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Pakistan Journal of Applied Social Sciences
Vol. 13(2), 2022, pp.89-106, ISSN: 2409-0077(Print), ISSN: 2663-8894(Online)
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Dynamics of Money Laundering and Terrorism: In
Immigrants’ Nexus Perspective
Dr. Tahseen Ahmed Shaikh
Advisor anti money laundering and terrorist financing risk
International commercial bank
Dr. Ammad Zafar
Assistant Professor
Department of Management Sciences
Usman Institute Technology University, Karachi, Pakistan
Abstract
This article throws light on the linkage between money laundering and terrorist
financing. These two serious organized crimes are dynamic and carry an inherent
risk of transnational threat. Despite counter-regime activism, their proliferation is
still aggravating the scenario. The central focus of the research is to review the
linkages of organized crime with immigration, particularly money laundering and
terrorist financing. By adopting qualitative and quantitative research approaches,
the researcher tried to examine anti-money laundering & related counterterrorism
policies, measures, and regulations that have immigrant’s nexus. It is a proven
fact; the porous borders of non-developed countries with internal fragile,
politically disturbed, terrorist-ridden, dwindling economies have been macro-
pushing factors to illegal immigrants. After 9/11, there have been frequent cases
of terrorist activities, which is not possible without the involvement of terrorist
financing. Thus, the researcher realized its gravity and opted for the research title
as a need of the hour. The various loopholes in countering money laundering and
terrorist financing regime were reviewed to reach out to the root causes and
existing weaknesses at the regime's end. The objective is to dissect the dynamics
of money laundering and terrorism in nexus with immigrants' perspectives. The
absences of laws and regulations or weak enforcement in the non-developing
countries testify to the seriousness shown by existing governments towards
curbing this menace. These conducive conditions substantiate criminal networks
to expand their muscles at the transnational level, particularly in developed
countries. As a way forward, the researcher believes the article will be a valuable
contributing factor in curbing immigrants' nexus in money laundering and
terrorism.
Keywords: Money laundering, Terrorism, Immigrants, Terrorist Financing
Introduction
Countries with strong counter-organized crime regimes face the
proliferation of financial crime and terrorism from other regions. This involves the
challenge of immigrants' inherent risk from those regions, which are vulnerable and
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Tahseen Ahmed Shaikh and Ammad Zafar
struggling against active criminal networks or non-state actors involved in
organized crime.
The research article provides an opportunity to discuss many manifestations
of money laundering and terrorism. Thus, the researcher believes that the proposed
research work would help to control immigrants' involvement in the commission of
laundering money and terrorism and an effective regime in dealing with these
specified organized crimes.
During the research, the qualitative and quantitative research approaches
are adopted. Using qualitative research techniques, the researcher has synthesized
and collated various materials in a new way and seeks to improve the risk
identification, assessment, and evaluation of counter financial crime and terrorism
regimes. Through the quantitative aspect, various challenges are assessed during
the implementation of different measures.
Thus, the primary approach is to analyze the comprehensiveness of the
current anti-money laundering and counterterrorism regimes program, particularly
to immigrants' nexus. It puts forward practical suggestions for future improvement
in practice. Considering the hybrid approach; existing data method, the document
and content analysis are adopted to assess existing anti-money laundering & related
counterterrorism policies, measures, and regulations having immigrants' nexus. The
researcher also examines secondary resources. The data analysis method opted for
understanding statistical information on the research article.
Scope of Research
This research involves national and transnational dynamics of financial
crime and terrorism. it will have its national and international implications upon the
existing regimes, legislative measures, and policies.
Rationale of Research
The nexus of immigration and crime is not new. It is a contentious issue for
more than 100 years (Simon, 1985). The researcher realizes the rising trend of
immigrants in developed countries. It is high time to initiate research on
immigrants' role in the laundering of money and terrorism in developed countries.
Since this crime has a tremendous risk of proliferation from non-developed
countries or regions where anti-money laundering and countering terrorism regimes
are not effective or prevalent laws are weak.
