C data flows and funds flows finance for terrorism

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c. Data Flows and Funds Flows: Finance for Terrorism and the Financial Action Task Force Model There is only a rough analogy between financing for terrorism, which plays an infrastructural role in terrorism, and cyberterrorism, in which cyberspace can be both the tool and the target of terrorism. The analogy is further challenged because money is a creation (at least in the final analysis) of governments. Furthermore, the less direct creators of money tend to be large financial institutions which, although they may be co- opted for terrorism, are subject to greater scrutiny and safeguards. However, we might analogize large banks to ISPs or backbone providers. We might also understand the financial system as analogous insofar as its destruction would have substantial effects in the real economy, and insofar as money can be a tool of real world terrorism, just as cyberspace can be a tool of real world terrorism. It is therefore worthwhile to review in general terms the structure that has developed thus far to address the problem of international financing for terrorism. The problem of financing for terrorism may be seen as a lower-stakes version of some aspects of the cyberterrorism problem. That is, a failure of the system would not directly result in a “Pearl Harbor.” Yet, wide international participation is necessary to prevent particular states emerging as terrorist financing havens. And the Financial Action Task Force (FATF) 54 mechanism is built around information-sharing and surveillance. 55 This operates at two levels. First, each country is required to obtain information from and perform surveillance in connection with its private sector actors, including financial institutions and their customers. Second, it provides for countries’ systems to be monitored and evaluated with respect to compliance with international 54 The FATF describes itself as “an inter-governmental body whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering and terrorist financing. The Task Force is therefore a ‘policy- making body’ which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.” . As of February 2, 2004, the FATF had 33 members, but its standards are endorsed by more than 130 countries. The FATF is housed at the offices of the OECD in Paris, but is an independent organization. 55 See Financial Action Task Force on Money Laundering, The Forty Recommendations , 20 June 2003, available at [hereinafter, the “Recommendations”].
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Global Cyberterrorism, Jurisdiction, and International Organization 32 standards. The latter is achieved through mutual evaluations performed by regional bodies, as well as IMF and World Bank assessments of compliance.
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