This week’s readings focus on transnational and domestic terrorism.    Rollins and Wyler write about the connections between terrorist groups and criminal groups in the US, and some of the tactics they use.    Elliott traces the radicalization of Omar Hammami, a kid from Alabama who rose to power in Shabab, an Islamic terrorist group in Somalia.   Finally, we look at the “hate map” put out by the SPLC, which lets you see where various groups are located in the US.    

After reviewing all three sources, share some thoughts on what all this means with regard to the potential for domestic terrorism in the US.   Some of you are looking at the financing of terrorism in your research papers.  Rollins & Wyler look at the methods of financing of terrorist groups through links with criminal groups in the US.   Based on the DHS website, how is this type of threat being addressed by the Department of Homeland Security?    Given what has been happening in the US since the time these articles were written, should we expect to see more radicalization of American youth?   How can this be countered by DHS?   Are there other means of stopping the connections between terrorists and criminals, and the radicalization of Americans, through other means.   Some of you are looking at the legal means already in place as part of your research topics.   Are there legal means to help address these threats?

CRSReport for Congress
Prepared for Members and Committees of Congress

Terrorism and Transnational Crime:
Foreign Policy Issues for Congress

John Rollins
Specialist in Terrorism and National Security

Liana Sun Wyler
Analyst in International Crime and Narcotics

June 11, 2013

Congressional Research Service

7-5700
www.crs.gov

R41004

The report Terrorism and Transnational Crime: Foreign Policy Issues for
Congress comprises public domain material from the Congressional Research Service.

UMGC has modified this work.

http://www.fas.org/sgp/crs/terror/R41004

Terrorism and Transnational Crime: Foreign Policy Issues for Congress

Congressional Research Service

Summary
This report provides an overview of transnational security issues related to patterns of interaction
among international terrorist and crime groups. In addition, the report discusses the U.S.
government’s perception of and response to the threat. It concludes with an analysis of foreign
policy options.

In recent years, the U.S. government has asserted that terrorism, insurgency, and crime interact in
varied and significant ways, to the detriment of U.S. national security interests. Although
unclassified anecdotal evidence largely serves as the basis for the current understanding of
criminal-terrorist connections, observers often focus on several common patterns.

• Partnership Motivations and Disincentives: Collaboration can serve as a force
multiplier for both criminal and terrorist groups, as well as a strategic weakness.
Conditions that may affect the likelihood of confluence include demand for
special skills unavailable within an organization, greed, opportunity for and
proclivity toward joint ventures, and changes in ideological motivations.

• Appropriation of Tactics: Although ideologies and motivations of an
organization may remain consistent, criminals and terrorists have shared similar
tactics to reach their separate operational objectives. Such tactics include acts of
violence; involvement in criminal activity for profit; money laundering;
undetected cross-border movements; illegal weapons acquisition; and
exploitation of corrupt government officials.

• Organizational Evolution and Variation: A criminal group may transform over
time to adopt political goals and ideological motivations. Conversely, terrorist
groups may shift toward criminality. For some terrorist groups, criminal activity
remains secondary to ideological ambitions. For others, profit-making may
surpass political aspirations as the dominant operating rationale. Frequently cited
terrorist organizations involved in criminal activity include Abu Sayyaf Group
(ASG), Al Qaeda’s affiliates, D-Company, Kurdistan Worker’s Party (PKK),
Revolutionary Armed Forces of Colombia (FARC), Haqqani Network, and
Hezbollah.

To combat these apparent criminal-terrorist connections, Congress has maintained a role in
formulating U.S. policy responses. Moreover, recent Administrations have issued several strategic
documents to guide U.S. national security, counterterrorism, anti-crime, and intelligence
activities. In July 2011, for example, the Obama Administration issued the Strategy to Combat
Transnational Organized Crime, which emphasized, among other issues, the confluence of crime
and terrorism as a major factor in threatening the U.S. global security interests.

While the U.S. government has maintained substantial long-standing efforts to combat terrorism
and transnational crime separately, Congress has been challenged to evaluate whether the existing
array of authorities, programs, and resources sufficiently responds to the combined crime-
terrorism threat. Common foreign policy options have centered on diplomacy, foreign assistance,
financial actions, intelligence, military action, and investigations. At issue for Congress is how to
conceptualize this complex crime-terrorism phenomenon and oversee the implementation of
cross-cutting activities that span geographic regions, functional disciplines, and a multitude of
policy tools that are largely dependent on effective interagency coordination and international
cooperation.

Terrorism and Transnational Crime: Foreign Policy Issues for Congress

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Contents
Introduction …………………………………………………………………………………………………………………….. 1

Perceived Threat ………………………………………………………………………………………………………… 2
U.S. Government Strategies ………………………………………………………………………………………… 4

Patterns in Crime-Terrorism Interaction ……………………………………………………………………………… 6
Partnership Motivations and Disincentives ……………………………………………………………………. 6
Appropriation of Tactics ……………………………………………………………………………………………… 7

Violence for Political Effect …………………………………………………………………………………… 8
Crime-for-Profit …………………………………………………………………………………………………. 10
Illicit Support Activity …………………………………………………………………………………………. 12

Organizational Evolution and Variation ………………………………………………………………………. 16
Abu Sayyaf Group (ASG) ……………………………………………………………………………………. 17
Al Qaeda’s Affiliates …………………………………………………………………………………………… 17
D-Company ……………………………………………………………………………………………………….. 18
Kurdistan Worker’s Party (PKK) ………………………………………………………………………….. 18
Revolutionary Armed Forces of Colombia (FARC) …………………………………………………. 19
Haqqani Network ……………………………………………………………………………………………….. 20
Hezbollah ………………………………………………………………………………………………………….. 20

Foreign Policy Responses ……………………………………………………………………………………………….. 21
Diplomacy ………………………………………………………………………………………………………………. 21
Foreign Assistance ……………………………………………………………………………………………………. 23
Financial Actions ……………………………………………………………………………………………………… 24
Intelligence ……………………………………………………………………………………………………………… 25
Military Actions ……………………………………………………………………………………………………….. 25
Investigations …………………………………………………………………………………………………………… 26

Looking Ahead: Implications for Congress ……………………………………………………………………….. 27

Tables
Table A-1. Foreign Terrorist Organization (FTOs): Reported Sources of External Aid ……………. 30

Appendixes
Appendix. Terrorist Links to Criminal Financing ……………………………………………………………….. 30

Contacts
Author Contact Information…………………………………………………………………………………………….. 35
Acknowledgments …………………………………………………………………………………………………………. 35

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Introduction
Transnational terrorists and criminals may collaborate, appropriate shared tactics, and otherwise
benefit from interaction, resulting in bolstered capabilities, enhanced organizational
infrastructure, improved access to resources, and expanded geographic reach. Historical examples
also indicate that terrorist and transnational criminal groups may evolve, converge, transform, or
otherwise alter their ideological motivations and organizational composition to appear similar.
Although information on the extent and nature of criminal-terrorist relationships, including their
impact on U.S. national security, remains anecdotal, many view the potential confluence of
criminal and terrorist actors, skills, resources, and violent tactics as a cause for concern.1 Such
enhancements may in turn lengthen the duration of insurgencies, extend the longevity and
capabilities of criminal and terrorist organizations, and undermine the ability of fragile
governments to exert full control of their territory.

Some analysts have identified a series of potentially disturbing patterns that has hastened the
expansion of relationships between terrorist and transnational crime groups. First, criminal
syndicates appear to be growing in size, scope, and ambition. Globalization has extended their
transnational reach, while major developments in technology, trade, and the financial industry
have provided them with opportunities to exploit vulnerabilities in emerging criminal sectors,
such as cybercrime. Many now maintain a transnational footprint and a flexible and networked
membership roster that can adapt more readily to new market niches and establish more fluid
alliances with external individuals and groups.

Second, the nature and activities of terrorist organizations appear to have also changed. Terrorist
groups today, particularly those that most threaten U.S. global interests, appear to be motivated
primarily by religious rather than nationalist and ethnic separatist imperatives that were common
in the 1960s and 1970s. This shift has resulted in extremist movements that elicit sympathy well
beyond a specific country or geographic region.2 Further, terrorist groups appear to have become
more resilient, due to a combination of continued state sponsorship or support, as well as
entrepreneurial expansion into profitable criminal activities.

Combined, these trends may suggest an increase in geographic overlap where criminals and
terrorists could operate and interact. These patterns may also suggest greater blurring of
distinctions between one group and the other, the adoption of activities often attributed to the
other, or the ad hoc evolution of a group’s objectives based on the security challenges they
encounter.3 Key nodes, where interaction is most likely, include prisons; cyberspace, particularly
online opportunities for social networking; and ungoverned or difficult-to-govern spaces, which

1 This report is based on unclassified interviews and open sources. While the focus of this report is on threats to U.S.
security interests manifested from terrorist organization-international organized crime syndicate partnering
arrangements, it is important to note that the issue has garnered the attention of the wider international security
community.
2 See for example Bruce Hoffman, Inside Terrorism (New York: Columbia University Press, 2006).
3 An action pursued with one set of motivations can evolve into a different scenario based on the challenges the terrorist
or criminal actors encounter and the response of the host government and global security community. Some suggest
that one example of such a transformation was the January 2013 attack on Algeria’s In-Amenas oil facility, where a
kidnapping for ransom plot transformed into a hostage situation involving violence-based terrorist tactics. Notably, the
attack was reportedly masterminded by Moktar Belmoktar, an illicit actor with longstanding ties to both Islamist groups
and organized crime.

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include regions plagued by endemic corruption, conflict or post-conflict zones where legitimate
governance has yet to take root, border regions, free trade zones, and urban mega cities where
pockets of poverty, violence, criminality, and impunity from national law prevails. Overlap may
also be facilitated by the involvement of negligent or hostile governments and kleptocratic or
criminal states that may consider sponsorship or support of criminal or terrorist activity of
strategic value.

Perceived Threat
The U.S. government has asserted that terrorism, insurgency, and crime interact in varied and
significant ways, to the detriment of U.S. national security interests. In January 2012, the Director
of National Intelligence (DNI) reported to Congress that transnational organized crime and its
links to international terrorism was among the nation’s most pressing national security concerns,
specifically identifying the following areas of concern for crime-terrorism interaction:

• Nuclear proliferation: “We are aware of the potential for criminal service
providers to play an important role in proliferating nuclear-applicable materials
and facilitating terrorism.”

• Kidnapping for ransom: “Kidnapping for ransom is increasing in many regions
worldwide and generates new and deep income streams for transnational criminal
networks … and terrorist networks.”

• Human smuggling: “Those who smuggle humans illegally have access to
sophisticated, forged travel papers and the ability to constantly change their
smuggling routes—routes that may span multiple continents before reaching their
destinations. Smugglers undermine state sovereignty and sometimes facilitate the
terrorist threat.”

• Illicit finance: “Terrorists and insurgents will increasingly turn to crime and
criminal networks for funding and logistics, in part because of U.S. and Western
success in attacking other sources of funding. Criminal connections and activities
of both Hizballah and AQIM [Al Qaeda in the Islamic Maghreb] illustrate this
trend.”4

DNI James R. Clapper’s testimony to Congress in 2012 reiterated the findings of the U.S.
intelligence community’s 2010 review of threats posed by transnational organized crime. In that
review, the first of its kind in 15 years, the intelligence community ultimately concluded that such
illicit networks have “dramatically” increased in size, scope, and influence internationally. A
public summary of the assessment identified a “threatening crime-terror nexus” as one of five key
threats to U.S. national security:

Terrorists and insurgents increasingly will turn to crime to generate funding and will acquire
logistical support from criminals, in part because of successes by U.S. agencies and partner
nations in attacking other sources of their funding. In some instances, terrorists and
insurgents prefer to conduct criminal activities themselves; when they cannot do so, they turn
to outside individuals and facilitators. Proceeds from the drug trade are critical to the

4 Prepared testimony of Director of National Intelligence (DNI) James R. Clapper, in U.S. Congress, Senate Select
Committee on Intelligence, Current and Projected National Security Threats to the United States, S.Hrg. 112-481,
112th Cong., 2nd sess., January 31, 2012 (Washington, D.C.: U.S. Government Printing Office, 2012).