The researcher finds preceding studies performed minimal research related
to this nexus, and the scarcity of information motivates to dissect the nexus of
Dynamics of Money Laundering and Terrorism: In Immigrants’ Nexus Perspective
91
immigrants in financial crime and terrorism. Believing that every crime has its
retrospective causes and prospective consequences; thus, contemporary factors are
explored and analyzed.
Research Problem/Research Question
Q1. What are the causes of immigrants’ nexus of money laundering and terrorism?
Q2. How do immigrants’ nexus of money laundering and terrorism threaten the
counter-regime measures by the receiving country (ies)?
Q3. What are consequences of immigrants’ nexus in money laundering and
terrorism in the country(ies)?
Objectives of Research
The research study intends primarily to identify the causes of immigrants’
nexus in money laundering and terrorism in a recipient country. Secondarily it
attempts to develop an understanding of the effect of the nexus and its
consequences.
Theoretical Framework
The study is an effort to fill the gap and provide an opportunity to highlight
many new manifestations. It opens new vistas for the upcoming researchers and
national and international existing regimes to formulate legislative measures and
policies
Significance of Research
From available sources, the study has reviewed various current research
papers that are limited to reviewing laws and countermeasures against money
laundering and terrorism and various methodologies and techniques analyzed. It
also involves global and local measures against these organized crimes and put
forth recommendations before. Nevertheless, study finds the absence of factor
explored ever before for immigrants' nexus in money laundering and terrorism.
The research provides basis and direction to future work by identifying gaps
in knowledge, unresolved questions, and issues. The researcher acutely realizes that
it is high time to undoubtedly draw the attention of policymakers and think tanks
in fighting against this nexus to recipient country. This would also provide food for
thought to future researchers working on money laundering and terrorism from the
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Tahseen Ahmed Shaikh and Ammad Zafar
immigrants’ nexus perspective. Besides that, it would determine the best measures
and policies
Limitation of Research
After reviewing the existing literature, the researcher finds missing aspect
of immigrants’ nexus in commission and proliferation of laundering money and
terrorism in developed countries. It is necessary to know the causes and
involvement of this nexus and gauge how so far; it impacts from various
perspectives. Realizing the gravity of this challenge, it is required to formulate
effective measures and suggest recommendations to counter this nexus.
Literature Review
Causes of Immigrants’ Nexus of Money Laundering and Terrorism
FATF recommendations are analyzed in continuity to limited available
literature, responsible for suggesting countermeasures against financial crime and
terrorist financing. Financial Action Task Force (FATF) was established in 1989.
Initially, FATF was focused on drug money laundering. FATF’s Recommendations
provide world countries to form effective national and international AML and
counter financing terrorism controls. The IMF and the World Bank support FATF
Recommendations as to the international measure to counter laundering of money
and terrorist financing (FATF, 2020).
During the review of various FATF recommendations, the several actions
are encompassed to counter financial crime and terrorist financing, and its
proliferation. Cooperation in financial intelligence, evidence collection; and actions
against criminals and their assets are also covered (FATF, 2019-20).
However, immigrants’ nexus as a contributing factor in money laundering
and terrorism in FATF recommendations are found missing. Due to the absence of
this challenging factor, particularly for developed countries, the number of
immigrants is rising in developed countries and organized criminal networks are
stretching their muscles.
Immigrants’ Nexus of Money Laundering and Terrorism Threaten Counter-
Regime Measures
UNODC’s various working documents linked to immigration, financial
crime, and financing of terrorism are also reviewed. Organized Crime, Anti-
Money-Laundering, and Law Enforcement Unit of UNODC are tasked to perform
Global Programme against Money-Laundering (GPML), Proceeds of Crime and
the Financing of Terrorism. In 1997, it was established mandate given to UNODC
Dynamics of Money Laundering and Terrorism: In Immigrants’ Nexus Perspective
93
through the United Nations Convention against Illicit Traffic in Narcotic Drugs and
Psychotropic Substances of 1988. Later in 1998, the Unit's mandate was expanded
to all serious crime, beside drug-related offences.
