Terror on the Cheap: Financing Lone Actor and Small Cell Attacks

As recent reports highlight the increasing risk of Daesh-inspired lone actor or small cell homeland terrorist attacks, an urgent recalibration of terrorist-finance disruption efforts is required to include both funds flowing to Syria/Iraq and those raised to be used at home.

A brief review of terrorist finance-related reporting over the past twelve months reveals a series of consistent themes. Daesh, or ISIL (ISIS), according to former US Defense Secretary Chuck Hagel, ‘is as sophisticated and well-funded as any group that we have seen…They are tremendously well-funded’; NGOs are ‘particularly vulnerable to terrorist [financing] abuse’ and ‘charitable fundraising has…been used to provide cover for the financing of terrorism’ the nature of money service businesses and remittance transfers makes this informal sector of the financial system a potential conduit for terrorist financing; and, cross-border cash couriers provide a hard-to-trace means of moving cash in support of terrorist groups.

As a result, the focus on terrorist financing has become myopic and concentrates almost exclusively on disrupting funds seeking to move to Syria/Iraq to add to the hundreds of millions of dollars believed to have been amassed there already by Daesh. With the vast majority of the group’s funds being generated via its control of territory and population, there is limited direct disruptive action that the international community can take. Despite the year-long bombing campaign, the current assessment of the US Treasury is that ‘ISIL has plenty of money.’

Responding to the Call at Home

Current counter-terror finance activity presupposes, in the main, that the terrorist finance threat that requires disrupting is somewhere else, somewhere to which funds must be sent, yet the true terrorist finance risk currently lies much closer to home. 

As a growing catalogue of evidence suggests, so-called ‘lone actors’ or ‘small cells’ are responding to the calls from Daesh, seeking to perpetrate acts of violence in their homelands. In September 2014 Daesh  spokesman Abu Mohammed al-Adnani threatened citizens of all countries involved in attacking the group, encouraging Muslims living in these countries to kill ‘disbelievers…in any manner or way however it may be’, warning Western citizens that they ‘…will not feel secure even in [their] bedrooms’ and that they ‘…will pay the price when this crusade…collapses.’ 

The fourth issue of Daesh’s Dabiq magazine urged Muslims to ‘[r]ush to support your state’, exhorting that ‘it is very important that attacks take place in every country that has entered into the alliance against Islamic State…’ and that ‘…the citizens of crusader nations should be targeted wherever they can be found’. A Muslim, Dabiq claims, ‘should be pleased to meet his Lord even if with just one dead kafir’s name written on his scroll of deeds’ and should thus ‘get out of his house, find a crusader, and kill him’ attributing his actions to Islamic State(1). The financing of small scale yet high impact attacks in Western capitals or on soft targets where ‘kafirs’ congregate (such as Tunisian beach resorts) deserves a level of commitment comparable to the international community’s dedication to the disruption of the financing of ISIL itself.

A Handout to Those Planning Attacks

Whilst moving money across borders to Daesh from countries in Europe has become increasingly challenging, raising small amounts of legitimate funding for homeland attacks remains frighteningly easy.  Consider popular consumer funding tools such as payday and student loans. Students in the UK can receive loans of up to £8,000 per year directly into their bank accounts to help with living costs (tuition loans are paid to the relevant university). Payday loans can offer borrowers up to £2,500 with the cash deposited in the borrower’s bank account within fifteen minutes. For those planning terrorist attacks, the high interest rates on such products are of no consequence. These sums may seem small, but individual attacks are ‘cheap’ to fund –the 7/7 bombings in London are estimated to have cost less than £8,000, including trips overseas in preparation. Indeed research studying planned attacks by European jihadis over the past twenty years (1994-2013) reveal that 75 per cent cost less than US$10,000, with the ‘usual suspects’ of NGOs and remittance transfers playing almost no role.

The potential use of such tools for financing terrorist attacks is not fantasy. In 2012, a court in London heard that a group accused of planning a suicide terrorist attack tried to fund its operations from sources including a payday lender and the UK’s Metropolitan Police have highlighted ‘a number of cases’ of fraudulent student loan applications being made by terrorists. In the US in May this year, two Somali-Americans from Minnesota faced charges for allegedly using their college loans to buy airline tickets for flights to join Islamic extremist groups in the Middle East. Although politicians have expressed outrage it would seem little has been done to tighten what is, in effect, a handout to those planning terrorist attacks at home.

Of course for the student loan company or payday lender, identifying what funds are being spent on is beyond their responsibility. But perhaps consideration should be given to placing restrictions on the way borrowed funds are spent. For example funds could be provided via prepaid cards with restrictions attached that allow them only to be used in certain shops, to pay for pre-agreed services, or settle registered bills.

The traditional measures in place for tackling terrorist financing play little role in disrupting this rapidly emerging form of low budget terror. The financial means those planning domestic attacks might draw on exploit a different model altogether, a model that freely provides small amounts of funding ideal for the limited costs associated with lone actor or small cell attacks.




1. Dabiq Magazine Issue 4 p44


Tom Keatinge

Director, CFCS

Centre for Financial Crime and Security Studies

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