Tackling Terrorist Financing: Decoding the EU Terrorism Situation and Trend Report

"In today’s changing world, terrorist actors are continuously adapting their narratives, outreach and activities in response to the most recent geopolitical and socioeconomic developments. Equally concerning is the use of AI and other technology by terrorist groups to strengthen their messages and facilitate their operations." Executive Director of Europol, Catherine De Bolle

The fight against terrorist financing is critical to global security, demanding constant vigilance and adaptability. As terrorist groups continue to refine and evolve their methods, leveraging new technologies and diverse funding streams to sustain their activities, understanding these trends and deploying innovative and collaborative counter terrorism (financing) solutions remain vital.

Europol’s latest TE-SAT report underscores the dynamic and evolving landscape of terrorism within the EU and its underlying financing, with some of the standout findings including:

• Technology amplifies threats across the spectrum - Terrorists and violent extremists have the capability to strategically integrate the most recent developments in digital technology, including AI, to spread propaganda, recruit, plan attacks and evade detection by law enforcement and financial services’ organizations alike. LLMs and deepfakes are being exploited to create false identities, spread disinformation and bolter propaganda campaigns

• Jihadist Terrorism - Jihadist terrorism is a key security concern for the EU. In 2023, it had the most harmful direct impact on victims. Events both in the EU and beyond exacerbated the threat to the EU and provided a fertile ground for propaganda and radicalization. The jihadist threat stems from a fragmented landscape of foreign terrorist groups, online networks and individual actors

• Far-Right Terrorism - In the right-wing terrorist context, lone actors or small groups, often motivated by accelerationist ideas, pose the highest threat. Young right-wing terrorists and violent extremists are taking up a more active role as creators of propaganda, recruiters and organizers of attacks and active incitement. New right-wing violent extremist groups are emerging online and seeking to act in real life.

• Far-Left and Anarchist terrorism - Left-wing and anarchist terrorist and violent extremist groups continued to coalesce around anti-state, anti-capitalism, anti-fascism, anti-racism, anti-militarism and climate related narratives. Solidarity with imprisoned anarchists remained a strong catalyst for violent acts in a number of countries.

Quantifying terrorism in the EU in 2023

A total of 120 terrorist attacks (98 completed, 9 failed and 13 foiled) were carried out in 7 EU Member States in 2023, an increase compared to previous years. The highest number of terrorist attacks were perpetrated by separatist terrorists (70, all completed), followed by left-wing and anarchist actors (32, of which 23 completed). There were 14 jihadist terrorist attacks of which 5 completed. Two right-wing terrorist attacks were foiled.

Financing trends in terrorism and extremism

As outlined in the latest report, terrorist organizations and violent extremist groups continue to employ a diverse range of techniques to raise funds for their activities. Some of the notable trends include:

• Membership fees and donations - Membership fees and voluntary donations remain significant sources of funding across various groups, including jihadist and far-right organizations. These funds often support day-to-day operations, propaganda production, and recruitment efforts

• Crowdfunding and cryptocurrencies - Extremists increasingly turn to crowdfunding platforms and cryptocurrencies to anonymously collect funds. These methods are particularly effective for both small-scale donations and larger international transfers

• Sale of publications and merchandise - Both far-right and left-wing extremist groups generate income through the sale of propaganda materials, books, and goods featuring ideologically aligned designs. Such merchandise not only raises funds but also spreads their messaging.

• Events and social activities - Charity events, concerts, sports tournaments, and other social gatherings are often leveraged to raise money while building community support

• Fraudulent activities - Techniques such as subsidy fraud, benefit fraud, and small-scale scams are increasingly used to generate funding without drawing attention

• Criminal enterprises - Drug-related crimes, property crimes, and weapons trafficking continue to provide significant financial resources for terrorist groups. These activities often intersect with broader organized crime networks

• Funding legal and operational support - Funds are frequently allocated to provide legal aid to affiliates during criminal proceedings or while serving prison sentences. They are also used to finance travel, demonstrations, and other operational activities

• Diaspora and family transfers - Financial support from diaspora communities and family members, particularly in the EU, is often funneled to jihadist affiliates in high-risk regions, such as camps in northeastern Syria. These transfers often exploit legitimate financial channels

• Links between terrorism and organised crime – This connection continued to be noted, particularly in jihadist and extreme right-wing groups with regards to funding, transit/trafficking routes, weapons and services including the outsourcing of violent acts.

Decision Intelligence to Counter Terrorist Financing (CTF)

At Quantexa, with years of experience in tackling areas such as CTF, our combination of advanced decision intelligence technology and human expertise empowers organizations to better detect and disrupt terrorist financing networks. Here’s just a few examples of how:

1. Decision Intelligence (DI) for financial ecosystems - By resolving multiple internal intelligence data sets, such as financial transactions, with external data such as corporate registry records, travel records, customs reports, NGO filings or KYC records for FSIs, Quantexa’s platform builds a granular, contextual view of entities involved in suspected terrorist financing

2. Network analysis of fund flows - Terrorist financing networks often rely on multiple intermediaries and cross country/cross channels/cross product routes to obscure fund origins and ultimate beneficiaries. Quantexa’s extensive graph capabilities enables users to uncover a variety of factors including layered relationships between donors, shell entities, and ultimate beneficiaries. For example, identifying connections between a local charity and individuals flagged on international sanctions lists or tracking fund flows and “value” through 3rd party neighboring countries in attempts to circumvent high-risk country/jurisdiction controls

3. Cryptocurrency and crowdfunding monitoring - With terrorist groups increasingly using digital currencies and online crowdfunding platforms, Quantexa’s DI capabilities can help track suspicious cryptocurrency wallet activities and highlight anomalies in areas such as crowdfunding campaigns. This includes detecting sudden spikes in donations that align with known extremist events

4. Entity resolution to counter alias use: Terrorist financiers frequently operate under aliases or through proxy entities to mask their identities and avoid detection. Quantexa’s world-leading entity resolution technology excels at consolidating fragmented data, across banks, jurisdictions and datasets, into single unified profiles of individuals or organizations. For example, if a single individual uses multiple names, addresses, or identification numbers across different institutions, Quantexa’s platform will connect and analyze these records through contextual analytics

5. Enhanced collaboration with regulators - Quantexa’s solutions facilitate seamless data sharing and reporting, ensuring financial institutions can align with international AML and CFT frameworks while expediting regulatory compliance processes.

CTF remains a shared responsibility

Technology is clearly only part of the solution. Effective collaboration amongst financial institutions, regulators, and technology providers is essential. As financial ecosystems evolve, so too must our strategies for combating terrorist financing. At Quantexa, our mission is to empower organizations with the tools and insights needed to make better decisions. Each uncovered terrorist network, disrupted transaction, and dismantled operation is a step toward a safer global financial system and society.

The fight against terrorist financing is a shared endeavor. Whether you’re in compliance, technology, regulation or law enforcement, your perspectives are invaluable. Together, we can strengthen financial systems and outpace adversaries.

Read the full 2024 TE-SAT report here - 👉 https - //lnkd.in/dEyjcdBs

If you would like to discuss how Quantexa can help uplift and future proof your counter terrorist financing or programme, contact us.

Reference - Europol (2024), European Union Terrorism Situation and Trend Report, Publications Office of the European Union, Luxembourg.