The Global Programme's main objective is to support Member States'
ability to implement measures against financial crime and financing of terrorism. It
helps to confiscate illicit proceeds after detecting and seizing as required in
following United Nations channels and other internationally accepted standards
(UNODC, 2020).
Later, United Nations accepted three more Conventions; Financing of Terrorism
(1999), Transnational Organized Crime (2000), and Corruption (2003), underlining
provisions for countering laundering of money and financing of terrorism linked
crimes for suppression. Also, UN Security Council Resolutions 1267(1999),
1373(2001), 1540(2004), 1566(2004), and 1624(2005) emphasize on the UN
Member States to counter-terrorism, including its financing. Resolution 1617
(2005) of the UN Security Council also underlines Member States to implement
global measures introduced and embedded in the Financial Action Task Force’s
(FATF) Forty Recommendations on the laundering of money and FATF Nine
Special Recommendations on the financing of terrorism (UNODC-GPML, 2020).
However, there is absence of connection of immigrants' aspect of money laundering
and terrorism. GPML provisions on countering laundering of money and terrorism-
related to narco-drugs and other organized crimes are also analyzed in the light of
selected research title.
Consequences of Immigrants’ Nexus in Money Laundering and Terrorism
In response to the challenge of countering financial crime and terrorist
financing, the European Union (EU) introduced various Anti-Money Laundering
Directives in the last decade. Now the EU Fifth AML Directive (“5AMLD”), or
Directive (EU) 2018/843, is the latest directive, which is effective from January
2020. This directive replaces the Fourth AML Directive (“4AMLD”), which aims
at strengthening EU procedures against the laundering of money and terrorist
financing. This was promulgated in response to the Paris terrorist attacks in 2016,
which caused the deaths of more than 130 people (EU, 2020). It is to note here;
most attackers had European origin (BBC NEWS, 2016), which needed to dissect
the challenges which are put forth by the immigrants.
Research Methodology
The study was based on qualitative and quantitative research in nature to
meet the objectives mentioned above. Using qualitative research techniques, it was
synthesized and collated many materials in a new way and sought to improve the
risk identification, assessment, and evaluation of counter financial crime and
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Tahseen Ahmed Shaikh and Ammad Zafar
terrorism regime by answering the research questions. Through the quantitative
aspect, the implementation and the challenges were measured. It included an in-
depth examination of how these measures were followed and involved.
The selected research topic of immigrants' nexus to money laundering and
terrorism is unique. The researcher found the acute absence of information on the
selected topic and related to its mechanism adopted by immigrants to counter
existing laws and measures.
Thus, the primary approach of the research involved hybrid research. This
research analyzed the comprehensiveness of the current anti money laundering and
counter-terrorism regimes program, particularly to immigrants' nexus. It makes
practical suggestions for future improvement in practice. Considering hybrid
research; existing data method, the document and content analysis is carried out to
assess existing anti money laundering & counter-terrorism related policies,
measures, and regulations having immigrants’ nexus. The researcher also examined
secondary resources. The data analysis method was adopted for understanding
statistical information on the selected research proposal title. National conference
publications and annual governmental reports were examined as well.
Related to practical issues, a survey method was performed. Experts dealing
in countering financial crime and terrorism regimes were approached. Adopting the
purposive sample, the researcher identified some respondents who could provide
essential data on the research subject. The researcher envisaged the research
planning work. For this purpose, research questions were set accordingly. The
profound review was carried out by the researcher, which helped to formulate an
appropriate strategy. The researcher followed the pilot-testing methodology under
the factor n=10 criteria out of the respondents' sample. The researcher believed in
following the research ethics in letter and spirit. Besides surveys, agency data was
also gathered primarily by the researcher and involved published statistics. The
profound review was carried out by the researcher, which helped to formulate an
appropriate strategy.
Discussion
Various data collected and analysis carried out and it based on quantitative
and qualitative approach. The dynamics of immigrants’ nexus related to money
laundering and terrorism are highlighted. The researcher found preceding
researchers performed a minimal study, and this scarcity of information motivated
the researcher to dissect the said nexus of immigrants in financial crime and
Dynamics of Money Laundering and Terrorism: In Immigrants’ Nexus Perspective
95
terrorism. Believing that every crime has its retrospective causes and prospective
consequences; thus contemporary factors are also explored and analyzed.