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continued funding of such terrorist groups as the Taliban and the Revolutionary Armed
Forces of Colombia (FARC). Terrorist organizations such as al-Shabaab and drug trafficking
organizations such as the cartels based in Mexico are turning to criminal activities such as
kidnapping for ransom to generate funding to continue their operations. Some criminals
could have the capability to provide weapons of mass destruction (WMD) material to other
terrorist groups, such as Hizballah and al-Qaida in the Islamic Maghreb, though the strength
of these drug links and support remain unclear. U.S. intelligence, law enforcement, and
military services have reported that more than 40 foreign terrorist organizations have links to
the drug trade. Some criminal organizations have adopted extreme and widespread violence
in an overt effort to intimidate governments at various levels.5

DNI Clapper’s testimony to Congress in 2013 additionally noted that the U.S. intelligence
community is “monitoring the expanding scope and diversity of ‘facilitation networks,’ which
include semi-legitimate travel experts, attorneys, and other types of professionals, as well as
corrupt officials, who provide support services to criminal and terrorist groups.”6

Other U.S. government documents characterize the confluence of transnational organized crime
and international terrorism as a growing phenomenon. Whereas in previous decades criminal and
terrorism links occasionally occurred, such connections appear to be taking place with greater
frequency today and may be evolving into more of a matter of practice rather than convenience.
According to the U.S. Department of Justice (DOJ), recent investigations suggest that
international organized criminals are willing to provide logistical and other support to terrorists.7
According to the U.S. Drug Enforcement Administration (DEA), 19 of 49 (39%) State
Department-designated foreign terrorist organizations (FTOs) have “confirmed links to the drug
trade” as of November 2011.8 In 2003, DEA reported that 14 of 36 (39%) FTOs were involved
“to some degree” in illicit narcotics activity.9 For FY2010, DOJ reported that 29 of the top 63
international drug syndicates, identified as such on the consolidated priority organization target
(CPOT) list, were associated with terrorists.10

The State Department’s 2012 Country Reports on Terrorism describes more than 20 FTOs as
having financially profited from criminal activity to sustain their terrorist operations (see the
Appendix).11 Such listed FTOs include Al Shabaab, Army of Islam (AOI), Al Qaeda in the
Arabian Peninsula (AQAP), Al Qaeda in Iraq (AQI), Al Qaeda in the Islamic Maghreb (AQIM),
Abu Sayyaf Group (ASG), United Self-Defense Forces of Colombia (AUC), Continuity Irish
Republican Army (CIRA), Communist Party of the Philippines (CPP), Revolution People’s

5 U.S. National Intelligence Council (NIC), The Threat to U.S. National Security Posed by Transnational Organized
Crime, 2011.
6 Prepared testimony of DNI Clapper, in U.S. Congress, Senate Select Committee on Intelligence, Worldwide Threat
Assessment of the U.S. Intelligence Community, 113th Cong., 1st sess., March 12, 2013.
7 U.S. Department of Justice (DOJ), Overview of the Law Enforcement Strategy to Combat International Organized
Crime, April 2008.
8 Prepared testimony of U.S. Drug Enforcement Administration (DEA) Special Operations Division Special Agent in
Charge Derek S. Maltz, in U.S. Congress, House Committee on Foreign Affairs, Subcommittee on Terrorism,
Nonproliferation, and Trade, Narcoterrorism and the Long Reach of U.S. Law Enforcement, Part II, Serial No. 112-81,
112th Cong., 2nd sess., November 17, 2011 (Washington, D.C.: U.S. Government Printing Office, 2011).
9 Prepared testimony of DEA Assistant Administrator for Intelligence Steven W. Casteel, in U.S. Congress, Senate
Committee on the Judiciary, Narco-Terrorism: International Drug Trafficking and Terrorism—A Dangerous Mix,
S.Hrg. 108-173, 108th Cong., 1st sess., May 20, 2003 (Washington: D.C.: U.S. Government Printing Office, 2003).
10 Obama Administration, National Strategy to Combat Transnational Organized Crime, July 2011.
11 U.S. Department of State, Country Reports on Terrorism 2012, May 2013.

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Liberation Party (DHKP/C), National Liberation Army (ELN), Revolutionary Armed Forces of
Colombia (FARC), Moroccan Islamic Combatant Group (GICM), Hamas, Hezbollah, Haqqani
Network (HQN), Jemaah Ansharut Tauhid (JAT), Jemaah Islamiya (JI), Lashkar I Jhangvi (LJ),
Liberation Tigers of Tamil Eelam (LTTE), Kurdistan Workers’ Party (PKK), Shining Path (SL),
and Tehrik-e Taliban Pakistan (TTP).

Such government studies reinforce assessments from the late 1990s that predicted an increase in
crime-terrorism interactions. For example, in 1997, a U.S. Department of Defense (DOD) task
force study on transnational threats concluded that terrorists groups, religious extremists, anti-
government militias, narcotics traffickers, and global criminals were “increasingly linked in new
and more cooperative ways.”12 In 2000, a U.S. interagency assessment of international crime
threats further highlighted growing crime-terrorism interactions.13 The assessment identified the
end of the Cold War as a major contributor to this development. As certain insurgent and
extremist groups were no longer able to rely on Soviet-affiliated state sponsors for aid, some
increasingly turned to crime as an alternative source of funds.14 The assessment also concluded
that most crime-terrorism interactions were often fleeting, or based on symbiotic arrangements
that were nevertheless strained and marked by suspicion. Some groups, however, viewed criminal
activity as not only a lucrative source of funding, but also an effective means to advance their
political or ideological objectives.15 Other groups, meanwhile, underwent transformations in
which their primary organization motivations would shift from political to (illicit) profit-driven.

U.S. Government Strategies
To combat this apparent criminal-terrorist connection, recent Administrations have issued several
key strategic documents to guide U.S. government efforts and approach the issue from the
perspectives of national security, counterterrorism, anti-crime, and intelligence. The Obama
Administration’s key strategic documents are described below in chronological order.

In August 2009, the Obama Administration issued its National Intelligence Strategy, which
included as a primary mission the goal of penetrating and supporting “the disruption of terrorist
organizations and the nexus between terrorism and criminal activities.”16

In May 2010, the Obama Administration issued its National Security Strategy, a broad-ranging
document that identified key priorities for the United States.17 One such priority was to combat
“transnational criminal threats and threats to governance”—including the “crime-terror nexus.”

12 U.S. Department of Defense (DOD), Office of the Undersecretary of Defense for Acquisition and Technology,
Defense Science Board, 1997 Summer Study Task Force on DOD Responses to Transnational Threats, Vol. 1, final
report, October 1997.
13 Clinton Administration, International Crime Threat Assessment, December 2000.
14 See also Steven Hutchinson and Pat O’Malley, “A Crime-Terror Nexus? Thinking on Some of the Links Between
Terrorism and Criminality,” Studies in Conflict & Terrorism, Vol. 30, No. 12, December 2007, pp. 1095-1107; Angel
Rabasa et al., “Chapter Seven: The Convergence of Terrorism, Insurgency, and Crime,” in Beyond al-Qaeda, Part 2:
The Outer Rings of the Terrorist Universe, RAND Corporation, 2006, pp. 101-160.
15 The report states that some groups, particularly those that controlled territory, would encourage illicit activity in the
region to “isolate” it from the national economy, to “deprive the government of the region’s economic productivity,”
and to “increase the dependence of the local population on their control and authority.”
16 Obama Administration, National Intelligence Strategy of the United States of America, August 2009.
17 Obama Administration, National Security Strategy, May 2010.

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The 2010 National Security Strategy encouraged a “multidimensional strategy” that emphasized
citizen security and harm reduction, disruption and dismantling of illicit networks, and bolstering
the capacity of foreign governments to enforce the rule of law.

In April 2011, the U.S. Department of Defense (DOD) issued a Counternarcotics and Global
Threats Strategy.18 The strategy describes an international security environment characterized by
a “confluence of dispersed and decentralized global networks of criminals and terrorists.” It
further states that such networks are “composed largely of individuals and groups that receive
occasional support from corrupt government officials” and “are loosely organized and ever-
evolving, pragmatically appearing and disappearing for political-criminal gain.” The DOD
strategy identifies three strategic goals:

• to disrupt and disable actors and activities related to trafficking, insurgency,
corruption, threat finance, terrorism, drug precursor chemical distribution in
Afghanistan and Pakistan;

• to sharply reduce illicit drug and drug precursor chemical distribution, as well as
related transnational organized criminal threats in the Western Hemisphere,
particularly Mexico, Central America, Colombia, and Peru;19 and

• to mitigate the size, scope, and influence of targeted transnational criminal
organizations and trafficking networks such that they pose only limited, isolated
threats to U.S. national and international security.

In June 2011, the Obama Administration issued its National Strategy for Counterterrorism.
Included among its eight “overarching goals” was the goal to “deprive terrorists of their enabling
means”—terrorist financing and the facilitation of terrorist travel, materiel smuggling, and
communications.20 The Administration’s National Strategy for Counterterrorism sought to achieve
this goal by

• blocking the flow of financial resources to terrorist groups through sanctions,
prosecutions, international cooperation, and diplomatic pressure (money
laundering and kidnapping for ransom); and

• working with international partners to identify and prevent terrorist groups from
moving its recruits, operatives, and supplies across borders (human and weapons
smuggling).

In July 2011, the Obama Administration issued its Strategy to Combat Transnational
Organized Crime.21 Among its primary objectives was to “defeat transnational criminal
networks that pose the greatest threat to national security by targeting their infrastructures,
depriving them of their enabling means, and preventing the criminal facilitation of terrorist
activities.” Key actions described by the strategy to combat the crime-terrorism nexus included
the following:

18 U.S. Department of Defense, Department of Defense Counternarcotics and Global Threats Strategy, April 27, 2011.
19 Order of countries and regions as stated in the original text.
20 Obama Administration, National Strategy for Counterterrorism, June 2011.
21 Obama Administration, Strategy to Combat Transnational Organized Crime, July 2011.

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• Enhancing intelligence collection on transnational organized crime threats,
particularly the potential role of criminal groups in facilitating WMD terrorism.

• Exposing vulnerabilities in the international financial system that could be
exploited by “terrorist and other illicit financial networks” and applying financial
tools and sanctions against such networks.

• Establishing a “whole-of-government plan” to combat kidnapping for ransom as
a means to finance terrorists, among other “bad actors.”

• Developing a “comprehensive approach” to dismantling drug trafficking
organizations with connections to terrorist groups.

• Enhancing foreign capabilities through counterterrorism capacity building,
foreign law enforcement cooperation, military cooperation, and the strengthening
of justice and interior ministries.

Patterns in Crime-Terrorism Interaction
Limited unclassified anecdotal evidence largely serves as the basis for the current understanding
of criminal-terrorist connections. In the absence of comprehensive data, it is difficult to assess
whether such anecdotal cases are indicative of a widespread problem, a growing trend, or isolated
observation.22 What is clear from existing literature on the subject, however, is that crime-
terrorism interactions can vary significantly and change over time. The following sections
summarize several common patterns of crime-terrorism links, with specific examples drawn from
a range of court cases, reports, and news articles.

Partnership Motivations and Disincentives
The underlying rationales for criminal and terrorist group partnerships as well as the conditions
that may facilitate the evolution or transformation of a criminal or terrorist group into the other
may vary. Collaboration can serve as a force multiplier for both criminal and terrorist groups,
bolstering their capabilities, strengthening their infrastructure, and increasing their wealth. On the
other hand, partnering could also have the potential of sowing seeds for distrust and competition
among illicit actors—vulnerabilities that could be exploited by international security authorities.23

From the perspective of a terrorist organization, the primary motivation for partnering or adopting
criminal tactics would be to sustain and grow the organization for purposes of pursuing or
financing its ideological-based activities. Out of this sense of perceived need, the organization
may turn to or rely more heavily on partnering with criminal syndicates for continued viability.
Common disincentives for partnering would include increased attention from government
authorities; fear of compromising internal security; ideological resistance to illicit endeavors; and
the availability of sufficient alternative funding sources, such as state sponsors.

22 See also John T. Picarelli, “Osama bin Corleone? Vito the Jackal? Framing Threat Convergence Through an
Examination of Transnational Organized Crime and International Terrorism,” Terrorism and Political Violence, Vol.
24, No. 2 (2012), pp. 180-198.
23 Such considerations are predicated on the theory that the leaders of an organization think rationally about the near-
and long-term considerations and consequences, unintended or otherwise, of partnering with an entity that has differing
motivations and ideologies.

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From the perspective of a criminal syndicate, motivations for cooperating with terrorist
organizations would include the near singular purpose of increasing its financial stature. As with
terrorist organizations, common disincentives from the perspective of criminal groups may
involve increased and unwanted attention from authorities, risk of infiltration, and heightened
vulnerability of organization leadership to capture. Criminal groups already in control of lucrative
revenue streams may not find the potential for additional business with terrorist groups sufficient
to outweigh the costs. Criminal groups may also opt to avoid collaboration with terrorist groups if
such interactions would disrupt their relationships with corrupt government officials who are
willing to facilitate criminal activities, but not terrorism-related ones.

Conditions that may affect the likelihood of confluence include a lack of in-house capabilities and
demand for special skills to conduct particular operations. Some groups may be more hesitant to
collaborate with outsiders, depending in part on the nature of the operational environment, the
presence of competitors, and the opportunity for contact with and the strength of relations
between terrorist and criminal elements. Other barriers to cooperation may include cultural,
religious, or ideological differences across groups. On the other hand, motivations such as greed
or necessity for organizational viability or expansion may induce some groups to welcome or
seek out external partners.

