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JMLC
22,4 Combatting the financing of
terrorism in Austria, Germany,
Liechtenstein and Switzerland
782 A hopeless case?
Fabian Maximilian Johannes Teichmann
Teichmann International AG, St. Gallen, Switzerland

Abstract
Purpose – Whilst the existing literature focuses on developing prevention mechanisms for banks, this
paper aims to show how feasible it still is in Austria, Germany, Liechtenstein and Switzerland to finance
terrorism without getting detected.
Design/methodology/approach – A three-step research process, including both qualitative and
quantitative methods, was applied. The empirical findings are based upon qualitative content analysis of 15
informal interviews with illegal financial services providers and 15 formal interviews with compliance
experts and law enforcement officers.
Findings – During those interviews, concrete and specific methods of financing terrorism and limiting the
risks of facing a criminal prosecution were discussed. The interviews were analyzed based upon a qualitative
content analysis. To assess the risk, which criminals, a quantitative survey among 181 compliance officers
was conducted to determine what leads to investigations.
Research limitations/implications – The findings are limited to the 30 interviewees’ and 181 survey
participants’ perspective.
Practical implications – The practical implications include suggestions for providing law enforcement
and intelligence agencies with new tools, such as remote online searches of electronic devices.
Originality/value – Whilst the empirical findings are based upon Austria, Germany, Liechtenstein and
Switzerland, the results could be applied on European level.
Keywords Literature, Drug trafficking, Financing, Terrorism financing, Terrorism, Criminal
Paper type Research paper

Journal of Money Laundering
Control
Vol. 22 No. 4, 2019
pp. 782-795
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-10-2017-0058
Introduction
The financing of terrorism has been combatted since the (1980s. Since the efforts before the
9/11 attacks were insufficient, they have been intensified throughout the past 15 years
(Pieth, 2002; 115 f.; Weintraub, 2002, p. 53). In addition to war efforts in Iraq and
Afghanistan, many nations focused on fighting a “financial war against terrorism” (Barrett,
2009, p. 9; Davis, 2003, p. 269). The ultimate goal is to both eradicate terrorism and prosecute
terrorists (Betti, 2006, p. 1104). Fighting the financing of terrorism seems to be a rather
useful tool since terrorist attacks are usually associated with costs and terrorists hence need
money (Freeman, 2011, p. 461; Gurulé, 2010, p. 21).
However, combatting the financing of terrorism is a very complex and expensive task.
The costs are easily justified by confronting them with those of terrorist attacks, including
military reactions and economic effects (Frey et al., 2007, p. 1; Barrett, 2009, p. 8; Brown et al.,
2004, p. 861; Kaufmann et al., 1997, p. 83; Gläser and Shapiro, 2002, p. 205). Hence, it is
generally agreed that fighting the financing of terrorism could be worth the effort. However,
since Europe has recently had to face a significant number of low cost terror attacks, the
question whether it is hopeless to combat terrorism by drying out its funding has raised. Combatting
Whilst it needs to be acknowledged that the costs of terrorist attacks are rather low, the the financing
underlying infrastructure of terrorist organizations also need to be accounted for (Danziger,
2012, p. 227; Ganor, 2008, p. 287 f.; Simser, 2011, p. 334; Weintraub, 2002, p. 59). By fighting
of terrorism
the financing of terrorism, it is possible to weaken this infrastructure (Gardner, 2007, p. 326;
Shapiro and Siegel, 2007, p. 405).
This article will show how feasible it still is in Austria, Germany, Liechtenstein and
Switzerland to finance terrorism without getting caught. In particular, empirical findings of 783
30 expert interviews will emphasize trends in methods of funding and transferring assets
and show how terrorists need to proceed to limit their risk of being detected. In addition,
weaknesses in law enforcement, compliance and intelligence will be highlighted.
Subsequently, suggestions for legislative measures to fight the financing of terrorism in
more effective ways will be presented. It will be concluded that combatting the financing of
terrorism in Austria, Germany, Liechtenstein and Switzerland is by no means a hopeless
case. However, it will also be emphasized that currently it is very feasible to finance
terrorism and hence legislative measures are needed.

