The “New Economy of Terror:” The Financing of Islamist Terrorism

This paper exposes the “roadmap” of how modern Islamist terrorism is financed, through both legitimate and illegitimate means: the networks and linkages between financing obtained on the one hand through sympathetic Islamic governments, Islamic charities and banks, seemingly legitimate businesses operating as fronts, and on the other hand through criminal activities running the full gamut from money laundering, petty crime, organized crime, people smuggling, arms dealing and the narcotics trade. Of particular interest, the paper focuses on the way in which Islamic charities and Sharia compliant financing structures are used as a central mechanism to divert significant funds from Islamic charitable donations and financial activities directly to fund Islamic terrorism, often under the very noses of Western authorities, who fail to understand the what “Sharia compliant” really means in terms of its facilitation of Islamic terrorist financing, both within the West, as well as within the Islamic world. The paper concludes that there is an opportunity for “recalibration” of our existing approach to countering terrorist financing, by the development of a new integrated ‘uniform code’ to replace the existing, and often conflicting, series of ad hoc measures which have been developed on a piecemeal basis over time. And most importantly, the paper concludes that one of the central elements in this “recalibration” is the need to directly confront the seemingly harmless “Islamic aspects” of terrorist financing, in the form of Islamic Charities and Sharia compliant financing structures, so as to effectively shut down the terrorist paymasters.