Individual groups may also transition along an apparent crime-terrorism continuum. Over time,
ideologically motivated groups that initially avoid involvement with criminal activities may
become increasingly attracted by the lucrative nature of criminal activities.24 In other instances,
criminal groups may become radicalized and apply their criminal expertise to conduct operations
that not only result in lucrative illicit profits but also further ideologically oriented goals. In other
situations, individuals in a terrorist organization may not follow leadership directives to stay away
from individuals in a criminal organization (or vice versa) and may unilaterally develop external
relationships. Some analysts suggest that this phenomenon may occur with greater regularity due
to the increasingly decentralized nature of terrorist groups and other possible factors.25

Appropriation of Tactics
Criminals and terrorists often share similar tactics to reach their operational goals.26 These include
acts of terrorism and political violence; involvement in criminal activity for profit; money
laundering; undetected cross-border movements; illegal weapons acquisition; and government
corruption. Changes in the selection of tactics may signify shifts in the strength and capacity of an
organization or the ideological desires of the organization’s leadership. A criminal group under
pressure by authorities or rival criminal groups may react by organizing violent attacks to
intimidate the public and deter the government from future pursuit. A terrorist group’s loss of
state sponsorship may prompt it to find illicit alternatives for funding and operational support.
The following sections describe several methods and tactics common to both criminal and

24 See, for example, Karen Ballentine and Jake Sherman, eds., The Political Economy of Armed Conflict: Beyond Greed
and Grievance (Boulder, CO: Lynne Rienner Publishers, 2003); Paul Collier and Anke Hoeffler, “Greed and Grievance
in Civil War,” Oxford Economic Papers, Vol. 56, No. 4 (2004), pp. 563-595.
25 Richard Barrett, The Economic Crisis: Al-Qaeda’s Response, Washington Institute for Near East Policy, Policywatch
no. 1485, March 9, 2009.
26 It should be noted that the adoption of a tactic by either a criminal or terrorist group that is traditionally used by the
other entity in and of itself does not change the ideology, motivation, and goals of the organization or how it might be
designated and approached by international security actors.

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terrorist groups, including (1) the use of violence for political effect, (2) crime-for-profit
activities, and (3) illicit support activity.

Violence for Political Effect

Although more commonly associated with terrorist groups, criminal groups have also
occasionally used violence as a tactic to change political and public perceptions. Common past
examples have included the use of terrorist-style violence, intimidation, and hostage-taking
tactics by the Brazilian prison gang and drug trafficking organization (DTO) Primeiro Comando
da Capital (PCC) in 2006.27 In response to counternarcotics pressure in the 1980s and 1990s, the
Medellin cartel conducted a wave of violent attacks on Colombian government and civilian
targets, including the explosion of a commercial airliner and a truck bomb. The Italian mafia
targeted prominent landmarks, politicians, and government officials in response to law
enforcement pressure in the 1990s.28

Drug trafficking-related violence in Mexico,
which surged in recent years due to a
combination of increased counternarcotics
pressure by the government and DTO-on-DTO
competition, has at times appeared similar to
terrorist-style attacks, with comparable tactics of intimidation.29 Mexican government officials,
for example, have been targeted by traffickers, at times in reprisal for their role in cartel arrests.
In May 2008, one of Mexico’s highest-ranking law enforcement officials, Edgar Millan Gomez,
was assassinated in Mexico City by DTO-affiliated gunmen.30 In other cases, drug traffickers
have deployed small improvised explosive devices (IEDs) against law enforcement officials
suspected of working for rival gangs.

Observers continue to debate whether the use of political violence as a tactic by Mexican DTOs
warrants describing such groups as terrorist organizations. Most observers recognize that few
instances of Mexican DTO violence appear to be motivated by ideology or a desire to overthrow
the Mexican government.31 According to the State Department’s 2012 Country Reports on
Terrorism, there was “no evidence that these criminal organizations had political or ideological
motivations, aside from seeking to maintain the impunity with which they conduct their criminal
activities.”32 Some have suggested that one of these exceptions may have occurred in September
2008, when a deadly attack on Mexico’s Independence Day involving throwing grenades into a
crowd of revelers that had gathered for a firework display was suspected to have been organized

27 See for example Luciana M. Fernández, “Organized Crime and Terrorism: From the Cells Towards Political
Communication, A Case Study,” Terrorism and Political Violence, Vol. 21, No. 4 (2009), pp. 595-616.
28 See also Louise I. Shelley and Picarelli, “Methods Not Motives: Implications of the Convergence of International
Organized Crime and Terrorism,” Police Practice and Research, Vol. 3 No. 4 (2002), pp. 305-318.
29 See for example Sylvia M. Longmire and John P. Longmire IV, “Redefining Terrorism: Why Mexican Drug
Trafficking is More Than Just Organized Crime,” Journal of Strategic Security, Vol. 1, No. 1 (2008), pp. 35-51.
30 James C. McKinley, “Gunmen Kill Chief of Mexico’s Police,” The New York Times, May 9, 2008; McKinley, “6
Charged in Shooting of Officer in Mexico,” The New York Times, May 13, 2008.
31 “Mexico: Rebranding the Cartel Wars,” Stratfor, December 25, 2010; Scott Stewart, “The Perceived Car Bomb
Threat in Mexico,” Stratfor, April 13, 2011.
32 U.S. Department of State, Country Reports on Terrorism 2012, May 2013.

Further CRS Reading
For more information on DTOs in Mexico, see CRS
Report R41576, Mexico’s Drug Trafficking Organizations:
Source and Scope of the Violence, by June S. Beittel.

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by drug traffickers.33 Yet, in this case, some traffickers appeared to distance themselves from the
attack, joining in the victims’ outcry and refusing to take responsibility for the attack. Other
incidents that have raised questions about Mexican drug traffickers’ motives and tactics include a
casino fire that killed 52 civilians in 2011, and was allegedly instigated by Los Zetas.34

The Suspected 2011 Iranian Plot to Assassinate the Saudi Ambassador to the
United States

Highlighting the potential for cooperation among organized crime and terrorist groups to plan and conduct an act of
violence is the alleged plot to assassinate Saudi ambassador to the United States Adel al-Jubeir, publicly disclosed in
October 2011.35 According to U.S. authorities, Manssor Arbabsiar, a dual U.S.-Iranian national from Corpus Christi,
TX, and several members of the Iran-based Islamic Revolutionary Guards Corps-Quds Force (IRGC-QF) planned to
assassinate al-Jubeir by bombing a local restaurant he frequented and also by bombing the Saudi Arabian and Israeli
embassies in Washington, DC.

As part of the alleged bombing plot, Arbabsiar arranged to hire members of the Mexican DTO Los Zetas to conduct
the assassination for a fee of $1.5 million. A side deal was reportedly discussed in which several tons of opium from
the Middle East would be trafficked to Mexico. The alleged plot, however, was discovered because Arbabsiar’s
Mexican DTO intermediary was in fact an informant for the DEA. Arbabsiar was ultimately arrested in New York and
reportedly confessed to having been recruited, funded, and directed by the IRGC-QF to find Mexican DTO members
to conduct the assassination plot. In conjunction with Arbabsiar’s arrest, the U.S. Department of the Treasury
announced financial sanctions against Arbabsiar and four others connected to the plot who were alleged members of
the IRGC-QF, an organization that the Treasury Department had designated pursuant to Executive Order (EO)
13224 in October 2007. On October 17, 2012, Arbabsiar pleaded guilty in U.S. federal court to charges associated
with the murder-for-hire plot.36 In announcing the guilty plea, DEA Administrator Leonhart noted, “The dangerous
connection between drug trafficking and terrorism cannot be overstated.”37 On May 30, 2013, Arbabsiar was
sentenced to 25 years in prison.

Many observers have commented with incredulity that the IRGC-QF would partner with a non-Muslim DTO or use
non-professional Iranian-American operatives such as Arbabsiar, and that senior Iranian authorities would authorize
such an action on U.S. soil. It remains to be seen whether this alleged plot is indicative of greater crime-terrorism
cooperation or a one-time departure from conventional IRGC-QF tactics. Other alleged plots, many of which appear
to have also failed spectacularly, have been attributed in media reports to other Iranian sponsored groups, including
Hezbollah.38

33 “Mexico Independence Day Grenade Attack Kills 7,” USA Today, September 16, 2008; Marc Lacey, “Grenade
Attack in Mexico Breaks from Deadly Script,” The New York Times, September 25, 2008; E. Eduardo Castillo,
“Mexico Arrests 3 Suspects in Grenade Attack,” Associated Press, September 27, 2008.
34 Another exception may include the activities of the Mexican DTO La Familia Michoacana and its spin-off group Los
Caballeros Templarios. Unlike other Mexican DTOs, this group purports to be motivated by both criminal and
ideological rationales, describing itself as a religious organization and defender of local political grievances. Shawn
Teresa Flanigan, “Terrorists Next Door? A Comparison of Mexican Drug Cartels and Middle Eastern Terrorist
Organizations,” Terrorism and Political Violence, Vol. 24, No. 2 (2012), pp. 279-294; Phil Williams, “The Terrorism
Debate Over Mexican Drug Trafficking Violence,” Terrorism and Political Violence, Vol. 24, No. 2 (2012), pp. 259-
278.
35 DOJ, “Two Men Charged in Alleged Plot to Assassinate Saudi Arabian Ambassador to the United States,” press
release, October 11, 2011; U.S. District Court, Southern District of New York (SDNY), United States of America v
Manssor Arbabsiar and Gholam Shakuri, criminal complaint, October 11, 2011; U.S. Department of the Treasury,
“Treasury Sanctions Five Individuals Tied to Iranian Plot to Assassinate the Saudi Arabian Ambassador to the United
States,” press release, October 11, 2011; Benjamin Weiser, “Not-Guilty Plea in Plot to Kill Saudi Ambassador to the
U.S.” The New York Times, October 24, 2011.
36 DOJ, “Man Pleads Guilty in New York to Conspiring with Iranian Military Officials to Assassinate Saudi Arabian
Ambassador to the United States,” press release, October 17, 2012.
37 Ibid.
38 Nicholas Kulish, Eric Schmitt, and Matthew Brunwasser, “Bulgaria Implicates Hezbollah in July Attack on Israelis,”
The New York Times, February 5, 2013.

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Crime-for-Profit

In addition to organized crime groups, some terrorist organizations may seek funding through
criminal activities. Often, the potential profits associated with criminal activity are a motivating
factor for both organized crime and terrorist groups. Since the end of the Cold War and
corresponding declines in traditional state-sponsored sources of funding, some observers suggest
that terrorist groups have become increasingly motivated to generate funds through criminal
activity to sustain organizational capabilities. Heightened international counterterrorism measures
in the past decade may have further depleted other traditional sources of funds, including private
sector donations, which reinforce the desire for terrorist groups to seek alternative funding
methods.

Criminal activities conducted for profit may range from local crimes of theft, burglary, and
extortion to illicit trafficking of high-value commodities on a transnational scale. Terrorist groups
may also “tax” other groups or charge a security or protection fee for permitting illicit trafficking
activity to take place in a certain region under their control. Although terrorist groups may engage
in criminal activity for fundraising, it is not always the case that such groups lose their ideological
motivations. As one researcher explains, “[C]riminality does not imply criminalization. It is
entirely possible for armed groups to exploit drugs, smuggling, and extortion without becoming
motivated by these activities. Resources do not speak for themselves: simply engaging in
criminality does not mean that an armed group exists to be criminal.”39

The universe of potential crime-for-profit activities is vast. The following list describes three
common transnational manifestations: drug trafficking, cigarette smuggling, and kidnapping-for-
ransom.

• Drug trafficking: Illicit narcotics, particularly cocaine, heroin, hashish, and
methamphetamine, as well as the chemical precursors required to manufacture
such drugs, are attractive commodities to smuggle due to their high pecuniary
value, as well as the ease with which they can be appropriated, processed, stored,
and transported in small, difficult-to-detect movements and with limited static
infrastructure costs. Terrorist groups are associated with major drug-producing
countries, such as Afghanistan, Burma, Colombia, Morocco, and Peru, as well as
among countries through which key drug transit routes pass.40 In drug-producing
countries, the narcotics trade has the potential to provide terrorist groups with an
added bonus: recruits and sympathizers among impoverished, neglected, and
isolated farmers who can not only cultivate drug crops but also popularize and
reinforce anti-government movements.41

39 Paul Staniland, “Organizing Insurgency: Networks, Resources, and Rebellion in South Asia,” International Security,
Vol. 37, No. 1 (Summer 2012), pp. 142-177.
40 James A. Piazza, “The Opium Trade and Patterns of Terrorism in the Provinces of Afghanistan: An Empirical
Analysis,” Terrorism and Political Violence, Vol. 24, No. 2 (2012), pp. 213-234.
41 Vanda Felbab-Brown, Shooting Up: Counterinsurgency and the War on Drugs (Washington, D.C.: Brookings
Institution Press, 2010).

