1. Overseas Funds Transfers (1)
Overseas funds transfers – how they can be used to fund terrorism:
This example is based on what really happened with 9/11. Operatives use student visas or other official permissions to base themselves legitimately in the target country, where they open bank accounts.
Funds are received into these accounts via electronic transfers from various overseas third party accounts.
The operatives use ATM cards to make cash withdrawals….
… using the cash to fund their day-to-day living costs of food, rent, college fees, etc…
… and using it also to fund purchases and activities in preparation for terror attacks within the host country.
Copyright Lessons Learned Ltd 2016

2. Overseas Funds Transfers (2)
Key facts
Transaction records: ‘audit trail’ left by electronic transfers not advantageous to terrorists BUT…
Volume of electronic traffic: ease with which unremarkable transfers may slip through unnoticed
Third party originators: people with no association with terrorism and an apparent legitimate rationale for transfers
Terrorist financier’s perspective
Immediacy with which funds can be made available (action at short notice)
Legal method of moving money around (avoidance of risks associated with e.g., courier movements of money)
Key facts
With modern technology (and in particular since 9/11) it is a fairly universal requirement that careful records must be kept of the originator details for any electronic financial transactions. This is clearly a risk to terrorists as it increases the chances of detection.
However, the sheer volume of electronic transactions that are carried out globally each day acts in the terrorists’ favour and reduces the likelihood that their transactions will be detected. Transactions that are unremarkable in their features are unlikely to attract the attention of banking staff or even of a bank’s automated monitoring systems, and provided the terrorists keep their transactions within the bounds of what appears normal, there is a chance that they will pass unnoticed.
It is also known that the third party originators of these overseas transfers are usually unconnected with terrorism and so would not automatically arise suspicion when identified. The terrorist group provides the funds, but the people providing the account facilities and being named as the originators of the transfers are often family members or others who are able to provide a legitimate and plausible reason for their association with the operative to whom the funds are being sent.
Terrorist financier’s perspective
Given the heightened risk of detection, why would terrorists use electronic transfers? One reason is the speed and immediacy of the transaction; money can be relocated and then moved electronically again and again before the authorities have even begun to notice anything suspicious.
Another attraction from the terrorists’ point of view is the fact that electronic payment is a perfectly legal way of moving money around – unlike cash smuggling which is clearly illegal and a more risky way to go about it.
Copyright Lessons Learned Ltd 2016

3. Overseas Funds Transfers (3)
Possible ‘red flags’
Volumes of cash flowing in and out of account do not ~ match known business and resources of account holder
Unexplained large payments from overseas accounts where no apparent reason for such payments
Account holder’s transaction patterns and expenditure patterns do not match what would be expected
Transfers move to, from or through territories that are known to have a high risk of terrorist activity.
Transaction features and behaviours shown on this slide illustrate potential causes for suspicion regarding electronic transfers, particularly transfers from overseas. .
Copyright Lessons Learned Ltd 2016