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Severing the Web of Terrorist Financing

Al Qaeda will present a lethal threat to the United States so long as it maintains a lucrative financial network, and at this moment it unquestionably has one.

This network is exceedingly difficult to disrupt. It is diverse, protean, and exploits every opportunity to raise, hold, and move funds. Nonetheless, we have in recent years developed a more sophisticated understanding of how the al Qaeda financial network operates, and using this "theory of the case" have begun to craft more effective policies to disrupt the network and track it back to specific terrorist cells and leaders. That said, much, much more work remains to be done.

The Theory of the Case

The 9/11 Commission concluded that al Qaeda received about $30 million per year in funding before the 2001 attacks. This sizable sum did not come from the wallet of Usama Bin Ladin alone, no matter how rich he once was. If that were so, it would be a much easier problem to address.

Rather, al Qaeda continuously obtained money from a variety of sources. This money was – and is – raised through Islamic charities and notable financial facilitators, as well as through legitimate businesses and criminal enterprises. Money is moved through formal banking channels, less formal alternative remittance systems (such as the centuries-old hawala network), and the very oldest method, bulk cash couriers and other smugglers. Funding for the cell responsible for the Madrid bombings earlier this year, for example, appears to have depended on common criminal activity and drug trafficking.

The best publicly available descriptions of the al Qaeda financial network can be found in two publications of the 9/11 Commission: its report and its subsequent "Monograph on Terrorist Financing." The 2002 and 2004 reports of the Council on Foreign Relations Independent Task Force on Terrorist Financing, of which I have served as co-director, anticipated many of the findings and recommendations of the 9/11 Commission.

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