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Afghan Drugs and the Taliban
As the single largest source of illicit opium and heroin worldwide for the past decade, the narcotics trade is both a
major cause and consequence of criminality and insecurity in Afghanistan. Although historically not always the case,
the opiate trade today appears to be one of several key sources of funds for the Taliban.42 According to the U.N.
Office on Drugs and Crime (UNODC), Afghan opiates generated approximately $68 billion in proceeds in 2009, of
which some $140 million-$170 million went to anti-government insurgency groups, such as the Taliban.43 U.S. reports
further indicate that some of the Taliban’s narcotics proceeds have been funneled in and out of Afghanistan and
countries in the Persian Gulf through hawala-style informal value transfer networks and money exchanges houses,
such as the New Ansari Money Exchange.44

Research indicates that the Taliban reportedly obtains drug-related proceeds in several ways.45 Taliban commanders
reportedly collect agricultural tithes (ushr) from poppy farmers and roadside levies (zakat) from traffickers.
Additionally, the Taliban reportedly receives money, vehicles, and weapons in exchange for protection against
interdiction and eradication.46 The Taliban also supports efforts to facilitate seasonal migrant flows toward opium
poppy farms for harvest. Opium traffickers pay the Taliban to transport narcotics throughout Afghanistan to
neighboring nations.47 Moreover, Taliban fighters appear to provide security for processing labs and for shipments of
the chemicals needed to make heroin.48 They also help drug lords fight Afghan government forces engaged in poppy
eradication efforts. Moreover, local Taliban commanders have at times directly engaged in drug trafficking activities to
supplement their incomes.49

• Illicit tobacco trade: The production, smuggling, and sale of tobacco products,
including genuine and counterfeit cigarettes, is a lucrative form of financing for
organized crime as well as terrorist groups, such as Hezbollah, Hamas, the
Kurdistan Worker’s Party (PKK), and the Real Irish Republican Army (RIRA).50

42 In 2000, the Taliban implemented countrywide opium ban that resulted in the largest one-year reduction in opium
poppy cultivation recorded by the United Nations. See also United Nations Office on Drugs and Crime (UNODC) and
the World Bank, Afghanistan’s Drug Industry: Structure, Functioning, Dynamics, and Implications for Counter-
Narcotics Policy, Doris Buddenberg and William A. Byrd, eds., November 28, 2006.
43 UNODC, The Global Afghan Opium Trade: A Threat Assessment, July 2011.
44 U.S. Department of the Treasury, “Treasury Designates New Ansari Money Exchange,” press release, February 18,
2011; Ginger Thompson and Alissa J. Rubin, “Sanctions Placed on Afghan Exchange,” The New York Times, February
18, 2011.
45 See for example Barnett R. Rubin and Jake Sherman, Counter-Narcotics to Stabilize Afghanistan: The False Promise
of Crop Eradication, Center on International Cooperation, New York University, February 2008; Peters, How Opium
Profits the Taliban, United States Institute of Peace (USIP), Peaceworks No. 62, August 2009; Peters, Crime and
Insurgency in the Tribal Areas of Afghanistan and Pakistan, Combating Terrorism Center, Don Rassler, ed.,
Combating Terrorism Center (CTC) at West Point, harmony project, October 15, 2010.
46 James Risen, “Propping Up a Drug Lord, Then Arresting Him,” The New York Times, December 11, 2010; DOJ,
“Haji Bagcho Sentenced to Life in Prison on Drug Trafficking and Narco-Terrorism Charges,” press release, June 12,
2012; Ryan Evans, “The Micro-Level of Civil War: The Case of Central Helmand Province,” CTC Sentinel, CTC at
West Point, Vol. 5, Iss. 9 (September 2012), pp. 14-17.
47 Julia Preston, “Afghan Arrested in New York Said to Be A Heroin Kingpin,” The New York Times, April 26, 2005;
“Warlord or Druglord?” Time Magazine, February 8, 2007; Benjamin Weiser, “In Drug Trial, Sharply Differing
Portraits of Afghan With Ties to the Taliban,” The New York Times, September 11, 2008.
48 Theresa Cook, “Alleged Taliban-Linked Drug Trafficker Charged in U.S.,” ABC News, May 11, 2007.
49 DOJ, “Member of Afghan Taliban Sentenced to Life in Prison in Nation’s First Conviction on Narco-Terror
Charges,” press release, December 22, 2008.
50 U.S. District Court, Western District of North Carolina, Charlotte Division, United States of America v Mohamad
Youssef Hammoud et al., indictment, March 28, 2001; U.S. Department of Homeland Security (DHS), Immigration and
Customs Enforcement (ICE), “Mohamad Youssef Hammoud Sentenced to 30 Years in Terrorism Financing Case,”
press release, January 27, 2011; Sari Horwitz, “Cigarette Smuggling Linked to Terrorism,” The Washington Post, June
8, 2004; U.S. Congress, House Committee on Homeland Security, Tobacco and Terror: How Cigarette Smuggling is
Funding Our Enemies Abroad, minority staff report, April 2008. U.S. General Accounting Office (GAO), Terrorist
Financing: U.S. Agencies Should Systematically Assess Terrorists’ Use of Alternative Financing Mechanisms, GAO-
(continued…)

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Cigarette smuggling schemes as a means for financing terrorists have been
discovered in a range of countries and regions, including the United States,
Europe, Turkey, the Middle East and North Africa, and Iraq. Criminals and
terrorists may be drawn to the illicit tobacco trade to take advantage of price
differentials across jurisdictions, bootlegging small consignments from a low-tax
or duty-free outlet and re-selling the products elsewhere at a higher price. If
sufficiently resourced, some groups may conduct larger-scale operations that
divert and smuggle commercial-sized volumes, those in excess of 1 million
cigarettes per consignment, for subsequent distribution and sale.

• Kidnapping for ransom: A form of hostage taking, kidnapping for ransom
(KFR) is a popular means of collecting illicit profits for both organized crime as
well as terrorist groups. KFR is often perceived as a crime of low risk, low cost,
and high reward. As has reportedly been the case for groups such as AQIM, AQI,
the Taliban, and ASG, a single ransom payment has the potential to cover several
months of operating expenses.51 According to the Financial Action Task Force
(FATF), AQIM alone has collected at least $65 million (U.S. dollars) in KFR
payments from 2005 through 2011—a significant portion of its annual budget,
which is reported to total approximately 15 million Euros per year.52 Authorities
are particularly challenged to respond to KFR situations because they often take
place in insecure, politically volatile locations that are difficult to control or
access; involve third-party intermediaries who may facilitate negotiations of
ransom payments without the approval and knowledge of government officials;
and are characterized by opaque and difficult-to-track ransom payment
transactions that involve both alternative remittance mechanisms and the formal
international banking system.

Illicit Support Activity

Both criminal and terrorist groups rely on a variety of illicit support activities to further their
operations. Although some such activities can be conducted with in-house capabilities and assets,
others may require cooperation with external criminal specialists, corrupt “gatekeepers,” local
and regional “fixers,” and “shadow facilitators.”53 The depth and durability of these crime-

(…continued)
04-163, November 2003; Maarten van Dijck, “The Link Between the Financing of Terrorism and Cigarette Smuggling.
What Evidence is There? HUMSEC Journal, Vol. 1, Iss. 1 (June 2007), pp. 5-29; William Billingslea, “Illicit Cigarette
Trafficking and the Funding of Terrorism,” The Police Chief, Vol. 71, No. 2 (2004); Financial Action Task Force
(FATF), Illicit Tobacco Trade, June 2012; Matthew Levitt, Hamas: Politics, Charity, and Terrorism in the Service of
Jihad (New Haven: Yale University Press, 2006).
51 Peters, Crime and Insurgency in the Tribal Areas … , October 2010; Peters, Haqqani Network Financing: The
Evolution of an Industry, CTC at West Point, harmony program, July 2012; Zia Ur Rehman, “Taliban Recruiting and
Fundraising in Karachi,” CTC Sentinel, CTC at West Point, Vol. 5, Iss. 7 (July 2012), pp. 9-11; McKenzie O’Brien,
“Fluctuations Between Crime and Terror: The Case of Abu Sayyaf’s Kidnapping Activities,” Terrorism and Political
Violence, Vol. 24, No. 2 (2012), pp. 320-336; FATF, Organised Maritime Piracy and Related Kidnapping for Ransom,
July 2011; U.S. Department of the Treasury, “Remarks of Under Secretary David Cohen at Chatham house on
‘Kidnapping for Ransom: The Growing Terrorist Financing Challenge,’” October 5, 2012.
52 FATF, Organised Maritime Piracy and Related Kidnapping for Ransom, July 2011.
53 Douglas Farah, Fixers, Super Fixers and Shadow Facilitators: How Networks Connect, International Assessment and
Strategy Center, April 23, 2012; FATF, Global Money Laundering and Terrorist Financing Threat Assessment, July
2010; Shelley and Picarelli, “Methods Not Motives … ,” 2002.

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terrorism relationships for support activities vary. Some terrorist groups view links to outside
criminal networks as short-term marriages of convenience, where the actors build ephemeral
business ties. These interactions often appear to be distinctly transactional in nature, with one
criminal actor or organization providing a specific, tangible service to a terrorist group. In other
cases, these relationships will be more synergistic, with terrorist and criminal groups creating
enduring coalitions. In such coalition relationships, criminals and terrorists assume
complementary but separate roles.

• Money laundering: Illicit support activities may include money laundering
techniques to obfuscate the origins and recipients of funds through front
companies, charities, shell corporations, and other third-party business structures.
The movement and storage of money may also involve illicit support activities
such as bulk cash smuggling and cash couriers; the exploitation of informal
remittance mechanisms, international trade systems, and the formal international
banking sector; and the use of unregulated diamonds, gold, and other minerals
and commodities for stored value.54

54 GAO, Terrorist Financing … , November 2003; Rabasa et al., “Chapter Seven: The Convergence of Terrorism … ,”
2006. In the late 1990s and early 2000s, Al Qaeda purportedly used illegal diamond trade in Africa as a means of stored
value transfer and as part of gems-for-weapons deals.

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Hezbollah, Narcotics, and Illicit Finance: Global Interactions
Hezbollah is a Shiite Islamist militia, political party, and social welfare organization, as well as a State Department-
listed FTO and a specially designated terrorist group pursuant to EOs 12947 and 13224.55 According to official U.S.
government statements, it derives financial benefits from a sprawling global commercial network of licit and illicit
businesses that not only generates revenue for the organization but also provides numerous outlets through which
illicit funds can be laundered, disguised, and moved (see also the “Hezbollah” section below, under “Organizational
Evolution and Variation”). Although anecdotal reports have long appeared to connect Hezbollah global operations
with drug trafficking, money laundering, and other illicit activity, several recent cases in 2011 have highlighted the
potential transnational reach of Hezbollah’s illicit finance activities.56

In February 2011, the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) designated Lebanese
Canadian Bank SAL as a financial institution of primary money laundering concern pursuant to Section 311 of the USA
PATRIOT Act (31 U.S.C. 5318A). In its public notice on the Section 311 finding, FinCEN described the Lebanese
Canadian Bank SAL as “routinely used by drug traffickers and money launderers operating in various countries in
Central and South America, Europe, Africa, and the Middle East” and that Hezbollah profited from the criminal
activities of this global illicit financial network.57

Central to the designation were law enforcement and other sources of information that linked the Colombia-based
narcotics trafficking kingpin Ayman Joumaa with a global network involving Hezbollah facilitators, such as Ali
Mohamad Saleh, and other linked money laundering operations, including those controlled by Jorge Fadlallah
Cheaitelly and Mohamad Zouheir El Khansa.58 In January 2011, the Treasury Department designated Joumaa as a drug
kingpin (SDNTs) and additionally identified him as a specially designated global terrorist (SDGT) in June 2012. In
December 2011, Joumaa was also indicted on drug charges in the United States. According to such charges, he
allegedly coordinated cocaine shipments in connection with the Mexican DTO Los Zetas and laundered as much as
$200 million per month through accounts held with Lebanese Canadian Bank SAL and other financial institutions.59
His South and Central American drug trafficking operations shipped cocaine to the United States and well as to West
Africa for further distribution to Europe. Joumaa reportedly paid undisclosed fees to Hezbollah to facilitate the
transportation and laundering of narcotics proceeds. For example, for bulk cash movements through Beirut
International Airport, Joumaa paid Hezbollah security to safeguard and transport cash.

Joumaa also reportedly used trade-based money laundering (TBML) schemes to help conceal and disguise the true
source, nature, ownership, and control of the narcotics proceeds. Such schemes involved Asian suppliers of consumer
goods as well as used car dealerships in the United States. As part of the U.S. car sales-TBML scheme, for example,
Hezbollah owned and controlled funds are transferred from Lebanon to the United States via banks, currency
exchange houses, and individuals in order to purchase used cars. The cars would be shipped to West Africa and sold
for cash. Cash proceeds, in turn, would be transferred to Lebanon through Hezbollah-linked bulk cash smugglers,
hawaladars, and currency brokers.