Literature review
The existing literature on concrete methods of the financing of terrorism in Austria,
Germany, Liechtenstein and Switzerland is rather inconclusive. Previous studies focused
primarily on the definitions of the financing of terrorism, international organizations in
charge of combatting this phenomena and compliance mechanisms. However, it has not
been investigated in sufficient depth how exactly terrorists and their helpers proceed when
they want to finance terrorism.
First of all, it has to be defined which phenome should be discussed (Veng Mei Leong,
2005, p. 19). Unfortunately, there is no uniform definition of terrorism or its financing
(Cooper, 2001, p. 881; Ruby, 2002, p. 9 f.; Tilly, 2004, p. 5 f.; Tofangsaz, 2012, p. 386). For the
purpose of this article, the definition contained in the International Convention for the
Suppression of the Financing of Terrorism, adopted by the General Assembly of the United
Nations in resolution 54/109 of December 9th, 1999, will be applied since it served as a
foundation for the national legislative measures outlawing the financing of terrorism in
Austria, Germany, Liechtenstein and Switzerland.
Terrorists appear to rely upon a broad variety of both legal and illegal sources of funding
(Dalyan, 2008, p. 139; Raphaeli, 2003, p. 59). Examples for legal sources include but are not
limited to real estate and stock market investments as well as salaries for labor. Illegal
activities included smuggling, fraud, theft, drug trafficking, kidnappings, robbery and
money laundering (Dalyan, 2008, p. 140). In the past, both legal and illegal gifts from
supporters also played an essential role (Engel, 2004, p. 251 f.; Hroub, 2006, p. 73; Flanigan,
2006, p. 641 f.; Roy, 2007, p. 162; Tierney, 2017, p. 15). Smart terrorists use legal sources of
funding to avoid facing prosecution for money laundering (Simser, 2011, p. 335). Since
terrorists can use such a broad variety of potential sources of funding, it is almost
impossible to dry out all of them. Hence, law enforcement and intelligence agencies
primarily focus on the transfer of assets.
For transferring assets terrorists and their helpers can but do not need to rely upon the
regulated and hence overwhelmingly compliant financial sector. They can use hawala
bankers, cash couriers, money transfer services or crypto currencies (Cassella, 2004, p. 285;
Dalyan, 2008, p. 140; Irwin and Milad, 2016, p. 407; Ridley, 2008, p. 29 f.; Vlcek, 2008, p. 296).
Smart terrorists presumably use a combination of those methods. However, while the
current literature points out which areas might be of interest for the financing of terrorism, it
JMLC does not illustrate how exactly terrorists have to proceed to successfully commit their crimes
22,4 without getting caught.
Fighting the financing of terrorism requires international collaboration (Gardella, 2003,
p. 121).
The Financial Action Task Force (FATF) is the most relevant organization in the fight
against terrorism (Gilmore, 2004, p. 89 f.; Levi et al., 2014, p. 10). Its peer reviews help to
784 improve legislative measures around the globe (Beekarry, 2011, p. 143; Bossong, 2012,
p. 519; Scott, 1995, p. 1 f.; Stessens, 2001, p. 199). Whilst there is a vast amount of literature
on the regional and global associations fighting the financing of terrorism, those
organizations are not the focus of this article.
The current mechanisms to fight the financing of terrorism heavily rely upon private
enterprises (Barrett, 2011, p. 720). Banks carry out transaction analysis and watch out for
clients matching the profiles of foreign terrorist fighters provided by financial intelligence
units. In addition, they identify beneficial owners, freeze assets and report suspicious
activities to the competent authorities (Gurulé, 2010, p. 194 f.; Tupman, 2009, p. 190 f.).
A significant literature gap has been identified. Namely, the existing literature focuses on
definitions, international organizations and compliance mechanisms but does not
sufficiently cover how exactly terrorism is financed. Understanding the trends among
concrete steps terrorists take to finance themselves is, however, essential to be able to
develop effective preventive measures.