It is analysed that laundering money is an interlinked crime and cannot
ignore the involvement of multiple organized crimes. The rising trend of terrorism
and terrorist activities demands reviewing pertinent collected information on these
aspects of organized crime. These crimes are transnational in nature, and cross-
border organized activities are involved. It cannot be denied that organized criminal
networks have prospered, which led to the proliferation of criminal activities. This
was witnessed during the post-cold war era, where criminal networks replaced
state-sponsored terrorism. Terrorist networks formed groups and found other
sources through organized crimes. The happening of 9/11 emerged as a lethal
combination of laundering money and financing of terrorism. It drew the attention
of the international regime to counter this nexus. From available archives of the
UN’s General Assembly, the resolution 55/25 of 15 November 2000 adopts the
Palermo Convention, "with deep concern" a growing nexus of transnational
organized crime and terrorist groups (UNCTO,2000).
The researcher finds a nexus of organized crimes with money laundering.
Since money laundering is a predicate offense, it is naturally linked to other
organized crimes. The latest scenario depicts an increase in the overlapping of
organized criminal activities among the criminal groups. This also applies to
organized narco-drug and terrorist networks, where narco-money crosses the
borders from country of origin to the destined countries, particularly Europe and
the U.S through money laundering in support of terrorist activities. This trend has
become transnational in nature, not limited to geographical borders.
From the analysis carried out; it depicts that like organized crime, terrorism
cannot be defined in satisfactory terms which could be acceptable to all. When
elements of criminal networks are dissected, there are also non-ideological factors.
To these networks, it is not difficult to challenge the functioning of contemporary
governments. This is further supported by using intimidating tools like kidnapping,
slaughtering, and prevailing corruption (Finckenauer and Albanese, 2005). This
intimidation is also witnessed amongst narco-trafficking cartels where intimidation,
threat, and extortion against prosecutors, judges, politicians, and law enforcement
officials. The main objective is to create mistrust among people against the
legitimate regime. These illegal activities, during the 1980s, created a term of
narco-terrorism (Mylonakia,2002).
Further can be understood; when Raufer defines terrorist financing as,
“financing of terrorism can be divided into two general types: financing from
above, in which large scale financial support is aggregated centrally by states,
companies, charities or permissive financial institutions; and financing from below,
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Tahseen Ahmed Shaikh and Ammad Zafar
in which terrorists fund raising is small-scale and dispersed, from example based
on self-financing by the terrorists themselves using employment or welfare
payments” (Raufer, 2006). This nexus of laundering money and financing of
terrorism has become an extreme threat to the country's security. Related to
hypothesis H1, from the inference of analysis, money laundering and terrorist
financing have spontaneous bondage and at some stage these two form chain
reaction in substantiating organised crime.
Among the various criminal activities, those criminal groups were heavily
involved in those activities which were lucrative in financial terms. Narco
trafficking has been a significant source of their earnings. In 2003, Steven W.
Casteel, the DEA's assistant administrator for intelligence, explained to the U.S
Senate's judiciary committee that the rise of globalization further aggravated the
situation and gave impetus to the criminal activities of those groups. Criminal
networks further stretched their muscles by abusing available technology in
financial channels for money laundering. The situation is further aggravated when
proceeds from narco drug trafficking proliferate terrorism (Steven, 2003).
In terrorist financing, the main objective is to hide the purpose of legal funds
to be poured into terrorist activities. In concealing this nexus, terrorist networks
prefer to smuggle cash, remit cross-border funds in a structured way, layer and
integrate legitimate and illegitimate funds. Hawala or Hundi has been a favourite
to terrorist networks for concealing their identity and money trail against the regime
while transferring from non-developed to developed countries. In its post 9/11
report, USA State Department stated the activism of Al Qaida and other terrorist
networks, cash-based economy, and porous borders of Afghanistan substantiated
the use of informal financial networks, like Hawala. These prevailing conditions
contributed to the export of financial crime and financing of terrorism (INCS
Report, 2010).