Hezbollah’s contacts in West Africa make this region in particular an attractive mid-point for exchanging contraband
and cash and connecting with like-minded, ideologically driven criminals. In another recent U.S. narcotics trafficking
case, for example, a West Africa-based criminal facilitator and member of the Free Patriotic Movement, a Lebanese
Christian party aligned with Hezbollah in the Lebanese cabinet, reportedly provided extensive services to Hezbollah.
According to his indictment, Maroun Saade would pay local bribes to release Hezbollah’s cash couriers who were
arrested in West Africa.60 In the DEA-led operation that ultimately caught Saade and several of his associates, he
agreed to provide individuals whom he thought were Taliban (though were in fact DEA confidential sources) with
cocaine in exchange for weapons and heroin.

55 For more on Hezbollah see CRS Report R41446, Hezbollah: Background and Issues for Congress, by Casey L.
Addis and Christopher M. Blanchard.
56 For other examples of Hezbollah’s reported illicit activity see Nathan Vardi, “Hezbollah’s Hoard,” Forbes, August
14, 2006; Prepared testimony of Washington Institute for Near East Policy Senior Fellow and Director of Terrorism
Studies Matthew Levitt, in U.S. Congress, Senate Committee on Homeland Security and Government Affairs,
Counterfeit Goods: Easy Cash for Criminals and Terrorists, S.Hrg. 109-202, 109th Cong., 1st sess., May 25, 2005
(Washington, D.C.: U.S. Government Printing Office, 2005); Levitt, “Hizbullah Narco-Terrorism: A Growing Cross-
Border Threat,” IHS Defense, Risk, and Security Consulting, September 2012.
57 U.S. Department of the Treasury, Financial Crimes Enforcement Network (FinCEN), “Finding that the Lebanese
Canadian Bank SAL is a Financial Institution of Primary Money Laundering Concern,” Federal Register, Vol. 76, No.
33 (February 17, 2011), pp. 9403-9406. See also Jo Becker, “Beirut Bank Seen as a Hub of Hezbollah’s Financing,”
(continued…)

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• Illicit movements of people, arms, and equipment: Other common forms of
illicit support activities include the clandestine movement of people and the
acquisition of materiel and communications equipment—all of which also
require access to a variety of fraudulent international documents, including visas,
passports, end user certificates, business registrations, shipping licenses, etc.61 In
one example, based on research conducted by the RAND Corporation and press
reports, the Liberation Tigers of Tamil Eelam (LTTE) apparently maintain a cadre
of criminal intermediaries for procuring and smuggling weapons. Such
affiliations between arms brokers and the terrorist group appear to have been
purposefully indirect in order to maintain sufficient distance between criminal
activities and the leaders of the Tamil Tigers.62 In another example, a traditional
human smuggling network along the Syrian-Iraqi border was transformed by AQI
into a key pathway used by foreign terrorists to clandestinely enter Iraq.63

(…continued)
The New York Times, December 13, 2011.
58 DOJ, “U.S. Charges Alleged Lebanese Drug Kingpin With Laundering Drug Proceeds For Mexican And Colombian
Drug Cartels,” press release, December 13, 2011; U.S. Department of the Treasury, “Treasury Targets Key Panama-
Based Money Laundering Operation Linked to Mexican and Colombian Drug Cartels,” press release, December 29,
2011; U.S. Department of the Treasury, “Treasury Targets Major Money Laundering Network Linked to Drug
Trafficker Ayman Joumaa and a Key Hizballah Supporter in South America,” press release, June 27, 2012.
59 U.S. District Court, Eastern District of Virginia, United States of America v Ayman Joumaa, indictment, November
23, 2011; U.S. District Court, SDNY, United States of America v Lebanese Canadian Bank SAL et al., complaint,
December 15, 2011.
60 U.S. District Court, SDNY, United States of America v Maroun Saade et al., indictment, unsealed February 14, 2011.
61 The 9/11 Commission Report: Final Report of the National Commission on Terrorist Attacks Upon the United States
(Washington, D.C.: U.S. Government Printing Office, 2004). See also Daveed Gartenstein-Ross and Kyle Dabruzzi,
The Convergence of Crime and Terror: Law Enforcement Opportunities and Perils, Policing Terrorism Report No. 1,
Center for Policing Terrorism at the Manhattan Institute, June 2007.
62 Rabasa et al., “Chapter Seven: The Convergence of Terrorism … ,” 2006; DOJ, “Man Sentenced for Conspiracy to
Provide Material Support to Terror Organization: Aided Tamil Tiger Terrorists in the Attempted Purchase of Surface to
Air Missiles, Night Vision Devices, Machine Guns and State of the Art Firearms,” press release, October 30, 2008;
DOJ, “Singapore Man Sentenced to More than 4 Years in Prison for Conspiracy to Provide Material Support to a
Foreign Terrorist Organization,” press release, December 16, 2010.
63 According to press accounts, Abu Ghadiyah (now deceased) and his family were reportedly long known to the U.S.
intelligence community as a human smuggling network along the Syrian-Iraqi border. Around the time when U.S.
forces invaded Baghdad in 2003, Abu Ghadiyah transformed his traditional smuggling operation into a key Al Qaeda in
Iraq (AQI) hub for logistics and financial support—including provisions of passports, weapons, money, guides, and
safe houses—to foreign terrorists seeking entry into Iraq. According to the Treasury Department, Abu Ghadiyah was
appointed in 2004 as AQI’s Syrian commander of logistics. In this position he not only continued his smuggling
activities but also reportedly became involved in organizing at least two attacks in Iraq. See Mark Hosenball,
“Targeting a ‘Facilitator’: A Commando Raid into Syria Aimed at Al Qaeda in Iraq,” Newsweek, October 27, 2008;
U.S. Department of the Treasury, “Treasury Designates Members of Abu Ghadiyah’s Network: Facilitates Flow of
Terrorists, Weapons, and Money From Syria to al Qaida in Iraq,” press release, February 28, 2008; Matthew Levitt,
“Al-Qa’ida’s Finances: Evidence of Organizational Decline? CTC Sentinel, CTC at West Point, Vol. 1, Issue 5 (April
2008), pp. 7-9.

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The Case of Victor Bout: Global Illicit Air Cargo Facilitator
Bout is believed to have been one of the world’s most prodigious arms traffickers, notorious for his ability to
transport practically anything anywhere with his fleet of airplanes, primarily former Soviet cargo planes. Prior to his
arrest and eventual conviction in 2011, Bout was widely believed to have had a hand in a range of international
contraband smuggling and sanctions-busting activities in Africa, southwest Asia, and elsewhere. Both the United
Nations and the U.S. government sought to freeze his assets, and Belgium issued an arrest warrant for him in 2002
for crimes related to money laundering and diamond smuggling. He has also been accused of illegally transporting
arms to the Taliban and Al Qaeda, while legally providing air freight transport around the world, including under
contract for the U.S. military in Iraq.64 He was caught in Thailand in 2008 in a DEA sting operation after attempting to
sell surface-to-air missiles, AK-47s, ammunition, C-4 plastic explosives, and unmanned aerial vehicles to U.S.
confidential sources purporting to be members of the FARC. Although Bout was ultimately extradited to the United
States in November 2010, convicted in November 2011 on four counts, and sentenced to 25 years in prison in April
2012, other enterprising crime-terrorism facilitators may fill the vacuum he has left in the global illicit arms trade.65

• Corruption: Through bribery, financial inducements, and other forms of
coercion, including the credible threat of violence, both criminal and terrorist
elements can take advantage of corrupt actors to facilitate their operations and
reduce the likelihood of detection and capture. Corrupt actors may range from
border guards, financial regulators, justice sector officials, high-level
policymakers and political figures, to private bankers, small business owners, and
industry magnates. Government protection may take several forms, such as
selectively ignoring evidence of illicit activity perpetrated by certain groups;
actively providing intelligence and other support to illicit actors; or the wholesale
ceding of authority and legitimacy to an illicit group.

Organizational Evolution and Variation
Typically, criminal groups are primarily driven by profit motives, whereas terrorist groups are
ideologically driven. The motivations that drive terrorist and criminal groups, however, can
evolve with time. A purely criminal group may transform to adopt political goals and ideological
motivations. Terrorist groups, on the other hand, may shift toward criminality. For some terrorist
groups, criminal activity remains secondary to ideological ambitions. For others, profit-making
may surpass political aspirations as the dominant operating rationale. The level of involvement
and expertise in terrorist or criminal activities may vary, depending on the organization’s current
leadership, membership composition, geographic distribution of sympathizers and diaspora
networks, dependence on state sponsorship, and physical proximity or access to illicit resources.66
Frequently cited terrorist organizations involved in criminal activity include, among others, ASG,

64 See for example Michael Wines, “A Nation Challenged: A Suspect; Russian Goes on the Air to Deny Al Qaeda
Ties,” The New York Times, March 1, 2002; Peter Landesman, “Arms and the Man,” The New York Times Magazine,
August 17, 2003; Douglas Farah and Stephen Braun, Merchant of Death: Money, Guns, Planes, and the Man Who
Makes War Possible (Hoboken, NJ: John Wiley & Sons, Inc., 2007); Nicholas Schmidle, “Disarming Viktor Bout,”
The New Yorker, March 5, 2012.
65 DOJ, “Viktor Bout Extradited to the United States to Stand Trial on Terrorism Charges,” press release, November
17, 2010; DOJ, “International Arms Dealer Viktor Bout Convicted in New York of Terrorism Crimes,” press release,
November 2, 2011; DOJ, “International Arms Dealer Viktor Bout Sentenced in Manhattan Federal Court to 25 Years in
Prison for Terrorism Crimes,” press release, April 5, 2012; Kathi Lynn Austin, Viktor Bout’s Gunrunning Successors:
A Lethal Game of Catch Me If You Can, Conflict Awareness Project, August 2012.
66 See also Victor Asal, Kathleen Deloughery, and Brian J. Phillips, “When Politicians Sell Drugs: Examining Why
Middle East Ethnopolitical Organizations Are Involved in the Drug Trade,” Terrorism and Political Violence, Vol. 24,
No. 2 (2012), pp. 199-212.

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Al Qaeda’s affiliates, D-Company, PKK, FARC, Haqqani Network, and Hezbollah. Brief
descriptions of these groups’ criminal activities are described below.

Abu Sayyaf Group (ASG)

A Philippines-based terrorist group, ASG appears to
have at times prioritized criminal activities over
ideological operations. Major shifts toward crime
occurred in conjunction with leadership and membership
composition changes, which altered the relative
importance of ideological zeal and criminal tendencies.
During its periods of high criminality, ASG became well known for its success in kidnappings for
ransom, maritime piracy, and arms trafficking.67 Observers suggest that the group’s overall drive
toward criminal activity has been perpetuated by the group’s ability to generate illicit profits, with
new recruits tending to be more motivated by ASG’s promise of financial wealth rather than
ideological convictions. The State Department has listed ASG as an FTO since 1997, and
President George W. Bush designated ASG a specially designated global terrorist (SDGT)
pursuant to EO 13224 in 2001.

Al Qaeda’s Affiliates

There is no conclusive evidence of senior-level Al
Qaeda members directly involved with or motivated by
organized crime. Many speculate that this is because of
the group’s strict ideological beliefs and fear of a loss of
credibility if senior leaders were found to be directly
involved in such activities. Connections to organized
crime activity, however, can be drawn among mid-level
and low-level Al Qaeda members and supporters. Moreover, it appears that Al Qaeda’s affiliates
and franchises do not necessarily share the same aversion to criminal activity. Notable crime-
funded Al Qaeda affiliates include AQIM and AQI.68 Additionally, Al Qaeda’s disinclination
toward direct involvement in organized crime has not prevented it from cooperating, supporting,
and jointly training with other insurgent groups that are more entrenched in trafficking and
smuggling activities, including the Haqqani Network and the Taliban. The State Department
designated Al Qaeda as an FTO in October 1999, and President George W. Bush designated it as
an SDGT pursuant to EO 13224 in 2001. Several of its affiliates have also been designated
separately as FTOs, including AQI in December 2004, AQIM in February 2008 (AQIM was also
previously designated in March 2002 when it was called the Salafist Group for Call and Combat,
GSPC), and AQAP in January 2010.

67 McKenzie O’Brien, “Fluctuations Between Crime and Terror: The Case of Abu Sayyaf’s Kidnapping Activities,”
Terrorism and Political Violence, Vol. 24, No. 2 (2012), pp. 320-336. See also Rabasa et al., “Chapter Seven: The
Convergence of Terrorism … ,” 2006.
68 U.S. Department of State, Country Reports on Terrorism 2011, July 2012; U.S. Department of the Treasury,
“Remarks of Under Secretary David Cohen at Chatham house on ‘Kidnapping for Ransom: The Growing Terrorist
Financing Challenge,’” October 5, 2012.

Further CRS Reading
For more information on ASG and other
internal security threats in the Philippines,
see CRS Report RL33233, The Republic of the
Philippines and U.S. Interests, by Thomas Lum.

Further CRS Reading
For background information on the global
reach of Al Qaeda, see archived CRS Report
R41070, Al Qaeda and Affiliates: Historical
Perspective, Global Presence, and Implications
for U.S. Policy, coordinated by John Rollins.