Research design
Since this study investigates a new field and it is hence not possible to develop solid
hypothesis, an explorative approach is required (Bowen, 2005, p. 208 f.; Buckler, 2008, p. 208;
Creswell, 2013, p. 183; Crouch and McKenzie, 2006, p. 483; Tewksbury, 2009, p. 901;
Tewksbury et al., 2010, p. 391). It would not be possible to launch a quantitative study since
terrorists and their financial supporters would fear criminal prosecution and it would hence
be unrealistic to find many participants. In addition, this study’s goal is to gain a first access
to a new field and hence quantitative studies would not be sufficiently open (Kracauer, 1952;
Myers, 1997, p. 241). The results of the qualitative study, however, can subsequently be used
to develop and test hypothesis (Bogner et al., 2014, p. 23).
Suitable interviewees with particular expertise in the financing of terrorism have to be
chosen (Creswell, 2013, p. 189 f.). Ideally, one could conduct interviews with terrorists and
law enforcement officers. Simply interviewing compliance or law enforcement officers
would not be sufficient since the terrorists’ perspective also needs to be considered.
However, terrorists are also unlikely to agree to formal expert interviews. Hence, 15 illegal
financial services providers have been interviewed in informal settings. While those
interviews could not be transcribed, they provided numerous valuable insights on how
terrorists finance themselves. Those insights served as a foundation for 15 formal
interviews with compliance and law enforcement experts. All 30 interviews were semi-
standardized to ensure that the answers were comparable.
Those 30 interviews were systematically analyzed based upon the strict rules of a
qualitative content analysis (Bogner et al., 2014, p. 72 f; Creswell, 2013, p. 194 f; Froschauer
and Lueger, 2003, p. 111; Graneheim and Lundman, 2004, p. 105 f; Mayring, 2010, p. 13 f.).
While the informal interviews were not registered due to the interviewees’ fear of criminal
prosecution, the formal ones were strictly transcribed. Subsequently, relevant statements
were extracted from the text. They were then paraphrased, generalized and put into a
category system. The category system was ultimately assessed on its objectivity, reliability
and validity by triangulation (Healy and Perry, 2000, p. 118 f; Mayring, 2010, p. 51;
Mays and Pope, 2000, p. 50; Morse et al., 2002, p. 13 f.; Rolfe, 2006, p. 304 f.; Whittemore et al., Combatting
2001, p. 522). The category system showed how terrorists can finance themselves and which the financing
steps they need to take to limit their risks.
Ultimately, a quantitative survey was conducted to understand how the compliance
of terrorism
officers’ attention is attracted and which trends can be observed when it comes to financial
crime. In particular, five hypotheses were tested:

H1. Compliance officers base their investigations on electronic risk systems. 785
H2. Compliance officers base their investigations on internal warnings.
H3. Compliance officers base their investigations on external warnings.
H4. A trend towards non-financial sectors can be observed.
H5. Jurisdictions with weak regulation are vulnerable to this trend.
The findings are presented and discussed below.

Empirical findings
Informal interviews
During the interviews with the 15 illegal financial services providers, it was found that
terrorists in Austria, Germany, Liechtenstein and Switzerland rely upon both legal and
illegal sources of funding. Legal sources consist mainly of the proceeds of real estate and
stock market investments. Illegal sources range from value added tax fraud and the
fraudulent trade with CO2 certificates to trafficking of humans, weapons and drugs. In
addition, kidnappings and online as well as insurance fraud also seem to play a role.
The interviews with the 15 illegal financial services providers have also indicated that
terrorists in Austria, Germany, Liechtenstein and Switzerland currently rely upon four main
methods of asset transfer. Namely, they use bank transfers, hawala networks, cash couriers
and crypto currencies.
The formal interviews were not meant to provide detailed information. Moreover, they
were designed to identify particular topics, which could then be investigated during formal
interviews. Hence, the focus of the empirical findings will be placed on the formal
interviews.

Formal interviews
The findings of the informal expert interviews were used as a foundation for formal
interviews. In particular, five areas were investigated. The sources of funding, the ways of
transferring assets, the traits of the financers of terrorism, weaknesses of law enforcement,
compliance and intelligence actors and ultimately potential solutions from both the
criminals’ and the prevention experts. However, it should be emphasized that the potential
solutions are simply based upon the results of the interviews and do not constitute policy
proposals. This paper’s purpose is primarily to shed light on how feasible it is
For the readers’ convenience, the results of the subsequent interviews with compliance
experts and law enforcement officers are summarized in the table below Table I:

Quantitative survey
Those findings are in line with a quantitative survey of 181 compliance officers.
Interestingly, 74.5 per cent of the surveyed experts agreed that due to high compliance
standards in the financial sector, a trend towards other sectors could be observed. In
 22,4

