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Cooperation and Contention: GCC Efforts to Counter the Financing of Terrorism

The financing of violent non-state groups is a contentious issue that has contributed to some of the current political fissures within the Gulf Cooperation Council (GCC) and has been used as a key strategy in the rivalries between states of the wider Gulf region. Despite these intra-regional tensions, the GCC states have engaged in significant cooperation to combat the financing of terrorism on the international stage. Saudi Arabia and Qatar are by far the two largest funders of the United Nations (UN) Trust Fund for Counter-Terrorism which supports the UN Office of Counter-Terrorism (UNOCT). A month before the Saudi-led coalition severed diplomatic ties with Qatar, the six GCC states created the Terrorist Financing Targeting Center (TFTC) jointly with the United States. The TFTC has continued to meet and issue joint terrorist designations despite the diplomatic rift. 

International efforts to disrupt the financing of terrorism have centered on creating domestic legal frameworks, capacity, and political will to track and disrupt suspicious financial transactions, shut down donation networks, halt the smuggling of goods, and enforce sanctions against known terrorists and their financers. These efforts have successfully disrupted massive fundraising cells and placed 90 entities and 261 individuals on the internationally-recognized UN Security Council ISIL (Da’esh) and Al-Qaida Sanctions list. Despite this progress, recent news reports on Russian financing of Taliban attacks, the designation of Iran’s Islamic Revolutionary Guard Corps as a terrorist group by the United States, and the proxy war in Yemen highlight the ongoing role of states in supporting violent non-state actors. While Iran has consistently been targeted with sanctions over its support for violent groups, the international community has largely focused on routing out financial transactions from non-state sources. As shown with the GCC states, some countries may be willing to turn a blind eye to support for some non-state groups or to human rights violations in the name of counterterrorism in order to garner support and compliance with international efforts to disrupt elicit funding networks.

Framework to Disrupt Networks of Financing Terrorism

The international framework for disrupting the raising, transferring, and spending of funds for terrorist purposes was built on existing strategies to counter money laundering and the illegal narcotics trade established in the late 1980s and 1990s. After the September 11, 2001 attacks on the World Trade Center, the United States Department of the Treasury-led a global effort to combat Al-Qa’ida’s financing and insulate the international financial system from being exploited for terrorism. The United States government recognized that cooperation with Saudi Arabia and other GCC members would be vital to the success of these efforts, in part due to donation networks and wealthy donors in Saudi Arabia, Kuwait, and Qatar that were linked to the financing of Al-Qa’ida. 

Some GCC states were initially cautious of the fervor and invasiveness of regulations that came with the United States’ War on Terror. Their reticence was unsurprising. First, most GCC states do not suffer from high levels of domestic terrorism. According to the Global Terrorism Database, there has never been a reported terrorist attack in Oman and from 1990-2010, Bahrain, Kuwait, Qatar, the UAE, and Saudi Arabia all experienced an average of five or fewer attacks a year, generally resulting in low casualties. Second, global efforts to combat terrorism in the wake of 9/11 were largely focused on disrupting terrorist attacks perpetrated by groups with fundamentalists Islamic ideologies. This conflation of terrorism broadly with Al-Qa’ida specifically resulted in some misconstruction of the Quran and discrimination and maltreatment of Muslims. The primary terrorism sanctions committee at the UN grew out of resolutions targeting the Taliban and Al-Qa’ida and is structured to include individuals associated with those groups, rather than a broad mandate covering other organizations known for committing terrorist attacks. When Kuwait accepted the UN International Convention for the Suppression of the Financing of Terrorism in 2013 they articulated their concerns with the definition of terrorism with their official reservation, “The commitment […] is without prejudice to its Arab and Islamic obligations in respect of the definition of terrorism and the distinction between terrorism and legitimate national struggle against occupation.” 

The UAE and Bahrain were early amongst GCC states to support international agreements to counter-terrorist financing. Bahrain ratified the UN Convention in 2004 and in 2007 their Financial Intelligence Unit (FIU) joined the Egmont group, an organization to promote sharing of financial intelligence and technical knowledge across FIUs. The UAE first created an FIU in 1999 (accepted into the Egmont group in 2002) and accepted the UN Treaty in 2005. The UAE was also one of the first states to bring informal value transfer systems, such as hawalas, into a regulatory framework. The GCC states are members of their regional Financial Action Task Force, MENATAFT, which sets recommendations and monitoring of domestic laws, capacity, and efforts to disrupt money laundering and terrorist financing. The cooperation and leadership of GCC states in dismantling donation networks and arresting financiers within their borders significantly crippled Al-Qa’ida’s financial reach and has been a key front in the efforts to disrupt the financing of terrorism.

The Future of Terrorist Financing

During the UNOCT Counter-Terrorism Week earlier this month, Under Secretary Vladimir Voronkov discussed the conflict between India and Pakistan over Kashmir and acknowledged that state sponsorship of terrorism could “undermine stability in many parts of the world,’’ but that UNOCT was built to focus on non-state support of terrorism. The work of the UNOCT and other multilateral efforts should be lauded for the depth of their collaboration, bringing together rival intelligence units, financial institutions, and most countries across the globe, and their successes in monitoring and disrupting international financial networks exploited by terrorist groups. Recently, these regulatory bodies have moved toward analyzing terrorist groups’ exploitation of sophisticated methods of online financings, such as mobilizing support through easy dissemination of propaganda and the use of cryptocurrencies. However, as ongoing crises in the Gulf demonstrate, state sponsorship of violent proxy groups is not a relic of the Cold War but remains a major driver of the ongoing regional instability. With deepened cooperation on countering the financing of terrorism, the GCC states will have to contend with their counterparts’ and their own governments’ records of supporting or financing the violence they seek to dispel. 

 

Corina Simonelli is a Ph.D. candidate in Political Science and Public Policy at the University of Michigan. She studies political violence with specific interests in third-party intervention, peacebuilding, civilian victimization, political communication, and the financing and counter-financing of violent non-state actors. Her research has been published in the Journal of Conflict Resolution. As a Gulf International Forum Visiting Student Research Fellow, Corina will be conducting research on the financing of violent non-state actors operating in Gulf countries and collecting data on the strategies these states employ to disrupt the financing and armament of violent actors.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.

Corina Simonelli is a PhD candidate in Political Science and Public Policy at the University of Michigan. She studies political violence with specific interests in third-party intervention, peacebuilding, civilian victimization, political communication, and the financing and counter-financing of violent non-state actors. Her research has been published in the Journal of Conflict Resolution. As a Gulf International Forum Visiting Student Research Fellow, Corina will be conducting research on the financing of violent non-state actors operating in Gulf countries and collecting data on the strategies these states employ to disrupt the financing and armament of violent actors.

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