Some terrorist groups or organizations adopt complicit charities and
entrepreneurs to make their networking more effective. These networks are so
organized; to justify their terrorist activities. Terrorist groups also influence public
opinion through mass media and propagandize their violence through ideology.
When Kohlmann’s work was analysed, it described, "Groups that use terrorism as
a primary means to pursue their objectives can also utilise affiliated charities as a
source of financing that may be diverted to fund terrorist attacks and terrorist
recruitment by providing a veil of legitimacy over an organization based on
terrorism" (Kohlmann, 2006).
Infact, charity funds are more susceptible to financing terrorism. These
funds are mostly collected in cash, which is also a high-risk factor from a money
laundering perspective. It is not easy to track the trail record of the origination of
Dynamics of Money Laundering and Terrorism: In Immigrants’ Nexus Perspective
97
cash funds and their sources. This ideal scenario gets impetus when these
organizations have global existence in small networks/branch offices and funds are
deposited through different instruments in their accounts maintained in various
jurisdictions. This accumulation and routing of funds from non-developed countries
channelled through placement, layering, and integration cycle of money laundering
are preferred tools by these charity or non-profit organizations. Mainly non-
developed countries have been sources of encouraging grounds to such
organizations/networks due to the weak counter regime of financing terrorism.
Several organizations exist everywhere globally that safeguard the group's
interests and consistently transfer assets at transnational levels worldwide. In 2008,
in the Northern District of Texas, all applicants in the USA vs. Holy Land
Foundation were involved in financing of terrorism through laundering money.
These charity organizations raised funds for the support of Hamas for over 13 years
by camouflaging the actual reason for collecting charity funds. The Financial
Action Task Force highlighted the abuse of charity funds for terrorist financing
purposes in October 2001, where charity funds were transferred for terrorist-related
activities abroad by the hoax charity organizations (Walker, 2018). Such misuse of
charity funds collected for the welfare work was channelled to ease terrorist
activities outside their local destinations, and it also shattered donor confidence
(Laksmi, 2019). Thus from the above analysis related to hypothesis 2; the
researcher concedes that immigrants’ involvement in commission and proliferation
of money laundering and terrorism is irrevocable.
At the termination of the cold war, various existing criminal networks,
which were active in criminal activities at the behest of states, now were left
abandoned. They now switched to other locations where they could have more
financial benefits. As a result, various developed countries faced various terrorist
and money laundering threats (Micco, 2000). The case study of Ramzi Yousef, who
was the leader of the first World Trade Centre terrorist occurrence in 1993,
managed to attack and raise funds. His entry into the targeted country, the U.S, was
possible through immigration violations and fake documents. Furthermore, under
Kane and Wall analysis of terrorist suspects charged for white-collar crimes, 16%
of the defendants in 10 of the 19 states were accused of breaching immigration
laws, included distorting identities as to a U.S resident; manoeuvring of
naturalization, citizenship, or alien registry matters; and improper acquisition of
nationality or naturalization (Kane and Wall, 2005).
From the work of Lormel, criminal identity theft carries the feature "cloak
of anonymity". It is helpful to criminals to commit crimes like noncash frauds-
fraudulent access to plastic money, banking channels and includes cybercrimes.
This further attains culmination when it is applied in terrorist activities, particularly
to foreign lands, free from the watchful eyes of the anti-terrorism regime (Dennis
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Tahseen Ahmed Shaikh and Ammad Zafar
Lormel, 2002). In 2006, Nemr Ali Rahel was found guilty of collecting more than
$500,000 to abet suicide bombers' families through fake information during loan
applications (Poole, 2007). In other similar case, Youssef Kourani and Mohammed
Kraymen routed more than $200,000, collected through real estate fraud, to
Hezbollah’s Chief of Military Security. Fulmer, in his testimony, stated that there
is a rising trend of connections between mortgage industry and terrorist activities
(Fulmer, 2010).
9/11 Commission Report disclosed that identity theft was the primary tool
applied by the criminal networks. Forged travel documents had been a vital
contributing factor also. Through this exercise, they successfully disguised their
true identities from being detected by the law enforcement agencies (NCTA, 2004).