786
JMLC

Table I.
Traits of financers of Law enforcement, compliance
Funding Transfer of assets terrorism and intelligence weaknesses Potential solutions

Assets are often not Trend to technical Often intelligent and Too slow Knowledge gained from investigations
incriminated solutions well educated against the financing of terrorism has to be
used for further intelligence efforts
Combine funds of both Use money transfer and Have access to expert Accused of abusing the Countries adjacent to areas controlled by
legal and illegal origin mobile payment literature pretext of fighting terrorism terrorist organizations have to be supported
services for looking for tax evaders or
money launderers
Variety of sources Use non-regulated Learned from the The current structures still More severe sanctions are needed
sectors methods of money overwhelmingly focus on large
laundering organizations and do not take
lonely wolves into account
Not limited to money Every form of Only small fish are Undercover agents should be allowed to
transferring assets is caught commit minor crimes
suitable for the
financing of terrorism
Small amounts of money Engage in cross-border Act like states Adjust the standards of care for both
often suffice transactions lawyers and public notaries to those of
financial services providers
Use normal bank Trend to move from Increased international cooperation to seize
accounts to avoid large organizations to money
attracting attention lonely wolves
The Islamic State Increased exchange of information between
learned from Al-Qaida private enterprises and public law
enforcement or intelligence organizations
particular, 86.0 per cent believed that cash based sectors were particularly vulnerable. In Combatting
addition, 84.0 per cent were convinced that both economic sectors and jurisdiction with the financing
weak regulation are vulnerable to this trend.
The surveyed 181 compliance officers also indicated that their investigations were based
of terrorism
on electronic risk systems (69.4 per cent), internal warnings (71.4 per cent), external
warnings (65.3) percent and a combination of other factors (19.4 per cent). Those other
factors included newspaper reports, internet searches and external databases.
Hence, it can be concluded that the five hypotheses have been confirmed. 787

Discussion
The results displayed in the table above will be discussed below.

Funding
Regarding the sources of funding, the formal expert interviews have revealed that the assets
are often not incriminated. Terrorists appear to make an effort to avoid prosecution for
money laundering. The major advantage of the financing of terrorism is that the criminal act
often only takes place in the future and hence criminal prosecution is far more difficult if
only legitimate sources in income are used. If terrorists use funds, which they gain from
illegal sources, they can be prosecuted for money laundering. However, if they instead use
funds of legal origin, prosecutors have to wait until the funds have been transferred and can
be used for terrorist activities. To satisfy this high burden of proof, one often has to wait
until terrorist activities have already taken place and hence the terrorists have achieved
their goal.
Alternatively, terrorists appear to combine funds of both legal and illegal origin. Thereby
they also create evidence problems for prosecutors. After all, to seize funds one generally
has to prove that they are of illegal origin. This is a rather challenging task if both legal and
illegal funds have been combined and the terrorist claims that all assets are legitimate.
It should also be taken into consideration that terrorism can be financed through a
variety of sources. Drying out the financing of terrorism by eliminating its sources of
funding is an almost impossible task. Potential sources of income range, as pointed out in
the literature review, from real estate and stock market investments to all kinds of criminal
activities, such as kidnappings or drug trafficking.
In addition, the financing of terrorism is not limited to money. One could also procure
weapons and bombs or other materials used for terror attacks. After all, one could also
support terrorist organizations by simply providing terrorists with housing and food to
enable them to prepare for an attack without having to manage daily household tasks.
Last but not least, it needs to be taken into consideration that small amounts of money
often suffice. Terrorist attacks are not too expensive. A small amount of money, such as
10’000 Euros, could allow a terrorist to buy dynamite and a gun. In particular, the recent
attacks in Stockholm, Berlin and London also emphasize that terrorists do not require large
funding but can already create massive damage with an automobile.

