The main sources of international obligations in the combating of the financing of terrorism are the Resolutions of the United Nations Security Council, and in particular, Resolution No. 1373 (2001) (hereinafter "the Resolution") and the earlier resolutions requiring the freezing of assets of listed terrorists, and the International Convention for the Suppression of the Financing of Terrorism (hereinafter "the Convention"). In addition to these formal sources of international obligations, the Financial Action Task Force (FATF) issued a set of eight Special Recommendations on Terrorist Financing (hereinafter "the Special Recommendations") on October 30, 2001 and invited all countries to implement them and to report to the FATF on their implementation.
There is considerable overlap among these various obligations and standards. For example, both the Resolution and the Special Recommendations call for countries to become parties to the Convention and to implement its provisions internally. Similarly, the Resolution, the Convention, and the Special Recommendations each deal with aspects of the freezing, seizure, and confiscation of terrorist assets. The Convention requires states parties to consider adopting some of the standards contained in the FATF 40 Recommendations on Money Laundering. Apart from these and other areas of overlap, each instrument contains provisions not found in the others. For example, the Special Recommendations contain references to alternative remittance systems, wire transfers and non-profit organizations-three topics that are not covered by the Resolution and the Convention.
The three main sources of international obligations and standards, namely the Convention, the Resolution and the FATF Special Recommendations, will be examined in turn. Page 5
The International Convention for the Suppression of the Financing of Terrorism is the result of a French initiative strongly supported by the Group of Eight (G-8).9 In May 1998, the Foreign Ministers of the G-8 identified the prevention of terrorism fund-raising as a "priority [area] for further action."10In the fall of 1998, France initiated the negotiations of the Convention, and proposed a text to the United Nations. In December 1998, the General Assembly decided that the Convention would be elaborated by the ad hoc committee established by Resolution 51/210.11 The text of the Convention was adopted by the General Assembly on December 9, 1999.12 The Convention has been signed by 132 states, and, as of April 30, 2003, it was in force among 80 states.
The Convention contains three main obligations for states parties. First, states parties must establish the offense of financing of terrorist acts in their criminal legislation. Second, they must engage in wide-ranging cooperation with other states parties and provide them with legal assistance in the matters covered by the Convention. Third, they must enact certain requirements concerning the role of financial institutions in the detection and reporting of evidence of financing of terrorist acts. Table 1, below, sets out a list of the substantive provisions of the Convention. Page 6
Table 1. Summary Contents of the Convention Article Contents
|Article 4||Criminalize the financing of terrorism (FT) as defined in Articles 2 and 3.|
|Article 5||Establish liability (criminal, civil, or administrative) of corporations for FT.|
|Article 6||Exclude excuses for FT based on political, philosophical, etc., considerations.|
|Article 7||Establish jurisdiction over FT offenses.|
|Article 8||Establish power of state to identify, detect, freeze, or seize assets used in committing FT offenses.|
|Articles 9, 17, and 19||Establish procedure for detention of persons suspected of FT (including notification of other jurisdictions).|
|Article 10||Implement principle of “prosecute or extradite.”|
|Article 11||Implement provisions on extradition.|
|Articles 12-15||Implement provisions on mutual cooperation and extradition.|
|Article 16||Implement provisions on transfer of detainees and prisoners.|
|Article 18, 1||Take FT prevention measures, including:|
|(a)||Prohibit illegal encouragement, instigation, organization, or engaging in FT offenses.|
|(b)||Require financial institutions to utilize the most efficient measures available for customer identification, pay special attention to suspicious transactions, and report suspicious transactions, and, for this purpose, consider regulations on unidentified account holders and beneficiaries; on documentation for opening accounts for legal entities; on suspicious transaction reporting; and on record retention.|
|Article 18, 2||Consider:|
|(a)||Supervision measures, including, for example, licensing of all money transmission agencies; and|
|(b)||Feasible measures to detect or monitor cross-border transportation of cash.|
|Article 18, 3 (a)||Establish channels for exchange of information between competent agencies and services.|
|(b)||Establish procedures for cooperating with other parties in enquiries on (i) persons and (ii) funds suspected of FT involvement.|
|Article 18, 4||Consider exchanging such information through Interpol.|
The Convention requires each party to adopt measures (a) to establish under its domestic law the offenses of the financing of terrorist acts set out in the Convention, and (b) "to make [these] offences punishable by appropriate penalties which take into account the grave nature of the offences."13Financing of terrorism is defined as an offense established when a person "by any means, directly or indirectly, unlawfully and wilfully, provides or collects funds with the intention that they should be used or in the knowledge that they will be used in full or in part, in order to carry out [a terrorist act as defined in the Convention]." The mental element and material elements of the offense will be discussed in turn.
There are two aspects to the mental element of the financing of terrorism as defined in the Convention. First, the act must be done willfully. Second, the perpetrator must have had either the intention that the funds be used to finance terrorist acts, or the knowledge that the funds would be used for such purposes. In this second aspect, intent and knowledge are alternative elements. The Convention does not provide further information on these two aspects of the mental element, and therefore they are to be applied in accordance with the general criminal law of each state party.
The definition of the offense of terrorism financing in the Convention contains two main material elements. The first is that of "financing." Financing is defined very broadly as providing or collecting funds. This element is established if a person "by any means, directly or indirectly, unlawfully and willfully, provides or collects funds [...]."14
The second material element relates to terrorist acts, which are defined in the Convention by reference to two separate sources. The first source is a list of nine international treaties that were opened for signature between 1970 and 1997, and which require the parties to them to establish various terrorism offenses in their legislation. The list is set out in the Annex to the Convention, and is reproduced in Box 1, below.15 The Convention allows a state party to exclude a treaty from the list, but only if the state is not a party to it. The exclusion ceases to have effect when the state becomes a party to the treaty. Conversely, when a state party ceases to be a party to one of the Page 8 listed conventions, it may exclude it from the list of treaties applicable to it under the Convention.16
Box 1. The Annex to the Convention
The Annex to the Convention sets out the list of the nine international treaties that contain terrorist crimes, as follows:
(1) Convention for the Suppression of Unlawful Seizure of Aircraft, done at The Hague on December 16, 1970.
(2) Convention for the Suppression of Unlawful Acts against the Safety of Civil Aviation, done at Montreal on September 23, 1971.
(3) Convention on the Prevention and Punishment of Crimes against Internationally Protected Persons, including Diplomatic Agents, adopted by the General Assembly of the United Nations on December 14, 1973.
(4) International Convention against the Taking of Hostages, adopted by the General Assembly of the United Nations on December 17, 1979.
(5) Convention on the Physical Protection of Nuclear Material, adopted at Vienna on March 3, 1980.
(6) Protocol for the Suppression of Unlawful Acts of...