How the financing of terrorist activities can be prevented

1 June 2017

The Center for Asymmetric Threats and Terrorism Studies (CATS) at the Swedish Defence University has published a report on the financial activities linked to people from Sweden and Denmark with ties to terrorist groups in Syria and Iraq. The study was commissioned by the Swedish Financial Supervisory Authority with the goal of contributing to better insight and knowledge among anti‐crime authorities, supervisory authorities and national operators subject to the anti-money laundering legislation with regard to foreign terrorist fighters.

"In reality, the Swedish state benefits system is being misused in order to finance trips to terrorist training camps. Today, licensing authorities lack effective insight into the methods and approaches being used to exploit the Swedish system in order to send and receive money and assets to finance terrorist activities," says Magnus Ranstorp, Research Director at the Center for Asymmetric Threats and Terrorism Studies at the Swedish Defense University.

The report is the result of a study on Swedish individuals suspected of having traveled or attempting to travel to conflict areas in Syria and Iraq during 2013-2016 in order to support terrorist groups and their activities. The report mainly focuses on Sweden, but also includes a comparison with Denmark and discusses the Danish context. The purpose of the study has been to identify and illuminate the indicators and signs of this financial activity so that this knowledge can be used to identify conditions and to assess the likelihood of similar activities in the future in attempts to prevent and disrupt them.

Magnus Ranstorp asserts, "An overall national perspective is needed in order to be able to address the challenges of financing terrorism. In addition, a more effective supervision of the Swedish social insurance system needs to be in place so that money is not laundered to areas of conflict."

The study was conducted by the Center for Asymmetric Threat Studies (CATS) with analytical support from the Swedish Defence Research Agency (FOI) and commissioned by the Financial Supervisory Authority. The overall aim is to gain insight and strengthen knowledge among law enforcement agencies, regulatory authorities, and national operators working with anti-money laundering legislation and the issue of foreign fighters. The authors of the report are Magnus Ranstorp, Magnus Normark, and Filip Ahlin.

Key stakeholders from the following Swedish organizations were interviewed for the study: Central Board for Student Financial Support (CSN), Swedish Economic Crime Authority Swedish Financial Supervisory Authority, Swedish Social Insurance Agency, Larmtjänst - Insurance Sweden, Swedish Police (Financial Intelligence Unit and National Operations Department), SwedishTax Agency, and the Swedish Security Service. The Center for Terror Analysis (CTA) and Danmarks Radio as well as investigative journalists from Politiken and Jyllandsposten contributed to the context about Denmark in the study.