Transfer of assets
Since drying out the sources of funding is not a realistic option due to the large variety of
forms of potential income for terrorists, law enforcement and intelligence efforts have
traditionally focused on the transfer of assets. The formal interviews have emphasized
numerous general trends regarding the financing of terrorism. First and foremost, the
increasing trend to technical solutions. Applications range from the use of online banking
services to avoid facing bank employees to the transfer of assets through crypto-currencies.
JMLC The latter, however, are primarily suitable for the transfer of smaller amounts. While it is
22,4 feasible to acquire Bitcoin for 2’000 Euros in Slovakia, it is rather challenging to buy Bitcoin
for 2’000’000 Euros.
However, it has also been noted that almost every form of transferring assets is suitable
for the financing of terrorism. Hence, eliminating the methods of transferring assets is
almost as complicated as drying out the sources of funding. Nevertheless, a selected number
788 of general trends and tendencies could be identified during the interviews.
Financers of terrorism also appear to use money transfer and mobile payment services.
However, those services have implemented excellent compliance mechanisms. Hence,
terrorists use straw men, who claim to be the beneficial owners of the assets, which
are transferred. For money transfer services, which transfer assets almost in real time, it
often takes multiple suspicious transactions before they are able to notice a strange scheme
through their analysis.
In addition, just as money launderers, terrorists tend to use non-regulated sectors. In
particular, hawala banking seems to play an important role for the financing of terrorism. In
contrast to regulated financial services providers, hawala bankers usually do not implement
strict compliance measures.
Financers of terrorism tend to engage in cross-border transactions. This makes it more
difficult for both law enforcement and intelligence agencies to follow those transactions and
seize assets. In particular, terrorists appear to involve countries, which are not well known
for collaborating with public officials of other jurisdictions.
Apparently, financers of terrorism commonly use normal bank accounts to avoid
attracting attention. One would be mistaken to think that terrorists use exclusively crypto-
currencies, cash couriers and the services provided by hawala bankers. In many cases the
most plausible and efficient way of transferring assets is a normal bank account. Obviously,
terrorists could expect to face questions. However, they usually have well prepared and
extraordinarily plausible explanations for their behavior, which they are willing to support
with documents upon first request.
Ultimately, it should also be mentioned that the Islamic State learned from Al-Qaida.
Terrorist organizations can be compared to multinational corporations. They observe each
other and learn from mistakes. The Islamic State observed how Al-Qaida was weakened by
efforts of the international community and adjusted its techniques accordingly.

Traits of financers of terrorism

In addition, it was suggested that the people financing terrorism are often intelligent and well
educated. One would be mistaken to assume that terrorists are generally less educated than
prosecutors. The experts have argued that the financers of terrorism are often well trained in
both economics and law. They run profitable businesses and contribute a certain share of
their income to terrorism. In addition, they continuously analyze the law enforcement
agencies’ efforts and adjust their behavior accordingly in an effort to avoid prosecution.
Furthermore it needs to be taken into account that financers of terrorism have access to
expert literature and hence develop plausible explanations for their actions. There is a vast
amount of literature on compliance mechanisms available. Smart financers of terrorism use
their access to this information to develop sophisticated methods.
Financers of terrorism learned from the methods of money laundering and are hence
trained to avoid leaving traces. After all, financing terrorism is in many aspects a backward
version of money laundering. While money launderers usually have incriminated assets and
need to integrate them into the economic system to be able to use them for legal purposes,
terrorists frequently have legitimate sources of income and have to get money out of the Combatting
system to be able to use it for illegal purposes. the financing
Only small fish are caught. Due to the fact that the financers of terrorism are often both
intelligent and well educated, it is difficult to prosecute them. The interviewees assume that
of terrorism
only small fish, the less smart ones, are caught and hence believe that there is a vast dark
field of financing of terrorism.
Another aspect, which needs to be considered, is that in some cases terrorists have
massive organizational structures. Large organizations, such as the Islamic State, do indeed
789
act like states. While those structures have the advantage that they are relatively easy to
identify, they are subject to the disadvantage that they provide terrorists with the
opportunity to develop increasingly complex methods.
However, a trend to move from large organizations to lonely wolves has evolved. In
contrast to the large state like organizations mentioned above, those lonely wolves are
extremely difficult to detect. If they are smart, they do not discuss their plans with anyone.
Hence, intercepting phones or reaching out with undercover agents does not pose any threat
to them.

