The lifeblood of terrorism

Statement of Foreign Affairs Secretary Teodoro Locsin Jr. at the Security Council Open Debate on “Threats to International Peace and Security Caused by Terrorist Acts: Combating the Financing of Terrorism,” on March 28, 2019, at the United Nations Headquarters in New York City.    

“Money is the lifeblood of terrorism. In the Philippines, the financing of terrorism is a complex web of illicit flows, money laundering, transnational organized crime, especially the drug trade, and even the occasional remittance sent by overseas Filipinos. Porous physical, financial and cyber borders enable it.

“Since Resolution 1373,1 the Philippines has complied with the call to counter the financing of terrorism by all means efficient for its containment and extinction. We have defined “terrorist financing” as a separate crime, and are amending our Human Security Act to address the exploitation of cyberspace for terrorism. Without an international regulatory framework for cyberspace, its increasing use of encrypted platforms for transnational terrorist financing will continue to create security challenges.

“We adopted the 2018-2022 National Anti-Money Laundering and Countering the Financing of Terrorism Strategy, in response to the Financial Action Task Force [FATF] Forty Recommendations2 and our own national risk-assessment exercise. At its core is the lesson that financial intelligence units, law-enforcement agencies, the prosecution service and local government units must work together, share information with each other and raise awareness—not just between private and public sectors— but foremost among themselves. Intelligence gathering has been ineffective because agencies were only looking at terrorist acts and not the means that enable it.

“Our Strategy tells us to further tighten our legal and regulatory framework. Here I want to focus on a crucial driver of the Philippine economy: remittances. Stand-alone money service businesses, particularly remittance agencies, have been used as a channel for terrorist financing. Money transfers through informal channels helped terrorist groups launch the Marawi attack in 2017.

“Remittances account for 9.8 percent of our GDP. Restricting their flow has touched off a cultural nerve of resistance. The challenge is to balance the requirements of counterterrorism and the imperative convenience of those who have struggled in Babylonian captivity to make ends meet in Biblical lands for their families at home. The dilemma has tempted foreign banks to demand they be used exclusively for remittances—at piratical rates. Bankers will be bankers.

“There too are nonprofit organizations. Contributions they get  for laudable purposes are knowingly diverted to—or they are set up precisely as conduits for terrorist financing. These nongovernment organizations operate in the southern Philippines.

“Geographical distribution of threat incidents indicate that some regions are more at risk, hence the need to reinforce counterterrorist mechanisms at the local government level.

“Marawi illustrates the symbiotic relationship between terrorism and the illegal drug trade. With drug money, terrorists were able to gather a motley assortment of well-armed extremists, criminals, mercenaries and foreign terrorist fighters to take control of Marawi and reestablish in our part of the world their shattered caliphate in the Middle East. We met them with all-out force and in six months took back Marawi at a fantastic fatality ratio of 165 of our soldiers slain to over a thousand dead jihadi.

“Our counterterrorism efforts are anchored on respecting human rights because a state’s first, foremost and overriding responsibility is to protect the law-abiding against the lawless; and the innocent against those threatening their safety and well-being. To that responsibility my President has made an iron, unwavering and total commitment. We just don’t care about politically compromised public opinion to the contrary. It won’t be pretty, but we will get them. Thank you. The Philippines is pleased to cosponsor this resolution.”

It was a long morning but not, I think, unproductive. The head of the FATF delivered a detailed but well-written and coherent statement—a rare thing with long disquisitions.

     1S/RES/1373 (2001), Creation of Counter Terrorism Committee (CTC).

     2The FATF Forty Recommendations are the internationally endorsed global standards against money laundering and terrorist financing.


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