Drafting Notes On Specific Matters

Pages:43-73

Page 43

Criminalizing the Financing of Terrorism
General

Authorities wishing to implement the provisions of the Convention and to respond to the requirements of the Resolution would need to consider two separate but related types of conduct regarding the financing of terrorism. One is the financing of terrorist acts, as defined in Article 2 of the Convention. The other is the provision of financial support to terrorists and terrorist organizations, as stated in paragraph 1(d) of the Resolution. While the requirements relating to these forms of conduct are similar, they are not identical, and it will be for the authorities of each country to decide in which way each type of conduct will be characterized in local law.109 Before considering the differences between the two requirements, it should be noted that paragraph 1(b) of the Resolution requires the criminalization of the financing of terrorist acts, using language that is very close to that of the Convention. Read with paragraph 3(d), which calls upon states to become parties to the Convention "as soon as possible," paragraph 1(b) of the Resolution is a clear reference to criminalization of the financing of terrorist acts as defined in the Convention. It would follow that paragraph 1(d) requires something additional to the criminalization of terrorist acts.

While both the Convention and paragraph 1(d) of the Resolution deal with the provision of financial assistance directed towards terrorism, there are notable differences between the two. First, while the Convention clearly requires the criminalization of the financing of terrorist acts, paragraph 1(d) of the Resolution appears to take a different approach. Rather than requiring that countries criminalize the provision of funds and services to terrorists, it requires them to "prohibit their nationals and entities within their territories" from making financial assistance available to terrorists and terrorist organizations. This language appears deliberate, as it stands in contrast to the language used in paragraph 1(b) of the Resolution referred to above, which requires the criminalization of the financing of terrorist acts. The thrust of Page 44 paragraph 1(d) is to stop the flow of funds and financial services to terrorists and terrorist organizations, whether this is accomplished through criminalization or other means.

Second, as regards the nature of such assistance, the requirement in paragraph 1(d) of the Resolution is broader than that in the Convention. The Convention criminalizes the provision of "funds," which it defines as the equivalent of assets, while the Resolution uses the broader form "funds, financial assets or economic resources or financial or other related services." Taking into account the broad definition of "funds" in the Convention, what is covered by the Resolution and not by the Convention is the provision of "financial or related services."110

Third, the range of persons and entities that must be prevented from receiving funds or services is defined in the Resolution, but not in the Convention. In the Resolution, the list of such persons includes not only the persons who commit or attempt to commit, or facilitate or participate in acts of terrorism, but also entities owned or controlled, directly or indirectly by such persons, and entities acting on behalf or at the direction of such persons. The Convention defines only terrorist acts, not terrorists or terrorism, and, by implication, any person who commits, or may commit, an act of terrorism, would be included.

It would follow from the above that, in addition to criminalizing the financing of terrorist acts in accordance with the Convention, the Resolution requires in its paragraph 1(d) that countries prevent the flow of funds and services to terrorists and terrorist organizations. The manner in which this is to be done is left to each country. One way to accomplish this would be to provide for the freezing of the assets of the classes of persons and entities enumerated in paragraph 1(d), and to prohibit the provision of financial and other services to such persons.

In many jurisdictions, the freezing of assets and the prohibition of the provision of resources would be based on the criminalization of the conduct alleged on the part of the owners of the assets to be frozen, and who would be the intended recipients of the financial assistance.111 In others, the provisions would rest on the establishment of lists of persons and Page 45 organizations deemed to be engaging in such conduct. For example, the Barbados Anti-Terrorism Act 2002-6 criminalizes both the provision or collection of funds intended for terrorism purposes, and the provision of financial services for such purposes. The freezing and forfeiture provisions of the Act are then linked to charges under the terrorism offense as so defined.112 In other countries, such as Canada, the freezing of assets and the prohibition of financial support are based on a list of individuals and organizations issued by the Government on the basis of information that the person or entity is engaging in a terrorist activity, independently of any indictment against such person or entity.113 In the context of the European Union, the measures called for in paragraph 1(b) of the Resolution on criminalization have been taken by each country member of the European Union, while the measures related to the freezing of assets of terrorists and terrorist organizations have been taken at the Union level.114

Defining Terrorist Acts

The nine treaties listed in the Annex to the Convention did not attempt to define terrorism, but rather defined specific acts in a way that did not use the term "terrorism." The most recent of these treaties, the International Convention for the Suppression of Terrorist Bombings, uses the terms "terrorist" and "terrorism" in its title and in its preamble, and refers to resolutions of the General Assembly on terrorism, but it defines the offense of terrorist bombing without using the term. As is the case of the nine treaties listed in its Annex, the Convention does not define terrorism. Rather, it contains a definition of terrorist acts, which provides the basis for the definition of the financing offenses set out in the Convention.

The Resolution does not define "terrorism." It requires states to "prevent and suppress the financing of terrorist acts,"115 and to "become parties to the [...] Convention."116 It also requires states "to prohibit [persons] from making any funds, financial assets or economic resources [...] for the benefit Page 46 of persons who commit or attempt to commit [...] terrorist acts [...]."117 The absence of any indication that a wider definition is required, together with the reference to the Convention, leads to the conclusion that the Resolution does not require that states define terrorism or terrorist acts in a manner wider than the Convention.118 Many states have used or adopted a wider definition, but this is not required by the Resolution.

FATF Special Recommendation I states that the financing of terrorism "should be criminalized on the basis of the Convention." In the following notes, the basis for the discussion of a definition of terrorist acts is the definition contained in the Convention.

Types of Terrorist Acts

Terrorist acts are defined in the Convention as (i) the terrorist acts set out in at least those of the nine international treaties listed in the Annex to the Convention to which the country is a party ("treaty offences"); and (ii) terrorist acts as defined in the generic definition set out in Article 2 (b) ("generic offences").

"Treaty offences"

Article 4, paragraph 1 (a) of the Convention refers to nine treaties, contained in the Annex to the Convention, and makes it an offense to provide or collect funds with the intention or in the knowledge that these funds will be used to carry out an offense defined in one of the listed treaties.119 The drafters of the Convention recognized that a country may not have become party to all nine treaties listed in the Annex to the Convention at the time it became a party to the Convention. The Convention authorizes states parties to declare, at the time of becoming a party to the Convention, that a treaty to which the country is not a party will be deemed not to be included in the Annex to the Convention, such declaration ceasing to have effect at the time the country becomes a party to the treaty. Conversely, if a state party to the Convention ceases...

To continue reading

Request your trial