Law enforcement, compliance and intelligence weaknesses

The formal expert interviews have also led to a number of conclusions about the current
work of law enforcement and intelligence agencies. Both of them are perceived to be too slow
to effectively combat the financing of terrorism. The challenge is that both law enforcement
and intelligence agencies are bound to bureaucratic structures, which have to be overcome.
Terrorists on the other hand are not bound to such structures and can hence move much
faster.
In addition, law enforcement agencies have been accused of abusing the pretext of fighting
terrorism for looking for tax evaders or money launderers. This is particularly problematic
since private actors tend to be very cooperative when it comes to fighting terrorism.
However, if those private actors gain the impression that the pretext of fighting terrorism is
abused to prosecute far less severe crimes, their cooperation could decrease. In the worst
case, they would then be uncooperative when a real terrorist threat has to be faced. Hence, it
is of utmost importance that the argument of fighting terrorism does not get overused.
In addition, many officers are familiar with the techniques of money laundering but not
with those of financing terrorism. Especially financial services providers have officers
primarily trained for anti-money-laundering purposes. Those officers often look out mostly
for money launderers. Hence, if they are presented with records proving the legitimacy of
the sources of funding, they tend to oversee the signs indicating the financing of terrorism.
Smart financers of terrorism are aware of those biases and hence use sources of income,
which will not raise money-laundering concerns.
The quantitative survey indicates that compliance officers pay particular attention to
electronic risk systems as well as internal and external warnings. However, while
transaction analysis and risks observed by relationship managers and reported to
compliance officers are certainly valuable, financers of terrorism are likely to be aware of
those risk mechanisms. Hence,
In addition, it has been stated by compliance officers that they consider non-financial
sectors as well as jurisdictions with weak regulation to be vulnerable. It could be assumed
that smart terrorists are aware of those perceptions and hence stick to less suspicious
activities. For instance, they could choose a bank transfer to a country with high compliance
standards over an offshore transaction, which would most likely be questioned.
JMLC To make things worse, the current structures still overwhelmingly focus on large
22,4 organizations and do not take lonely wolves into account. This is partly due to the fact that the
knowledge applied is based upon the conclusions of the post 9/11 analysis. As a result, there
seems to be a focus on lists and profiles of suspects. Financers of terrorism are aware of
those patterns and hence make an effort to adjust their profiles accordingly. For instance,
they do not choose men with Arabic last names for bank transfers but rather make use of
790 German or Swiss housewives, who serve as straw people for them. Those straw people are
often not aware of the purposes behind their transactions.

Potential solutions
Most importantly, the knowledge gained from investigations against the financing of
terrorism has to be used for further intelligence efforts. Drying out the sources of funding and
seizing assets are certainly important tasks. However, gathering information about the
plans, which are supposed to be financed, is even more important. Hence, it is important to
accurately gather information and observe financers of terrorists as long as possible.
In this context, secret online remote searches have been advocated by the experts as
effective and efficient means when it comes to combatting both large organizations and
lonely wolves. Single elements of suspicion could be consolidated during such searches.
However, those searches could be abused and are subject to high constitutional burdens.
Undercover agents have also been recommended by the interviewees’. In particular, it
has been suggested that undercover agents should be allowed to commit minor crimes. This is
due to the idea that undercover police agents, who are not allowed to commit crimes, can be
easily identified. After all, criminals could simply test their environment by encouraging
those in their surroundings to engage in minor criminal acts. If anyone objects to
committing such crimes, it is a strong indicator that this person could be an undercover
police officer. Therefore, it is of utmost importance that undercover agents are allowed to
commit crimes.
The countries adjacent to areas controlled by terrorist organizations have to be supported
in their efforts against the financing of terrorism by the international community. Turkey
undoubtedly plays a crucial role for the financing of terrorism. Smart terrorists use Turkish
banks to transfer their assets. However, it would not be fair to simply point with the finger
on Turkey and complain about the opportunities, which can be used by terrorists in this
country. After all, every country adjacent to Syria is at risk for being abused. Turkey is the
most progressive one and is hence most suitable for transactions with Europe. It is therefore
important that the international community does not simply complain about the loopholes
resulting from bank transactions from Germany to Turkey.
In addition, the experts suggested that more severe sanctions would be needed to create
preventive effects. However, it is questionable whether terrorists would fear more severe
sanctions. After all, many of them are willing to die for the causes they believe in. This is
emphasized by the multiple suicide attacks witnessed during the past few years. At the
same time, it is reasonable to assume that not all people, who finance terrorism, are indeed
willing to die.
Professional secrecy is also considered a major obstacle when it comes to combatting the
financing of terrorism. According to the interviewees, people financing terrorism
deliberately hide behind the professional secrecy of lawyers and public notaries. Hence, one
would have to adjust the standards of care for both lawyers and public notaries to those of
financial services providers. However, it is important that the information gained from
lawyers and public notaries would be used exclusively to fight terrorism.
 Increased international cooperation to seize money. One major obstacle to the fight Combatting
against the financing of terrorism is a persistent lack of international cooperation. It often the financing
takes months for administrative and legal assistance among countries to be successful.
Intelligent and well-educated terrorists are aware of those obstacles to law enforcement and
of terrorism
hence transfer their assets among countries to further complicate the prosecution’s efforts.
Increased exchange of information between private enterprises and public law
enforcement or intelligence organizations. This particularly concerns the exchange of
information about typologies of terrorists. However, especially the public sphere seems to be 791
reluctant in this area since it is.

