Footnotes (227)



Funding Terror

Shima Baradaran Baughman

University of Utah - S.J. Quinney College of Law

Michael Findley

University of Texas at Austin

Daniel Nielson

Brigham Young University

J. C. Sharman

Griffith University

February 2014

University of Pennsylvania Law Review, Forthcoming

The events of September 11 forever changed the political and legal response to terrorism. After more than ten years, two wars, several targeted military strikes, and significantly increased surveillance, we still have not succeeded in stopping the growth of Al-Qaeda and other terrorist organizations. The war on terror has not just been a military one. To stop terrorism, it is imperative to cut off the flow of terrorism financing. To this end, a number of nations have created financial laws that prohibit the formation of anonymous companies and monitor suspicious bank transfers. These laws have been touted as evidence that we are winning the war on terrorism. This Article questions their efficacy. In particular, this Article proves how easy it is to form a terrorist finance network and exploits the impotence of both international and domestic financial regulations that have been passed in this area. The Article presents findings from the largest global randomized controlled trial to date. In our experiment, we acted as customers seeking to form anonymous shell companies in a variety of scenarios resulting in either greater risk or greater reward. On the whole, forming an anonymous shell company is as easy as ever, despite increased regulations following 9/11. The results are disconcerting and demonstrate that we are much too far from a world that is safe from terror.

Number of Pages in PDF File: 60

Keywords: terrorism, war on terror, terrorism financing, shell company, anonymous, randomized controlled trial, money laundering, corruption, charity, FATF, UNOTC

JEL Classification: K33, C93, F23, G15

Open PDF in Browser Download This Paper

Date posted: March 11, 2013 ; Last revised: March 25, 2014

Suggested Citation

Baughman, Shima Baradaran and Findley, Michael and Nielson, Daniel and Sharman, J. C., Funding Terror (February 2014). University of Pennsylvania Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2231344

Contact Information

Shima Baradaran Baughman (Contact Author)
University of Utah - S.J. Quinney College of Law ( email )
383 S. University Street
Salt Lake City, UT 84112-0730
United States

Michael Findley
University of Texas at Austin ( email )
Austin, TX 78712
United States

Daniel Nielson
Brigham Young University ( email )
Provo, UT 84602
United States
J.C. Sharman
Griffith University
170 Kessels Road
Nathan, Queensland QLD 4111
Feedback to SSRN

Paper statistics
Abstract Views: 3,707
Downloads: 471
Download Rank: 46,197
Footnotes:  227