Terrorist and extremist organizations depend on finances to plan, prepare, and execute their activities. This is particularly the case when this relates to a hierarchically organized, geographically dispersed group that undertakes a range of activities and operations. Therefore, disruption of such an entity’s financial income streams concentrates on a bottleneck that presents a weakness which can exploited to hinder its activities and mitigate risks emanating from them. This requires a particular set of legal instruments and administrative structures that enable transparency and early detection if funds are used for malign purposes. Despite this being an obvious truism, there is a regular issue of terrorism financing, as well as the financing of violent extremism and extremism, not being addressed as a priority, but rather a sideline of investigations focusing on individual culpability for violent acts or wider operational activities.
Furthermore, it is of course important to tailor executive instruments designed to mitigate such risks according to the nature of the threat to safeguard against undue infringement of fundamental rights. However, if such safeguards are combined with a significant lack of overall financial transparency and a wide distribution of relevant data, the balance begins to tip significantly in favor of potential perpetrators and shielding their financial activities from necessary scrutiny. Consequently, a potential rebalancing should be contemplated.
An illustrative example in this regard is the current structure design to combat terrorism financing and mitigate risks of violent extremism and extremism in Germany, which will be the focus of this report.
German efforts to mitigate these risks are currently encountering challenges in three distinct areas. First, the legal basis on which executive action in Germany is based has several safeguards build in that complicate investigative work. To pursue terrorism financing charges, an evidentiary link needs to be established between the specific funds in question and specific terrorist actions. Given that funds transferred to support terrorist activities are rarely clearly earmarked for a particular operation, this is a significant hurdle and likely explains the relatively low success rate of terrorism financing prosecutions in Germany. A mechanism comparable to the U.S. clause of “material support” that would allow the prosecution of funds sent for general support of a terrorist group does not exist in Germany.
Furthermore, while violent extremism and extremism are not concepts enshrined in German criminal law, administrative practice defined in laws that govern German domestic intelligence authorities allow for intelligence gathering and analysis concerning individuals, associations, groups, networks, and organizations that are judged to be working actively to undermine the basic tenets of the democratic system in Germany. This is an advantage for German security authorities. In many other democratic systems, only a binary choice is possible: executive action is only allowed if individuals, associations, groups, networks, or organizations are officially classified as terrorist. However, as far as investigations into the financial activities of such extremist phenomena are concerned, the German mechanism distinguishes between violent and non-violent extremist tendencies. Structural investigations into the financial activities are only possible in cases of violent extremism. This means that although individuals, associations, groups, networks or organizations are judged as actively undermining the democratic order, as long as they are unconnected to violence, their financial activities are largely protected. A restructuring of these legal mechanism could significantly increase investigative and prosecutorial opportunities.
The second challenge encountered in Germany relates to existing gaps in financial transparency, in particular as far as associations and non-profit entities are concerned. A difference with other countries, such as for example the United Kingdom or the United States, is that such organizations do not have to publicly disclose their financial structures, income, or spending flows. Furthermore, due to the current administrative structures governing the non-government sector in Germany, data relating to such organizations is geographically dispersed and housed in several registries. With a new central registry, the German government plans to rectify this from 2024 onwards.
The third challenge pertains to questions of capacity, coordination, and investigative priorities. Investigative capabilities within German security authorities tends to be a centralized function that is also responsible for investigating large-scale financial crimes. While extremist and violent extremist activities are dealt with through structures targeting so-called “politically motivated” crimes. Given that the malign financial activities of organized criminal groups are generally larger in scale, this presents a challenge for the allocation of investigative resources.
The near total absence of publicly available detailed information concerning the financial activities of Muslim Brotherhood networks in Germany is an illustrative example of these challenges. Mirroring their operations in other countries, the Muslim Brotherhood does not act openly in Germany and its members usually deny any connections to the global network, even if such connections are obvious. German security authorities classify these networks are “legalistic Islamism” to indicate that, while the underlying ideology clearly attempts to subvert the basic democratic and pluralist structure in Germany, its proponents are careful not to propagate violence or openly violate German law. This, in combination with the outlined challenges concerning financial transparency and investigative prioritization, means that structural investigations into the financial operations, including foreign funding of Muslim Brotherhood networks in Germany, are currently nearly impossible.
Therefore, this report presents a range of policy recommendations aimed at increasing the effectiveness of risk mitigation measures.
European Eye on Radicalization aims to publish a diversity of perspectives and as such does not endorse the opinions expressed by contributors. The views expressed in this article represent the author alone.