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The 2004 Madrid Bombing and Its Connections to Drugs
The Al Qaeda cell that committed the March 2004 train bombings in Madrid provides an example of terrorist cell
whose members used extensive criminal endeavors to fund its operations. One of the plot’s ringleaders and several
accomplices were drug dealers and traffickers before they became radicalized and joined the Madrid cell. These
operatives sold narcotics to pay for cars, safe houses, phones, and other logistical support, and weapons.
Furthermore, they reportedly exchanged drugs for the explosives used in the attacks.69 One of the masterminds of
the Madrid bombings was reportedly Jamal Ahmidan, a major drug dealer who ran a far-reaching narcotics ring that
sold hashish and Ecstasy throughout Western Europe in the 1990s. Ahmidan appears to have first become interested
in extremist Islamic ideology while serving time in a Spanish prison in 1998, and then was fully radicalized in a
Moroccan jail from 2000 to 2003.70

D-Company

Dawood Ibrahim, the alleged leader of D-Company, is an INTERPOL fugitive and wanted in
connection with the 1993 Mumbai bombing and sanctioned under U.N. Security Council
Resolution 1267. Ibrahim was listed in October 2003 by the Treasury Department as a specially
designated global terrorist (SDGT), and both Ibrahim and his organization were listed as
significant foreign narcotics traffickers (SDNTKs) in May 2008, pursuant to the Foreign
Narcotics Kingpin Designation Act. His organization, D-Company, can be characterized as both a
transnational criminal syndicate as well as ideologically aligned with terrorist groups operating in
South Asia, including Lashkar-e-Taiba (LeT). According to reports, D-Company originated as a
smuggling operation in the 1970s. It evolved in the 1990s into an organized crime group not only
motivated by profit but also one that engaged in insurgent activity, eventually supporting efforts
to smuggle weapons to militant and terrorist groups in the region. By the 1990s, it began to
conduct and participate in terrorist attacks, including the March 12, 1993, Bombay bombing. D-
Company’s criminal activities reportedly span extortion, smuggling, narcotics trafficking, and
contract killings.71 Its apparent willingness to work with and provide logistical, financial, and
material support to ideologically motivated violent groups exemplifies the risks associated with
converged criminal and terrorists threats.72

Kurdistan Worker’s Party (PKK)

Formed in the 1970s and operational since the early 1980s as a Kurdish nationalist group with
Marxist-Leninist leanings, the PKK increasingly turned to crime after it lost its state sponsors.73
By the late 1990s, and particularly after its leader Abdullah Ocalan was captured in 1999, the

69 Dale Fuchs, “Spain Says Bombers Drank Water From Mecca and Sold Drugs,” The New York Times, April 15, 2004;
“Madrid Bombing Probe Finds No al-Qaida Link: Two-Year Investigation Concludes that Terrorists Were Homegrown
Radicals,” Associated Press, March 9, 2006.
70 Andrea Elliott, “Where Boys Grow Up to Be Jihadis,” The New York Times, November 25, 2007; Sebastian Rotella,
“Jihad’s Unlikely Alliance,” Los Angeles Times, Mary 23, 2004; Phil Williams, “In Cold Blood: The Madrid
Bombings,” Perspectives on Terrorism, Vol. 2, No. 9 (2008).
71 Sumita Sarkar and Arvind Tiwari, “Combating Organised Crime: A Case Study of Mumbai City,” Faultlines, Vol.
12, Art. 5 (2002); Gregory F. Treverton et al., Film Piracy, Organized Crime, and Terrorism, RAND Corporation,
2009; “Bad Company: South Asia’s Regional Criminal Organisation,” Jane’s Intelligence Review, August 2009;
Gilbert King, The Most Dangerous Man in the World: Dawood Ibrahim (New York, NY: Camberlain Bros., 2004).
72 Ben Riley and Kathleen Kiernan (Kiernan Group Holdings), eds., The ‘New’ Face of Transnational Criminal
Organizations (TCOs): A Geopolitical Perspective and Implications to U.S. National Security, March 2013.
73 Its state sponsors included Syria, which hosted the group’s leadership, as well as the Soviet Union, Iran, Iraq, and
Greece.

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PKK invested heavily in transnational organized crime activities, such as drug trafficking, arms
smuggling, human smuggling, extortion, money laundering, counterfeiting, and illegal cigarettes.
By the 1990s, the PKK had formed specialized units to variously carry out militant operations,
contraband trafficking, political activities, and information campaigns.74 As a result, some parts of
the PKK appear to behave more like a criminal organization rather than a terrorist or guerrilla
organization.75 According to the U.S. government, many of these criminal activities are centered
in Europe, where there is a significant Kurdish diaspora population. The State Department
designated the PKK as an FTO in October 1997. The PKK was also designated as an SDGT in
2001. For its alleged involvement in drug trafficking, the President designated the PKK as an
SDNTK in May 2008, pursuant to the Foreign Narcotics Kingpin Designation Act.

Revolutionary Armed Forces of Colombia (FARC)

Operational since the 1960s, the FARC has been
described as one of the largest, oldest, most violent, and
best-equipped terrorist organization in Latin America. Its
longevity is due in part to its involvement in the drug
trade. The enormous profit opportunity that drug
trafficking has provided to the FARC is widely viewed
as the driving factor for its involvement in such criminal
activity. According to reports, the FARC first became
involved in the drug trade in the 1980s by levying protection fees on coca bush harvesters, buyers
of coca paste and cocaine base, and cocaine processing laboratory operators in territory under
FARC control. Over time, the FARC took a more direct role in drug production and distribution.
By the 2000s, the FARC had reportedly become the world’s largest supplier of cocaine. The
FARC also reportedly generates revenue from extortion rackets, kidnapping ransoms, and illegal
mining.76 Exploratory peace talks between the Colombian government and the FARC began in
August 2012, the outcome of which may have implications for the FARC’s future involvement in
illicit criminal activities. The State Department designated the FARC as an FTO in October 1997.

74 Abdulkadir Onay, PKK Criminal Networks and Fronts in Europe, The Washington Institute for Near East Policy,
Policy Watch Report No. 1344, February 21, 2008; Vera Eccarius-Kelly, “Surreptitious Lifelines: A Structural
Analysis of the FARC and the PKK,” Terrorism and Political Violence, Vol. 24, No. 2 (2012), pp. 235-258; “Partiya
Karkeren Kurdistan (PKK), Jane’s World Insurgency and Terrorism, August 2012.
75 Since the 2003 U.S.-led invasion of Iraq, the PKK has used safe havens in northern Iraq to coordinate and launch
attacks against Turkish targets. PKK violence also appears to have resurged during the early stages of the “Arab
Spring” and particularly following the outbreak of civil conflict in Syria. Some reports speculate that the Asad regime
and Iran might be providing political and/or material support to these groups.
76 Rex A. Hudson et al., A Global Overview of Narcotics-Funded Terrorist and Other Extremist Groups, Library of
Congress, Federal Research Division, May 2002; Eccarius-Kelly, “Surreptitious Lifelines … ,” 2012; U.S. Department
of State, Country Reports on Terrorism 2011, July 2012. It is also believed to have entered into strategic alliances with
external criminal syndicates and other terrorist organizations. The FARC, for example, reportedly maintains contacts
with Russian, Ukrainian, Croatian, and Jordanian crime families, and armed groups in more than a dozen foreign
countries, for the purposes of supplying the FARC with weapons and communications equipment. The FARC also
allegedly collaborates with other terrorist groups, including Basque Homeland and Freedom (ETA) and a smaller
insurgent group in Colombia, the National Liberation Army (ELN).

Further CRS Reading
For more on the FARC, see CRS Report
RS21049, Latin America: Terrorism Issues, by
Mark P. Sullivan and June S. Beittel, and CRS
Report RL32250, Colombia: Background, U.S.
Relations, and Congressional Interest, by June S.
Beittel.

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Haqqani Network

The family-run Haqqani Network is commonly
described as an insurgent group, in equal measures one
of the Taliban’s most capable militant factions as well as
an enterprising transnational criminal organization.
Headquartered in North Waziristan, Pakistan, this
insurgent group is suspected of conducting major attacks
against allied coalition members of the North Atlantic
Treaty Organization (NATO) and U.S. forces in
Afghanistan as well as active involvement in a wide range of highly profitable licit and illicit
activity. In the 1980s, Jalaluddin Haqqani first gained a reputation as an effective mujahedin
commander and U.S. ally against the Soviet Union. He later joined the Taliban regime in the
1990s when in power in Afghanistan. The group continues to maintain relationships not only with
Al Qaeda and other militant groups in the region, but also purportedly benefits from a relationship
with Pakistan’s Inter-Services Intelligence Directorate (ISI)—a relationship strongly decried by
America’s top ranking military officer in September 2011. As part of a strategy of financial
diversification to ensure the organization’s resiliency against external pressures, the group also
benefits financially from extortion and protection rackets, robbery schemes, kidnapping for
ransom, and contraband smuggling (e.g., drugs, precursor chemicals, timber, and chromite).77 The
Haqqanis also reportedly control licit import-export, transportation, real estate, and construction
firms through which illicit proceeds can be laundered. Pursuant to the Haqqani Network Terrorist
Designation Act of 2012 (P.L. 112-168), the State Department designated the group as an FTO in
September 2012.

Hezbollah

Based in Lebanon, with established cells in Africa,
North and South America, Asia, and Europe, Hezbollah
is known to have or suspected of having been involved
in terrorist attacks against U.S. interests worldwide.
Although primarily funded and trained with support
from state sponsors, chiefly Iran, Hezbollah also
reportedly benefits from a sprawling global commercial network of licit and illicit businesses,
largely connected to expatriate Lebanese communities worldwide.78 Sources of funds include
private donors and large-scale investments in legitimate businesses. Criminal indictments and
statements by U.S. officials and other experts suggest that Hezbollah has also become well-
integrated in the domain of transnational organized crime, deriving profits from a wide range of
illicit enterprises, such as drug trafficking, precursor chemical trafficking, counterfeit

77 David Rhode, “Held By the Taliban,” The New York Times, November 17, 2009; Jeffrey A. Dressler, The Haqqani
Network: From Pakistan to Afghanistan, Institute for the Study of War, Afghanistan Report No. 6, October 2010;
Alissa Rubin and James Risen, “Costly Afghanistan Road Project is Marred by Unsavory Alliances,” The New York
Times, May 1, 2011; Mark Mazzetti, Scott Shane, and Alissa J. Rubin, “Brutal Haqqani Crime Clan Bedevils U.S. in
Afghanistan,” The New York Times, September 24, 2011; Peters, Haqqani Network Financing: The Evolution of an
Industry, CTC at West Point, harmony project, July 2012; U.S. Department of State, Report to Congress as Required
by The Haqqani Network Terrorist Designation Act of 2012, September 7, 2012; U.S. Congress, House Committee on
Foreign Affairs, Subcommittee on Terrorism, Nonproliferation, and Trade, Combating the Haqqani Terrorist Network,
112th Cong., 2nd sess., September 13, 2012.
78 U.S. Department of State, Country Reports on Terrorism 2011, July 2012.

Further CRS Reading
For more information on Haqqani Network
attacks, background, and political
implications, see CRS Report R41832,
Pakistan-U.S. Relations, by K. Alan Kronstadt,
and CRS Report RL30588, Afghanistan: Post-
Taliban Governance, Security, and U.S. Policy, by
Kenneth Katzman.

Further CRS Reading
For more on Hezbollah, see CRS Report
R41446, Hezbollah: Background and Issues for
Congress, by Casey L. Addis and Christopher
M. Blanchard.

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pharmaceutical trafficking, sales of counterfeit commercial goods and electronics, auto theft and
fraudulent re-sale, diamond smuggling, cigarette and baby formula smuggling, credit card fraud,
and insurance scams, among potentially many others.79 Pursuant to EO 12947, Hezbollah was
designated in January 1995 as a specially designated terrorist (SDT). The State Department
designated Hezbollah as an FTO in 1997. In October 2001, Hezbollah was also designated as an
SDGT pursuant to EO 13224.

Foreign Policy Responses
With recognition that every crime-terrorism partnering circumstance will be different and the
tools to identify and address such concerns may change, a wide range of anti-crime and
counterterrorism policy options can be considered. The variety of options available, however, also
challenges policymakers to consider several key questions in formulating responses. Should a
specific agency or an interagency coordinating body be designated as leading U.S. government
responses to crime-terrorism threats? Under what circumstances would U.S. responses to crime-
terrorism threats be most appropriately led by the intelligence community, military, diplomatic
corps, or law enforcement agencies? How can resources and authorities be allocated and managed
to avoid excessive duplication while also ensuring effective policy response coverage?

The following sections describe selected key foreign policy responses to crime-terrorism nexus
threats and related policy considerations for Congress for each response. These may be applied in
various combinations or sequences, depending on the specific circumstances.