Despite the Identity Theft and Assumption Deterrence Act of 1998 USA, identity
fraud remains a crime, but terrorists keep hoodwinking law enforcement agencies
to carry out their criminal activities (Perry & Brody, 2011). Identity theft is
beneficial to terrorists and harmful to the society where unauthorized access is
gained (FBI, 2005). Indeed, maintaining anonymity before the commission of
terrorist activities in a foreign country is considered vital since it deceives the anti-
terrorist regime of the country. This is being done by making fake identifications
or abuse of someone's stolen identities to enter a country, get employment, and
abuse banking channels to launder money for disguising their illicit funds, the
amount, use, and destination of such funds (Kane and Wall, 2005).
Various available literature was reviewed related to immigration and crime.
It was found that nexus of immigration and crime is not a new phenomenon. In
1880, various publications in the New York Times were witnessed (Simon, 1985).
The surging number of immigrants in developed countries is very high. In the west,
immigration is a highly debated issue. Popular media often depicts immigration as
the main reason behind increasing crime (Junger-Tas et al., 2010).
This nexus requires urgent attention in contemporary society. Both pro and
anti-immigration writers consider the latest immigration surge will be a significant
social issue than any other (Suarez-Orozco 1998; Brimelow 1996). It also
inherently carries the threat of money laundering and terrorism regarding switching
citizens from non-developed countries or regions where counter regimes are
ineffective, or prevalent laws are weak. The researcher believes that developed
countries carry a tremendous risk of proliferation. It directly or indirectly may cause
the commission or involvement of other organized crimes. Also, cross-border
involvement of criminal networks or non-state actors cannot be ignored where
enforcement struggles.
U. N’s report 2019 of the Department of Economic and Social Affairs was
reviewed, the surge of 51 million since 2010 was observed when 272 million
Dynamics of Money Laundering and Terrorism: In Immigrants’ Nexus Perspective
99
international migrants were estimated. This mounting trend is witnessed in both
developed regions. In Europe and Northern America, almost half of all international
migrants reside there. In 2019, Europe saw the highest number of worldwide
migrants (82.3 million). The top 10 countries of destination cater to about half of
all international migrants. The top of them is the United States with other countries
like; the United Kingdom, Germany, Italy, France, and others. One-third of
international migrants on their origin account is from those third world countries
(UN-DESA, 2019). According to the U.N's World Migration Report 2020,
increased violent crimes also compel people to seek refuge in other countries. The
same report; foretells through the data that reveals an increase of hate crimes in
2017 in the United States, with many victims targeted because of their race or
ethnicity (IOM, 2020).
Countries like Mexico, Syria, Ukraine, Afghanistan, and others are weak in
implementing countering terrorism and money laundering measures in their
respective jurisdictions. These jurisdictions possess organized criminal networks
active in national and transnational domains involving serious organized crimes.
For example, in the case of Al-Qaeda, Brisard states that the primary objective of
Al-Qaeda was to foster transnational support for its ideology. In that respect, it
financially crossed borders and supported over the years, various networks in
Libya, Indonesia, Philippine, and Somalia (Brisard, 2002).
In continuation to above, the threat of hate-crime cannot be ignored. United
Nations Secretary-General António Guterres, in his speech in January 2019,
suggested engaging societies against the surge of intolerance, hate-talk, and
xenophobia. To him, these extended direct threats to sustainable development,
human rights, peace, and security (UNODC, 2019). One cannot ignore; if the
intensity of the scenario aggravates, this may lead to polarisation and terrorism.
According to BBC NEWS reports of 2017 & 2019, terrorist attacks at mosques in
New Zealand in 2019; and Barcelona, Spain attacks in 2017 by 22-year-old Younes
Abou Yaaqoub killing 13 people and injuring at least 130 others in the terrorist acts
were outcome of hate-crimes. After the terrorist attacks of 9/11, people were
worried about further terrorist activities inside the U.S. They were highly concerned
about the physical threat to themselves and their families (Nacos, Bloch-Elkon &
Shapiro, 2008).
