Chapter 3 Terrorism

How does the Hawala system, based primarily in Pakistan and India, distribute money?

Dealers honor the receipts they receive from other dealers in the system.

Concerns about the United Nations' _____ include the lack of a uniform definition of terrorism, the lack of applicable national laws, and the lack of due process.

FATF

The term Capone discovery was used by James Adams to refer to the _____.

IRA's involvement in organized crime to fund its operations

One of Hezbollah's main sources of illegal income inside Lebanon is _____.

a protection racket

The three steps of terrorist financing are _____ funds.

acquiring, securing, and disbursing

Hamed Tofangsaz (2015) proposes that terrorist financing develops in distinct phases. These involve, in order, the _____ of funds.

acquiring, securing, disbursing

American _____ are valued throughout the world for their nutritional values and may be stolen and sold to finance terrorist operations.

baby formulas

According to Giraldo and Trinkunas, the economic key to survival for terrorist groups is _____

becoming self-sufficient

Hamed Tofangsaz (2015) believes that terrorists require three types of financing: _____

cash and cash-like entities, tangible goods, and intangibles

Al Qaeda in the Islamic Maghreb (AQIM) became the primary source of income for the al Qaeda network by smuggling _____.

cigarettes

In a 2003 analysis, the Economist characterized terrorism as _____.

cost-effective

Victor Dostov and Pavel Shust (2014) suggest that additional financial support for terrorists may come from the rapidly growing sector of the legitimate economy known as _____.

customer loyalty programs

The fundamental difference between money laundering and terrorist financing is in the _____ of flow in cash, goods, and services.

direction

A terrorist operation usually ____.

does not cost a lot of money, but the overall budget for a campaign is quite high

Terrorist groups may raise money legally through _____.

donations to charities

n Modern Jihad, Loretta Napoleoni argues that the _____ and subsequent globalization led to the new economy of terrorism.

fall of the Soviet Union

Although there is a lack of quantitative data, qualitative data suggest that efforts to disrupt terrorist financial networks _____.

have disrupted several plots

The third step of money laundering, known as ____, involves presenting illegally gained money in the formal economic system as if it were the result of a legal activity.

integration

Money ____ allows criminals to account for their assets without linking the source of the money to the crimes they committed.

laundering

In the second step of money laundering, illegal income is concealed by multiple transactions. What is this process called?

layering

Organizations with hidden links to terrorist groups engage in _____ to give the appearance that funds are being used for a purpose other than supporting terrorism.

layering

In _____, drug profits are used to finance terrorism, or alternatively, drug gangs use terrorism to control production and distribution.

narcoterrorism

An important difference between the finances of organized crime and those of terrorist groups is that _____.

organized crime usually commits the illegal activity prior to getting money rather than afterward

The first step of money laundering, _____, involves deposit of the illegal profits in a legitimate financial stream.

placement

The Brazilian terrorist-philosopher Carlos Marighella argued that "urban warfare" begins with a campaign of _____.

robbery

A political situation in which a government nominally controls its own state, but where large regions are either anarchic or under the control of others, is called a _____ state.

shell

Hezbollah ____ from North Carolina to Michigan to help fund operations in Lebanon.

smuggled cigarettes

One of the first nations to establish legislation related to the financing of terrorism was ____

the United Kingdom

Traditional financial investigations are not effective against terrorists because ____.

the amount of money involved is small

According to Rachel Ehrenfeld, _____ is one of the primary sources of income for terrorist groups.

the narcotics trade