Diplomacy
U.S. diplomatic efforts to promote anti-crime and counterterrorism goals occur through bilateral,
regional, and multilateral mechanisms. Such efforts are often led by the U.S. Department of State
and include initiatives developed by its regional bureaus, the Bureau for International Narcotics
and Law Enforcement Affairs (INL), and the Bureau of Counterterrorism (CT). Relevant U.N.
treaties to which the United States is party to include the International Convention Against the
Taking of Hostages, International Convention for the Suppression of Terrorist Bombings,
International Convention for the Suppression of the Financing of Terrorism, U.N. Convention
against Transnational Organized Crime, and International Convention for the Suppression of Acts

79 In one example of Hezbollah-linked crime-terrorism activity within the United States, a group of individuals in
Pennsylvania, purportedly at the request of a member of Hezbollah’s political bureau in Beirut, Lebanon, sought to
provide material support to Hezbollah in the form of weapons as well as counterfeit and stolen cash generated from
trafficking in a wide range of counterfeit goods, such as fake passports, cell phones, computers, gaming systems, cars,
and designer sports jerseys. See DOJ, “Four Indicted for Conspiring to Support Hizballah; Six Others Charged with
Related Crimes,” press release, November 24, 2009; Hitha Prabhakar, Black Market Billions: How Organized Retail
Crime Funds Global Terrorists (Upper Saddle River, NJ: FT Press, 2012); Prepared testimony of Washington Institute
for Near East Policy Director of the Stein Program on Counterterrorism and Intelligence Matthew Levitt, in U.S.
Congress, House Homeland Security Committee, Iran, Hezbollah, and the Threat to the Homeland, 112th Cong., 2nd
sess., March 21, 2012. See also U.S. Department of State, Country Reports on Terrorism 2012, May 2013; Rabasa et
al., “Chapter Seven: The Convergence of Terrorism … ,” 2006; Doug Farah, Hezbollah’s External Support Network in
West Africa and Latin America, International Assessment and Strategy Center, August 4, 2006; Prepared testimony of
U.S. Department of State Principal Deputy Coordinator of the Office of the Coordinator for Counterterrorism Frank C.
Urbancic, Jr., in U.S. Congress, House Committee on International Relations, Subcommittee on International Terrorism
and Nonproliferation and Subcommittee on Middle East and Central Asia, Hizballah’s Global Reach, Serial No. 109-
233, 109th Cong., 2nd sess., September 28, 2006.

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of Nuclear Terrorism. Through the U.N. Security Council, the United States also participates in
the Security Council Sanctions Committee. The Sanctions Committee administers and enforces a
range of sanctions and targeted measures against Al Qaeda and the Taliban, among others, which
include arms embargoes, travel bans, asset freezes, and diplomatic restrictions.

Bilaterally, the U.S. government maintains mutual legal assistance treaties (MLATs) and
extradition agreements with foreign countries to facilitate transnational investigations and
information sharing. Other options available to the State Department include designating entities
as FTOs, pursuant to the Immigration and Nationality Act (INA), as amended, and barring known
foreign terrorists and transnational organized criminals from entry into the United States and
providing grounds to remove and deport such individuals if in the United States, pursuant to
several visa ineligibility conditions.80 (See text box below for more on a recent FTO designation,
the Haqqani Network.) Additionally, the U.S. Department of the Treasury’s Office of Terrorist
Financing and Financial Crimes (TFFC) leads the U.S. delegation in meetings of the Financial
Action Task Force (FATF), an international body that develops global regulatory standards for
combating money laundering and terrorist financing.

Congress has provided direction to relevant federal departments to conduct diplomatic activities
to address crime-terrorism issues by enacting legislation that authorizes and appropriates funds to
relevant agencies to perform such tasks, as well as by conducting program oversight through
hearings and reporting requirements. Given the inherently transnational nature of many current
crime-terrorism challenges, diplomacy often plays a central role in responses. The extent to which
diplomacy can be effective in combating crime-terrorism threats, however, is limited by delays
associated with achieving consensus agreements and potentially long-lasting gaps in foreign
political will and capacity.

80 For further discussion of criminal aliens, see CRS Report RL32480, Immigration Consequences of Criminal Activity,
by Michael John Garcia. Pursuant to authorities under the INA, as amended, President Obama issued Presidential
Proclamation (PP) 8693, which elaborated on existing travel prohibitions against specially designated terrorists and
transnational organized criminals. See President Barack Obama, “Proclamation 8693 of July 24, 2011: Suspension of
Entry of Aliens Subject to United Nations Security Council Travel Bans and International Emergency Economic
Powers Act Sanctions,” Federal Register, Vol. 76, No. 144, pp. 44751-44755.

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Designating the Haqqani Network
As discussed above, the Haqqani Network is a militant faction of the Taliban, whose insurgent activities include acts of
terrorism as well as extensive involvement in transnational criminal activity. Although several senior members of the
group had previously been listed by the Treasury Department as SDGTs, the Haqqani Network was not designated
an FTO until September 2012. Congress contributed to its designation as an FTO with the passage of the Haqqani
Network Terrorist Designation Act 2012 (S. 1959/H.R. 6036). Enacted on August 10, 2012 (P.L. 112-168), the act
established that it was the sense of Congress that the Haqqani Network met the criteria for designation as an FTO
pursuant to Section 219 of the Immigration and Nationality Act (INA) and that the Secretary of State should designate
the group as such. The act required that the Secretary of State report to appropriate congressional committees
within 30 days of enactment of the act with a detailed report on whether the Haqqani Network fit the description of
FTOs. On September 7, 2012, the State Department transmitted its report to Congress, concluding that the Haqqani
Network met the criteria for designation as an FTO: according to the State Department, it is a “foreign organization
that engages in terrorism” and that its terrorist activity “threatens the security of U.S. nationals and the national
security of the United States.”

Foreign Assistance
Several U.S. departments and agencies administer programs to train foreign law enforcement
officials and other security forces; develop legal frameworks in partner nations to criminalize and
combat various crime-, drug-, and terrorism-related activities; and support institutional capacity
building for foreign internal security and border enforcement entities. U.S. foreign assistance
efforts to combat international terrorism or transnational crime can have mutually beneficial
implications. In cases of crime-terrorism confluence, some have cautioned that an increasingly
blurred line between counterterrorism and anti-crime assistance could reduce foreign aid
transparency and raise additional challenges in planning and coordinating projects to avoid
redundancy. In some cases, foreign development aid may also risk unintentionally providing
illicit groups with an additional source of funding. In regions where known crime-terrorist groups
are known to operate, such as Afghanistan, funds intended for development projects have at times
benefited illicit groups, who offer development contractors with security and protection
services.81

Most U.S. foreign police assistance is administered through the U.S. Departments of State and
Defense, and programs are variously implemented by other U.S. agencies and federal contractors
in host nations. In some situations, the U.S. government may be requested to support foreign
militaries in their efforts to combat crime-terrorism threats, such as the FARC in Colombia or the
Taliban in Afghanistan. In addition to U.S.-funded foreign security forces support efforts, the U.S.
Agency for International Development (USAID) is often involved in developing related justice
sector and rule of law assistance programs. DOJ maintains in-house expertise through its Office
of Overseas Prosecutorial Development Assistance and Training (OPDAT) and International
Criminal Investigative Training Assistance Program (ICITAP) to implement capacity building
projects that support foreign countries investigate and prosecute cases involving transnational
crime and international terrorism. U.S. federal prosecutors may serve as Resident Legal Advisors
(RLAs) overseas to support related justice sector training, institution building, and legislative
drafting.

81 For one example in Afghanistan that may have resulted in development aid diverted to the Haqqani Network among
other local militant groups, see Alissa J. Rubin and James Risen, “Costly Afghanistan Road Project is Marred by
Unsavory Alliances,” The New York Times, May 1, 2011.

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Congress has played an active role in establishing the scope and amount of U.S. assistance that
can be provided for the purposes of counterterrorism and anti-crime. Specific authorities are
outlined in the Foreign Assistance Act of 1961, as amended, Title 10 of the U.S. Code, and
periodic National Defense Authorization Acts. Additional conditions may also be included in
appropriations acts for the various agencies involved in administering foreign assistance for
counterterrorism and anti-crime.

Financial Actions
Several unilateral and multilateral policy mechanisms are available to block transactions and
freeze assets of specified terrorist or criminal entities, as well as to strengthen international
financial systems through enhanced regulatory requirements. Unilaterally, the Treasury
Department’s Office of Foreign Assets Control (OFAC) administers and enforces unilateral
targeted financial sanctions against a list of foreign entities and individuals (specially designated
nationals, or SDNs) that include SDGTs, FTOs, Middle Eastern terrorist organizations found to
undermine and threaten Middle East peace process efforts (specially designated terrorists, or
SDTs), transnational criminal organizations (TCOs), and specially designated narcotics traffickers
and trafficking kingpins (SDNTs and SDNTKs). Authorities for OFAC to designate such entities
are derived from executive order and legislative statutes, which include the International
Emergency Economic Powers Act (EEPA), the Antiterrorism and Effective Death Penalty Act of
1996 (AEDPA), and the Foreign Narcotics Kingpin Designation Act.

Additionally, Title II of the USA PATRIOT ACT of 2001 (P.L. 108-56, as amended) introduced
several policy tools that strengthened the existing U.S. framework to combat illicit finance.
Among other provisions, this act developed a procedure, popularly known as Section 311, to
apply enhanced regulatory requirements, called “special measures,” against designated
jurisdictions, financial institutions, and international transactions that are found to be involved in
criminal or terrorist financing activities.82 At the multilateral level, the United Nations administers
several sanctions programs to freeze funds related to persons involved in acts of terrorism,
including individuals and entities associated with Al Qaeda and the Taliban, pursuant to U.N.
Security Council Resolution 1373 (2001), U.N. Security Council Resolution 1267 (1999), and
U.N. Security Council Resolution 1988 (2011).

Many observers have argued that a key tool to combat the confluence of crime and terrorism is to
follow their overlapping money trails and apply financial sanctions and heightened regulatory
conditions to vulnerable financial sectors. Both types of groups require funds to sustain
operations, and such funds often intersect with the formal international banking system. Critics of
such tools to counter illicit financial transaction suggest that they are often laborious and time-
intensive to implement, and not necessarily effective in dismantling crime or terrorism networks.
Policymakers have acknowledged that criminals and terrorists continue to exploit opportunities to
move funds and hide their financial tracks in multiple ways: in the formal financial system;
through centuries-old techniques such as bulk cash smuggling, trade-based money laundering,
and hawala-type informal value transfer systems; and through modern technologies such as pre-
paid cards, mobile banking systems, and the Internet.

82 Also highlighting the Treasury Department’s awareness in the aftermath of September 11 that both criminals and
terrorists seek to exploit the international financial system, it established in 2004 the Office of Intelligence and Analysis
(OIA), now a formal member of the intelligence community.

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Intelligence
Although few details are publicly available about the intelligence community’s role in combating
crime-terrorism threats, intelligence can play a significant role in developing strategic analyses
that prioritize crime-terrorism trends of national security significance, as well as in developing
operational and tactical responses to detect, influence, and target specific crime-terrorism
networks, nodes, plans, and actors. The 2009 National Intelligence Strategy described the nexus
between terrorism and criminal activities as among the intelligence community’s priorities.

In the past, some have suggested that there appeared to be limited, if any, systematic gathering of
intelligence related to the nexus between crime and terrorism and, as a result, an incomplete
understanding of the scope and nature of relationships between and convergence among terrorists
and criminal actors. The Obama Administration’s 2011 Strategy to Combat Transnational
Organized Crime acknowledged that “a shift in U.S. intelligence collection priorities” since 9/11
resulted in “significant gaps” related to transnational organized crime.83 The 2011 Strategy also
identified the enhancement of “U.S. intelligence collection, analysis, and counterintelligence” on
transnational organized crime as “a necessary first step.” Since 9/11, numerous bills have
addressed terrorism as well a transnational crime-related issues. Similarly, a number of
congressional hearings have focused on issues relating to international terrorism and transnational
crime. Some observers suggest that heightened congressional focus on the confluence of crime
and terrorism may have an impact on the executive branch’s approach to the issue and
appreciation for the risks and vulnerabilities associated with crime-terrorism partnering
arrangements.

Military Actions
In some cases, particularly in non-permissive security environments in which traditional law
enforcement units may have difficulty operating, the U.S. military has been called upon to
contribute to certain joint counternarcotics and counterterrorism or counterinsurgency activities.
In 2002, for example, Congress first authorized DOD to support a “unified campaign against
narcotics trafficking … [and] activities by organizations designated as terrorist organizations such
as the Revolutionary Armed Forces of Colombia (FARC), the National Liberation Army (ELN),
and the United Self-Defense Forces of Colombia (AUC).”84 Although Congress renewed this
authority through FY2012 in the National Defense Authorization Act for Fiscal Year 2012 (P.L.
112-81), it has not been codified and is limited only to activities in Colombia. Military operations
in Afghanistan provide another example in which DOD has taken an expanded approach to crime-
terrorism nexus issues. In late 2008, DOD amended its rules of engagement in Afghanistan to
allow U.S. military commanders to target drug traffickers and others who provide material
support to insurgent or terrorist groups such as the Taliban and members of hybrid crime-
terrorism groups such as the Haqqani Network.85 DOD further clarified that the U.S. military may
accompany and provide force protection in counternarcotics field operations.86 In some cases, the

83 Obama Administration, Strategy to Combat Transnational Organized Crime, July 2011.
84 Section 305 of P.L. 107-206.
85 James Risen, “U.S. to Hunt Down Afghan Drug Lords Tied to Taliban,” The New York Times, August 9, 2009.
86 GAO, Afghanistan Drug Control: Strategy Evolving and Progress Reported, but Interim Performance Targets and
Evaluation of Justice Reform Efforts Needed, GAO-10-291, March 2010.

