money laundering laws Communications US dollar Independent Govt international banks have offices Businesses can be formed readily

Business discretion

Weak money laundering laws

Communications

US dollar

Independent Govt

international banks have offices

Businesses can be formed readily