Financial Crime World

Terrorist Financing Activities Involving ISIS in the United States

Evolution of Terrorist Financing Methods

In recent years, there has been a significant shift in the ways individuals and organizations supporting the Islamic State (ISIS) in the United States facilitate financial transactions. Despite a reduction in the number of U.S. persons traveling overseas to join ISIS in Iraq and Syria, terrorist financing activities continue to pose challenges for financial institutions.

  • Reduced Travel, Increased Support: While fewer individuals are traveling abroad to join ISIS, some may be shifting their efforts to support branches and networks in other regions, such as Africa, South Asia, and Southeast Asia.
  • Alternative Fund Transfer Methods: Some reports indicate that U.S.-based ISIS supporters collect and consolidate donations within the United States and then transfer funds outside of the country using unwitting money services businesses (MSBs) rather than unwitting banks.

Challenges in Detecting Terrorist Financing Activity

  • Infrequency and Small Dollar Amounts: The infrequency or inconsistency and small dollar amounts of these donations make it challenging for financial institutions to detect this activity proactively.
  • Indirect Relationships: The indirect relationship between U.S.-based ISIS supporters and ISIS operatives further complicates efforts to monitor transactions.

Innovative Methods Used by ISIS Financial Facilitators

  • Shell Companies: ISIS financial facilitators are exploring ways to move funds raised in the United States to shell companies around the world, creating layers between U.S.-based supporters and ISIS that allow transactions to circumvent monitoring by financial institutions.