Former advisor to the 9/11 Commission, Janice Kephart submitted his
report on "Immigration and Terrorism" to investigate record of 94 migrant terrorists
who were active in terrorist activities in the United States during the period of early
1990s and 2004. He concluded that out of 94 terrorists, two-thirds of these were
earlier involved in immigration frauds or connected with the commission of
terrorist doings. He further dissected that the erroneous immigration system had
been a leading cause of the vulnerability and recommended stringent execution of
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Tahseen Ahmed Shaikh and Ammad Zafar
immigration law in the United States (Janice Kephart, 2005). Thus from above
given analysis; the researcher cannot ignore the hypothetical 3 fact that nexus of
immigrants in money laundering and terrorism has serious implications on recipient
/developed countries
Terrorism and organized crime have linkages and to differentiate them is
challenging in terms of their characteristics. Organized criminal groups always tend
to commit violence to achieve their goals and cushion other terrorist groups. This
is the reason, terrorist groups associate their activities with organized criminal
groups and source their continued ideological fight. These complex characteristics
and intermingled activities, the prominent comparative feature is the motivating
factor. The primary motivating factor for organized criminal networks is profits,
while some terrorist groups design their activities under the spirit of ideology or
struggle.
Laundering money and financing of terrorism have variance in nature and
modus operandi when their techniques are analyzed. Thus, it demands various
countermeasures and controls for countering laundering money and financing
terrorism. But the origin of funds is the basic difference between these. However,
there are no separate principles that could operationally distinguish these two.
Terrorist financing doesn't always carry illegal funds. It may have legitimate
sources but continuously will be poured for illicit activities. But money laundering
always has ill-gotten funds out of commission of the crime. These funds may be
further utilized for legal purposes, but their origin is illegal. Criminal networks
always disguise their origin from being traced. So in the scenario of terrorist
financing, it is tough to satisfy legal funds to be used or abused for financing
terrorism. But in money laundering, it is a prerequisite to proving predicate offense
is committed.
The nexus of immigration and crime is not new; it has been a contentious
issue for more than 100 years (Simon, 1985). The researcher realizes the rising
trend of immigrants in developed countries. It is high time to spotlight immigrants'
role in laundering money and terrorism in developed countries. Since this crime has
a tremendous risk of proliferation from non-developed countries or regions where
anti-money laundering and countering terrorism regimes are ineffective or
prevalent laws are weak.
It is generally accepted that the causes for migration stem from the
difference on affluence in the country of origin and the country of destination. The
roots of the migration phenomenon are indeed to be found in the economic, political
and social conditions of the country of origin: fast population growth, very high
level of unemployment, ethnic conflict, oppressive political power, the violation of
Dynamics of Money Laundering and Terrorism: In Immigrants’ Nexus Perspective
101
human rights. All this is in open contrast with the standards in developed countries
(Caritas, 1995).
Conclusion
The Counter regime has not been able to break the yoke of money
laundering and terrorist financing challenges. There is compelling need to analyze
factors responsible for the proliferation of these organized crimes, particularly in
developed countries when it forms nexus with immigrants. This phenomenon
makes this challenge transnational. To the researcher, the rising trend of
immigration to receiving countries would aggravate further proliferation. Despite
experiencing impediments in the research, the researcher believes that the research
work would contribute in many ways by introducing new policies and
countermeasures against money laundering and terrorist financing. If timely action
is not taken; it would facilitate money launderers and terrorist financiers to be more
organized at a larger scale.
The researcher finds absence or minimal literature available, which deals
with immigrants' nexus in the specified organized crimes. This research article
highlights immigrants' linkages of financial crime and terrorism in developed
countries.
This nexus of immigrants leaves a far-reaching impact and needs
countermeasures to be introduced. Believing the article would pave the way for
future researchers to identify gaps solve future challenges. It would also contribute
to raising new countermeasures and policies.
