Please provide a summary of the major successes and failures (impact) of the UN Terrorist Financing Convention (i.e., the International Convention for the Suppression of the Financing of Terrorism established by the UN in 1999).
The International Convention for the Suppression of the Financing of Terrorism (ICSFT, sometimes referred to as the Terrorist Financing Convention) was not a unanimous decision by all Member States of the UN. Consequently, implementation and monitoring of the ICSFT has been inconsistent at best, even by countries who are strong advocates, such as Canada. Where the mandate has seen success, it has been at the micro level rather than more broadly. Below you will find a deep dive of our findings.
The International Convention for the Suppression of the Financing of Terrorism (ICSFT) originated in 1999 but was pushed through after the September 11, 2001 terrorist attack on the World Trade Center. The mandate took note of the links between terrorism and transnational organized crime, drug trade, and money laundering. The ICSFT, which came into force in April 2002, requires Member States of the convention "to take measures to protect their financial systems from being misused by persons planning or engaged in terrorist activities." The ICSFT became part of the UN's overarching Global Counter-Terrorism Strategy. The Financial Action Task Force on Money Laundering (FATF) has included in its 40 Recommendations (specifically, Recommendation 5) that each country should become a party to and implement the ICSFT.
The ICSFT's successes and failures cannot be gauged in a vacuum. To provide a full picture, we therefore researched the effects of the work of the FATF, which is the actual policy-making body "which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas." In addition, the ICSFT has resulted in "international standards and best practices" such as those of the International Monetary Fund's Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT). Our research therefore includes information about these efforts as well.
RESULTS OF THE ICSFT
Despite the creation of the ICSFT and other, similar resolutions, the FAFT's 2017 report admits that countering terrorist financing "continues to be a key issue for the integrity of the financial system and for international security" and that inter-agency information sharing took until 2017 to complete. Some individual Member States, like Canada, report moderate success in employing AML/CFT standards to identify and freeze terrorist funding activities, though even they admit that their implementation, while "generally good" has been "uneven." The ICSFT has also been used to seek relief from non-Islamic terrorism: In 2017 the Ukraine filed a complaint to the International Court of Justice under the ICSFT that states, "[The] Russian government has been interfering in its territory by instigating and sustaining an armed insurrection in eastern Ukraine" of pro-Russian separatists. This case is still pending.
Apart from these recent reports, we were unable to find any unqualified success stories of efforts under the ICSFT. This may be in large part because Member States have been slow to act in accordance with the ICSFT. For example, the European Parliament only passed new rules strengthening its efforts to prevent money laundering and terrorist financing in December 2017. In the words of Richard Barrett, former head of the UN's expert panel for monitoring the implementation of sanctions against Al Qaida and the Taliban, "The U.N. is too political, too uncoordinated, too focused on process rather than outcomes and follow-up, and too far removed from the people who actually deal with the problems of terrorism on the ground to make much of an impact, or even to appear relevant.” Other UN monitoring organizations, such as the United Nations Association of Australia, find this assessment to be too bleak, and argue that the UN has an important role to play in restraining terrorism.
In addition, state-sponsored terrorism, as well as that funded by wealthy individuals (e.g., Qatari national Abd al-Rahman bin Umaryr al-Nuaymi transferring $600,000 to al-Nusra) has not been affected by the ICSFT or other efforts aimed at money-laundering. Neither could ICSFT-mandated efforts prevent the financing of ISIL via oil smuggling (to the tune of $2 billion in 2015) or Al Qaida's $150 million in revenue from "a diversified portfolio of criminal business." The general failure of efforts to de-fund terrorist activity was acknowledged by a meeting of G20 finance ministers in Istanbul in February 2015, which stated that more could be done.
At the same time that the G20 members are discussing strengthening their response to the funding of terrorism, other organizations point out the unfortunate side-effect of the existing mandate rules, such as the AML/CFT. Perhaps the most damaging has been the disengagement by large international banks "from certain geographical regions or certain sectors because they consider the AML/CFT risks too great." This has particularly affected non-profit organizations (NPOs) due to the "mistaken and remarkably persistent idea that all NPOs pose a high AML/CFT risk." (Note that FATF does not claim that all NPOs are a risk, simply that terrorist organizations often use NPOs to move money.) A Duke International Human Rights Clinic study argues that women's rights groups, which "have little financial resilience," are particularly damaged as a result, with 90% reporting that counter-terrorism measures had had an adverse effect on them. "From applying this gender and human rights perspective, it is clear that women’s rights and their defenders across the globe are frequently squeezed between terrorism and violent extremism on the one hand, and counter-terrorism or preventing and countering violent extremism (P/CVE) on the other."
Relief organizations also argue that the very acts taken to attempt to de-fund terrorist groups may be helping them to sustain their popular support: "After all, it is precisely the peacebuilding and humanitarian work that NPOs do, that helps those harmed by terrorist groups and undermines the terrorist narrative. It would be a cruel irony if, in seeking to combat terrorist financing, financial institutions were simultaneously harming those best placed to address the root causes of terrorism."
The International Convention for the Suppression of the Financing of Terrorism (ICSFT) has not achieved its goal of de-funding terrorist organizations, and is particularly helpless to suppress state-supported groups. While many believe that the ICSFT Member States should strengthen their efforts, other organizations point out the unfortunate side effects to non-profit organizations attempting to bring relief to the most impoverished regions of the world and to victim groups, especially women.