Financing of Combatants in Asymmetric Conflicts

14 Pages Posted: 26 Oct 2017 Last revised: 25 Nov 2021

See all articles by Stephan Breu

Stephan Breu

Johann Heinrich Pestalozzi Christian University Inc.; Kutafin Moscow State Law University; Universidad Complutense de Madrid - Grupo CONCILIUM; Faculdade Interativa de São Paulo - FAISP; Faculdade do Bico do Papagaio - FABIC; Swiss Centre for International Humanitarian Law; Legal Forum Cannes

Date Written: October 18, 2017

Abstract

Identifying the flow of financing of asymmetric combatants especially in fourth-generation warfare proves to be very demanding. Whereas "traditional" banking channels might be possible to control to a certain extent (i.e. SWIFT transfers), fund transfers through charitable organisations or state sponsoring of terrorism are much more difficult to monitor. Knowing the potential for law-enforcement and intelligence agencies to monitor SWIFT activities and other electronic means of transfer, other parallel remittance systems (Hawala) have taken a much more important role in financing combatants in asymmetric conflicts. In future the anonymity and minimal documentation of such transfers will be even surpassed by the possible use of cryptocurrencies.

The financing systems of combatants in asymmetric confilcts demonstrates a flexible and adaptive approach. But as all these channels are mostly used for legal transfers between legitimate partners, any heavy regime of new regulations would make all transactions costlier and less convenient. Such negative economic impact is opposing the need of monitoring the financing of asymmetric opponent groups. To solve this situation, the focus should lie on the attempts to make the risk of detection of such transfers higher for the parties involved. Without interfering too strongly with the financing channels, this process asks for improved compliance and cooperation on all levels and capacity. With the increasing importance of cryptocurrencies, a completely new field of complex problems is arising through the implied anonymity and complexity or sheer impossibility to track transfers in the dark net. As regulations in this new financial market will be difficult to enforce, it is necessary to establish international cooperation and capacity building to implement some possibilities for law-enforcement and intelligence entities to monitor the illegal flows of capital.

Keywords: financing, regulations, compliance, hawala, cryptocurrencies

Suggested Citation

Breu, Stephan, Financing of Combatants in Asymmetric Conflicts (October 18, 2017). Available at SSRN: https://ssrn.com/abstract=3058971 or http://dx.doi.org/10.2139/ssrn.3058971

Stephan Breu (Contact Author)

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