Securitizing Money to Counter Terrorist Finance: Some Unintended Consequences for Developing Economies

Abstract

With its roots in the 'war on drugs' and the criminalisation of money laundering, the global initiative to combat the financing of terrorism (CFT) provides one strategy for preventing and pre-empting terrorist attacks. In public pronouncements terrorist finance was named the 'lifeblood' and 'oxygen' for terrorism itself, thus displaying an analogy suggesting that its mere removal could bring an end to terrorism. Following the theoretical perspective of the Copenhagen School of security studies this paper argues that national and international measures against terrorist finance constitutes the 'securitisation' of money. By situating money as the essential component to an existential threat it was possible to justify extraordinary measures to monitor financial transactions. These measures produced unintended consequences prompting resistance and an evolution of procedures to reduce those consequences. This paper considers two affected areas (migrant remittances and financial inclusion) and points to the potential use of financial surveillance against grand corruption.

Avocat, rechtsanwalt or agent of the state?

“…There may be several motivations for this, such as reducing enforcement costs, compliance benefits, maintaining the profession’s independence and intelligence benefits (Parker and Taylor, 2010). On the contrary, however, this “responsibilisation” of the legal profession, also set in motion a process of securitisation of the non-financial sector by making it a key instrument in solving the problem that terrorism and organised crime constitutes for the European community (Helgesson and Mörth, 2012; Vlcek, 2015). The non-financial sector becomes not only an instrument of the state as it generates intelligence by passively collecting information that could be of value for intelligence agencies but also actively takes a role of agents of the state as it monitors and reports on suspicious behaviour (Amicelle, 2011; He, 2006; Pütter, 2003)[4].…”

“…However, the normative question of rendering third-stage actors, with very little reporting output as compared to, e.g. banks, is worth the risk of individual lawyers risk of being used by criminals (Bures, 2015; Parker and Taylor, 2010; Vlcek, 2015)? As we show below, this vulnerability is something that lawyers are well served to manage on their own and therefore the political obligations are seen as more of a nuisance.…”

Implementation and Compliance of the International Ship and Port Facility Security Code in Mexico: A literature Review and Selected Issues

“…19 Safety and security in several disciplines 20 Organized Crime. 9 (Brown, Coté, Lynn-Jones, & Miller, 2010) Book Book x x x 9 (Vlcek, 2013) Article Procedure Analysis x x 9 (Crenshaw, 2010) Book Book x x 9 (Zabyelina, 2013) Article Book x 9 (Stoney & Scanlon, 2014) Article Reflective / exploratory analysis x x 9 (Weinberg, 2008) Book Book x x x 9 (Burgherr & Hirschberg, 2009) Book Book.…”

Global financial governance and the informal: limits to the regulation of money

“…The second factor identified by the authors has a clear connection to the first, which is the small number of people with formal financial sector accounts in these states. Financial exclusion has been identified elsewhere as an unintended consequence of the antimoney laundering surveillance regime, specifically the formal identification requirements necessary to comply with the 'know your customer' obligation imposed on financial institutions [56]. For these Andean states, however, the know your customer requirement is not so much the barrier as is the condition of low 'bancarization' that preceded even the introduction of anti-money laundering legislation and which reflects a number of other barriers to financial inclusion that are present in these societies ( [54], p. 442-444).…”