University of Twente Student Theses


Developments in Terrorism Financing and Dutch Government Policy

Trouw, H.J. (2010) Developments in Terrorism Financing and Dutch Government Policy.

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Abstract:Terrorism is a special type of risk, both acting and not acting to prevent and combat terrorism can have far reaching consequences for freedom and democracy. One of the ways to combat terrorism is to combat the financing of terrorism. This thesis addresses the research question: What developments are there in the financing of terrorism and what are the consequences for the Dutch government policy? To be able to address the topic of terrorism financing it is necessary to define terrorism. There is no agreement on a common definition of terrorism and it is difficult to arrive at one. This difficulty is exacerbated by the political dimension of the discussion. Through study of the elements used in several of the more commonly used definitions it is possible to arrive at a definition. In this thesis this definition of terrorism is used: Terrorism is threatening with or perpetrating, acts of serious violence directed at people or acts aimed to cause socially disruptive property damage, by a non state actor, for the purpose of the generation of massive fear intended to coerce or to intimidate governments or societies. The Dutch government uses a wide array of policy and legal instruments to limit money laundering and terrorism financing. The policy is emergent, the result of the policy implementation of many actors combined with central direction. The Dutch policy can be evaluated by studying three questions. Is there government policy on all the sources, transfer methods and destinations of terrorist financing? Is this policy properly implemented in law? And is this policy effective? Recent activities of terrorists in the Netherlands consist of threats to security and other activities. Both types of activity are interesting for law enforcement due to their damage potential. The most likely threat is Islamic terrorism, but also right‐wing extremism and animal rights extremism could develop into a terrorist threat. Other groups are also active in the Netherlands for fundraising and other support activities. The organizational form of terrorism has an impact on the financial needs. Five organizational ideal types can be distinguished through differentiation in hierarchy and boundaries: lone wolf, ‘traditional’ organization, hybrid organization, franchise movement and the inter‐organizational network. The organizational form most commonly found in the Netherlands is the hybrid organization. These organizations are small, or the organization division in the Netherlands is small. Other organizational forms encountered are lone wolves and inter‐organizational cooperation. Therefore the need of funds is small and the collection of funds is small in scale. All terrorist organizations employ activities to finance themselves. The financing of terrorism can be described in several key topics: the sources, the transfer methods and the destinations of terrorist funds. Terrorist organizations differ greatly in their organization and their financial needs. The organizations deploy a wide range of activities for financing. These activities range from the use of state support to legal enterprise. To combat these activities the policy therefore has to be multi facetted. In the Netherlands, not all of the globally applied sources are used to collect the funds. Terrorist groups looking to perpetrate an attack in the Netherlands will most likely employ small scale legal and illegal activities to gather funds, for example labour or petty crime. The activities of this group are well covered by the policy. Terrorist groups operating in the Netherlands to support terrorism outside the region might use the same methods, but are also more likely to tap the migrant community and use bogus charities for their aim. This second set of activities is less well covered by the policy. 3 Studying the response of terrorist organizations to shifts in their resources and in response to counter‐terrorism can help in predicting future behaviour and threats. The current mix of resources can be used to predict the actions that will be taken to limit resource insecurity. Studying the internal dynamics of a terrorist organization can explain why effective counter‐terrorism policy can seem ineffective at first. Theories of organizational learning can add extra lines of approach to attack the financial structure of a terrorist organization. The population ecology theory provides us with the insight that new terrorist organizations are likely to target weaknesses in the financial system not exploited by the current generation of terrorist organizations. Counter‐terrorism should therefore not only concentrate its effort on weaknesses that are being exploited at present. It is likely that terrorist cells will further develop their resource gathering activities and therefore become less vulnerable to counter‐terrorism activity. This development might prove to be one of the principal developments in terrorist financing in this decade. Since the war on terrorism financing is mostly aimed at disabling the flow of larger amounts, a shift in focus might be necessary. In the Dutch case this does not pose a big threat since the policy is already aimed at small scale terrorism financing. In essence, the Dutch policy on terrorism financing is covering all its bases. However, there is room for improvement. The Dutch policy on terrorism financing can be improved through further monitoring and control of the outflow of money to terrorist supporters outside the EU. There are options, especially in the area of diaspora, sympathisers and charity contributions.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:88 social and public administration
Programme:Public Administration MSc (60020)
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