Recommendations
During the past decade, the world witnessed the proliferation of money
laundering and particularly compelled non-developed countries to take counter
measures against laundering of money and financing of terrorism alongside. It
cannot be denied that these networks consider emerging poorly regulated markets/
non-developed countries supportive to their malafide activities. On vice versa,
stringent standards are taken by developed countries against money laundering and
terrorist financing. Thus being transnational in nature, laundering money is a
serious threat to the world's most financial institutions and off-shore financial
centres, where anti-money laundering and terrorist financing regimes are
struggling.
Strict immigration laws play a role as the first line of defence against foreign
residents and try to enter countries to support terrorist networks or facilitate in acts
of terrorism. There is a need to take stringent prevention measures against terrorist
funding. Stringent measures should be taken against terrorist networks by
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Tahseen Ahmed Shaikh and Ammad Zafar
preventing their fundraising, propaganda, and training, which facilitate them to
commission cross-border terrorism in an organized way at the transnational level.
Besides that, to restrict the acquisition of facilities those help organize terrorist
campaigns and attacks, collectively or individually. It demands to centralize
intelligence sharing among law enforcement regimes at domestic and international
levels to trace and crush terrorist operations.
Financial Action Task Force (FATF) is one of the examples of global
counter regime to the financing of terrorism and money laundering. It sets
guidelines and assists in introducing legal, legislative, and organizational measures
against money laundering and the funding of terrorism. FATF's recommendations
and guidelines also deter the creation of militant organizations or networks by
restricting their financial support, forbidding their terrorist acts, and finally, FATF's
recommendations criminalizing terrorist funding, which could be helpful in curbing
terrorist activities at the operational level.
There is a need to take rigorous oversight against the maintenance and
operation of charity accounts. Maintaining transparency in collecting charity funds
and their usage is key control. An independent audit framework should be
maintained by the charity organizations. Proper transaction records of incoming
and outgoing routing of funds should be part of stringent regulatory measures.
More attention is needed by the countries of origin, which have rising
figures of illegal immigration, due to existing pushing factors like poverty,
deprivation, lawlessness, etc. and review their countermeasures in that respect. It
requires streamlining coordination and cooperation of counter regime measures
against criminal networks among countries of origin and destined countries. The
destined countries should also take countermeasures against employers to facilitate
illegal foreign labour force in violations of labour laws. It is recommended that
destined countries that are mostly developed and industrialized countries should
boost the economies of countries of origin and create job opportunities under
different development programs. The United States and the United Kingdom have
taken stern measures by introducing and amending new laws against cybercrime
and facilitating terrorist financing at the transnational level. Similarly, the European
Commission has also taken measures under the same direction by increasing
criminal penalties against cybercriminals and streamlining sharing of information
at the transnational level.
Countries of origin at the counter regime end against illegal immigration,
terrorist networks, and money laundering should also be provided training, logistic
support, and centralized information sharing and combatting efforts. Countries of
origin, which have increased the number of criminal networks facilitating and
coordinating criminals responsible for terrorist activities, money laundering, and
Dynamics of Money Laundering and Terrorism: In Immigrants’ Nexus Perspective
103
other organized crime in the destined countries, should enact stringent laws with
punitive concrete actions at the local level. Therefore, it requires harmonization
among various responsible countries in their laws, policies, and other counter
regime measures at a transnational level.
Global counter regime bodies responsible for curbing illegal immigration,
terrorism, and money laundering should introduce more stringent countermeasures
and make the ratified countries responsible for aligning their existing laws, policies,
and comer measures to the newly enacted measures. Wherever possible, some
punitive actions like applying general or sectoral sanctions should be introduced.
Make sure to trace, collect, forfeit, and freeze assets that are illegal proceeds. In
this respect, wherever possible, to introduce agreed legal options and effective
extradition treaties to tighten noose against active criminal networks or non-state
actors.
Certainly, laws are there to protect foreign lands from undocumented
immigrants; but there is a need to put strict safety walls against the stealing of
identities for abuse by the criminal networks in local and foreign lands
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Dr. Tahseen Ahmed Shaikh is Advisor for anti-money laundering and terrorist
financing risk in International commercial bank.
Dr. Ammad Zafar is Assistant Professor at Department of Management Sciences
in Usman Institute Technology University, Karachi, Pakistan.