Conclusion
It can be stated that financing terrorism in Austria, Germany, Liechtenstein and Switzerland
is a very feasible task. Terrorists do not have to fear criminal prosecution as long as they
manage to invent plausible explanations for their actions and are able to support them with
either false or original documents. To more effectively fight the financing of terrorism,
responsibility would have to be shifted back from private actors to law enforcement and
intelligence agencies. While private actors, such as banks, can most certainly support a
global effort to fight the financing of terrorism, they cannot be in charge of it.
It is also legitimate to question the usefulness of the current compliance mechanisms.
Financial services providers spend billions of Euros each year on compliance. However, as
emphasized above, transferring assets to finance terrorism is still a very feasible task.
Hence, one could question whether those compliance efforts are worth the money. The
author believes that while those efforts are certainly important, they cannot solve the
problem of global terrorism. Public actors need to be provided with more competencies to be
able to make better use of the information provided by banks and money transfer services.
Law enforcement and intelligence agencies need more rights to be able to effectively combat
the financing of terrorism. It would be fatal to underestimate the skills of terrorists.
Hence, innovative tools, such as secret remote online searches of digital devices, should
be made available in Austria, Germany, Liechtenstein and Switzerland. This would allow
law enforcement officers to verify the information provided by financial services firms
through remote searches of devices. The information gained during this process could then
serve as a foundation for subsequent undercover investigations. However, constitutional
burdens have to be overcome (Hömig, 2009, p. 207; Schantz, 2007, p. 310). After all, both the
integrity of data systems and the privacy of the affected suspects need to be taken into
account (Denkowski, 2008, p. 5 f.; Petri, 2008, p. 443; Posner, 2008, p. 245 f.).
Undercover police agents with more rights would be more difficult to detect. Currently,
police officers in Austria, Germany, Liechtenstein and Switzerland are only allowed to
commit crimes in cases mentioned in the applicable criminal procedural codes. This means
that intelligent criminals can spot undercover police observers by encouraging them to
commit minor crimes not mentioned in the applicable criminal procedural code, such as a
theft or a speed limit violation (Spalek and O’Rawe, 2014, p. 150 f.). If the police officer does
not engage in the aforementioned activity, terrorists can guess that he could be working for
a law enforcement or intelligence agency. On the other hand, it is questionable whether one
may break the law to make sure that others comply with it (Joh, 2009, p. 155). While this is
common practice in the United States, it is not possible in Austria, Germany, Liechtenstein
and Switzerland (Roberts, 2000, p. 263 f.; Ross, 2007, p. 493; Ross, 2008, p. 239 f.).
Currently, financing terrorism Austria, Germany, Liechtenstein and Switzerland is very
feasible. However, combatting the financing of terrorism is by no means a hopeless case. If
the responsibility is shifted back to law enforcement and intelligence agencies and they are
JMLC provided with suitable tools, the financing of terrorism will most likely be combatted.
22,4 However, it should also be noted that the financing of terrorism will never be entirely
eliminated.

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795

Further reading
Gläser, J. and Laudel, G. (2010), Experteninterviews Und Qualitative Inhaltsanalyse: als Instrumente
Rekonstruierender Untersuchungen, VS Verlag für Sozialwissenschaften, Wiesbaden.

Corresponding author
Fabian Maximilian Johannes Teichmann can be contacted at: teichmann@post.harvard.edu

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