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U.S. military has chosen to take lethal action to rescue or attempt to rescue hostages in
kidnapping for ransom situations.87

U.S. military involvement in situations where there are overlaps between anti-crime and
counterterrorism goals is not necessarily warranted or desired. In some situations, political
sensitivities and rules of engagement may prevent or prohibit the U.S. Armed Forces from direct
involvement. Some observers caution that militarized counternarcotics or anti-crime policies may
risk escalating suppression tactics and contribute to violations of human rights.

Investigations
Various elements of the U.S. Departments of Justice (DOJ) and the Department of Homeland
Security (DHS) are tasked with investigating cases that involve alleged prohibited acts related to
international terrorism and transnational crime. These include the U.S. Federal Bureau of
Investigation (FBI), the U.S. Drug Enforcement Administration (DEA), the International
Organized Crime Intelligence and Operations Center (IOC-2), and Immigration and Customs
Enforcement (ICE). The State Department, DOD, and FBI also publicize rewards programs for
citizen tips that lead to the apprehension of selected high-profile perpetrators of transnational
organized crime, including money launderers, human traffickers, and drug traffickers, as well as
terrorists.88

Some observers see the nexus between crime and terrorism as a potential benefit for detection and
law enforcement prosecution that could be further exploited. Even if prosecutors do not have
sufficient evidence to convict a suspected terrorist of terrorism-related charges, other criminal
charges may be effectively used. Furthermore, some criminal charges, such as violations related
to drug trafficking, can lead to jail sentences and penalties similar in magnitude to terrorism ones.
It remains unclear, however, how effective such law enforcement and prosecution approaches
have been to combat terrorism or how frequently such strategies have been implemented in
practice, both in the United States and among partner nations, due to the lack of consistency in
tracking cases with crime-terrorism nexus connections. Congress may have an interest in
assessing how existing statutes have been used to support investigative and prosecution-related
activities in response to entities suspected of engaging in terrorism-crime partnering activities.
Assessing investigative, prosecution, and sentencing data collected in the 11 years since the
attacks of 9/11 may provide Congress with information regarding statutes that have been
effectively used to address crime-terrorism partnering activities and areas where additional
legislative assistance might be required.

87 In January 2012, for example, U.S. special forces reportedly rescued two hostages in Somalia, killing all nine
kidnappers. In another instance, from February 2011, U.S. special forces attempted to rescue four hostages off the coast
of Somalia, but their captors, reportedly Somali pirates, killed or fatally wounded all four before they could be rescued.
Jeffrey Gettleman, Eric Schmitt, and Thom Shanker, “U.S. Swoops in to Free 2 from Pirates in Somali Raid,” The New
York Times, January 25, 2012; Adam Nagourney and Gettleman, “Pirates Brutally End Yachting Dream,” The New
York Times, February 22, 2011.
88 In early January 2013, the 112th Congress enacted the Department of State Rewards Program Update and Technical
Corrections Act of 2012 (P.L. 112-283). Prior to its enactment, the State Department’s rewards programs were limited
to offering payments for information leading to the arrest or conviction of individuals involved in major narcotics
trafficking or international terrorism.

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Investigation and Enforcement of International Narcoterrorism Cases
Section 122 of the USA PATRIOT Improvement and Reauthorization Act of 2005 (P.L. 109-177) added a new
prohibition against narco-terrorism with enhanced criminal penalties. This provision, codified at 21 U.S.C. 960a,
makes it a violation of U.S. law to engage in narcotics-related crimes anywhere in the world while knowing,
conspiring, or intending to provide support, directly or indirectly, for a terrorist act or to a terrorist organization. In
order to pursue these complex, transnational narco-terrorism cases against high-level, often foreign or foreign-
located targets, DEA established the Counter-Narco-Terrorism Operations Center within its Special Operations
Division (SOD) to manage its worldwide activities. In some countries, such as in Afghanistan, narco-terrorism
operations are implemented on the ground through Foreign-Deployed Advisory and Support Teams (FAST) that
collaborate on joint investigations together with host country counterparts.

There have been several publicly reported investigations and prosecutions involving alleged violations of 21 U.S.C.
960a. Such cases have involved individuals allegedly affiliated with groups, such as the Taliban, the United Self-Defense
Forces of Colombia (AUC), Al Qaeda, Hezbollah, and the FARC.

International narco-terrorism prosecutions appear to have gained prominence since enactment of the USA PATRIOT
Improvement and Reauthorization Act of 2005. For example, the Office of the U.S. Attorney for the Southern
District of New York internally restructured its organizational units in January 2010 and merged its Terrorism and
National Security Unit with its International Narcotics Trafficking Unit. This internal reorganization was designed to
facilitate greater coordination with DEA on narco-terrorism cases. Explaining the apparent increased emphasis on
narco-terrorism, the U.S. Attorney for the Southern District of New York stated:

Since January 2010, this Office, in partnership with the DEA, has focused its attention even more
closely on the serious threat that narco-terrorism poses to our national security. Combating the
lethal nexus of drug trafficking and terrorism requires a bold and proactive approach. And as crime
increasingly goes global, and national security threats remain global, the long arm of the law has to get
even longer.89

Meanwhile, some observers have raised questions about the implementation of 21 U.S.C. 960a and related statutes in
practice. Some have questioned whether the U.S. government approach to investigating and, ultimately, prosecuting
individuals under 21 U.S.C. 960a sufficiently targets the most significant foreign drug and terrorism threats to U.S.
interests.90 Others question whether pursuit of foreign narco-terrorism suspects overseas and subsequent
prosecution in U.S. courts is the most appropriate policy tool choice.

Looking Ahead: Implications for Congress
Policy issues related to the interaction of international crime and terrorism are inherently
complex. While the U.S. government has maintained substantial long-standing efforts to combat
terrorism and transnational crime separately, questions remain about how and whether issues
related to the interaction of the two threats are handled most effectively across the multiple U.S.
agencies involved. Efforts to combat transnational crime can result in positive and negative
outcomes with counterterrorism policies, raising fundamental questions about how to prioritize
combating crime or terrorism aspects of a case when both elements are present. Further, questions
remain on how links between terrorist-criminal activity and potentially related U.S. polices—

89 DOJ, “United States v. Henareh, et al., and Taza Gul Alizai,” prepared remarks for U.S. Attorney Preet Bharara, July
26, 2011.
90 See, for example, John E. Thomas, Jr. “Narco-Terrorism: Could the Legislative and Prosecutorial Responses
Threaten Our Civil Liberties?” Washington and Lee Law Review, Vol. 66 (2009), pp. 1881-1920; Johnny Dwyer, “The
DEA’s Terrorist Hunters: Overreaching Their Authority?,” Time Magazine, August 8, 2011; Benjamin Weiser, “For
Prosecutors in New York, A Global Beat,” The News York Times, March 28, 2011; Mike Scarcella, “Define Narco-
Terrorist; The DEA’s Expanded Enforcement Power Faces its First Appellate Case,” The National Law Journal,
November 21, 2011.

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including but not limited to WMD proliferation, cyber security, post-conflict reconstruction
efforts, and counterinsurgency—are integrated across agencies.

Since the September 11 attacks, Congress has enacted several landmark bills that have given the
U.S. government greater authority and additional tools to counter the convergence of organized
crime and terrorism. Less than six weeks after the attack, Congress enacted the USA PATRIOT
Act (P.L. 107-56) to strengthen the U.S. government’s ability to detect, report, and prevent
terrorist activities, including potential connections between organized crime and terrorism.91
Additionally, Congress enacted the Intelligence Reform and Terrorism Prevention Act of 2004
(P.L. 108-458) and the USA PATRIOT Improvement and Reauthorization Act of 2005 (P.L. 109-
177), which further enhanced U.S. government efforts to crack down on terrorist financing and
money laundering.92

Based on recent U.S. assessments, transnational crime and international terrorism appear to
intersect and overlap in ways that will, at times, affect U.S. national interests. To this end,
Congress may choose to continue to evaluate existing approaches and programs to combat the
confluence of crime and terrorism through hearings and requesting or legislating reports to be
issued by relevant executive branch agencies and inspector general offices. Congress may also
choose to modify, adapt, or enhance existing legislative authorities and mandates to target various
dimensions of the problem. Such approaches may be region- or group-specific, or global in scope.

More broadly, as policymakers consider the crime-terrorism nexus issue and relevant policy
responses, key questions for Congress may include the following:

• What is the scope of the crime-terrorism issue? What types of crimes are
involved? Which groups and actors of both kinds pose the greatest threat to U.S.
national security?

• What political, social, economic, geographic, and demographic circumstances
facilitate the interaction between transnational crime and international terrorism?

• Has the United States successfully exploited the partnering arrangements and
differences in motivations and capabilities of terrorist groups and criminal
organizations? If so, what lessons learned could apply to current and future
activities by such actors?

• What prevents the U.S. government and international community from disrupting
and dismantling current crime-terrorism threats?

91The PATRIOT Act, for example, stiffened money laundering penalties, granted the Secretary of the Treasury new
powers, established mechanisms to report money laundering transactions through private banks, permitted the transfer
of financial records among agencies if relevant to intelligence activities, created Federal jurisdiction over foreign
money launderers, and made licensed money senders, including informal hawala networks, subject to mandatory
reports on transactions.
92 Among other provisions, the Intelligence Reform and Terrorism Prevention Act of 2004 expanded the authority and
tools of the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN), directed the Secretary of
the Treasury to prescribe regulations requiring financial institutions to report certain cross-border money transfers, and
directed the president to submit to Congress a report evaluating U.S. efforts to curtail international financing of
terrorism. Pertaining to potential crime-terrorism connections, the USA PATRIOT Improvement and Reauthorization
Act of 2005 increased penalties for terrorism financing, expanded the purview of the Racketeer Influenced and Corrupt
Organizations (RICO) Act (P.L. 91-452), broadened the parameters of money laundering offenses, and made the
receipt of military training from a foreign terrorist organization a predicate to a money laundering offense.

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• Which federal government entities have the lead roles for addressing various
aspects of the crime-terrorism phenomenon?

• How are government funds being spent to address concerns about crime-
terrorism links?

• Is there a need to expand or adjust existing congressional authorities to combat
the combined crime-terrorism threat? Are the available U.S. foreign policy tools
sufficient to meet today’s crime-terrorism concerns—and are such tools
effectively implemented? If not, what can be improved?

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Appendix. Terrorist Links to Criminal Financing
The following table summarizes the State Department’s descriptions of how current foreign
terrorist organizations (FTOs) raise funds and whether, if at all, an FTO is involved in criminal
activities as a source of revenue. Among the 51 FTOs described in the State Department’s most
recent Country Reports on Terrorism (from May 2013), sources of funding vary. Common
sources of funding include, in various combination, state sponsors, private donors, other terrorist
groups, legitimate business activity, proceeds of crime. Popular forms criminal financing include
extortion, kidnapping for ransom, drug trafficking, robbery, human smuggling, weapons
smuggling, other contraband smuggling, money laundering, bank fraud, credit card fraud,
cybercrime, immigration fraud, passport falsification, and illegal charcoal production. For 9 of the
51 FTOs, the State Department reports that funding sources and mechanisms are “unknown.”

Table A-1. Foreign Terrorist Organization (FTOs): Reported Sources of External Aid
based on the State Department’s 2012 Country Reports on Terrorism (2013)

Foreign
Terrorist

Organization Abbreviation
Designation

Date
Criminal

Financing? Additional Description of Sources of Support

Revolutionary
Organization 17
November

17N October 8,
1997

Funding and external aid are “unknown.”

Asbat al-Ansar AAA March 27,
2002

“It is likely that the group receives money through international
Sunni extremist networks.”

Abdallah Azzam
Brigades

AAB May 30, 2012 Funding and external aid are “unknown.”

Al-Aqsa Martyrs
Brigade

AAMB March 27,
2002

“Iran has exploited AAMB’s lack of resources and formal
leadership by providing funds and guidance, mostly through
Hizballah facilitators.”

Ansar Al-Islam AI March 22,
2004

“AI receives assistance from a loose network of associates in
Europe and the Middle East.”

Al-Shabaab March 18,
2008

Yes “Al-Shabaab continued to have sufficient financing available…. ”
Sources include “funds from illegal charcoal production and
exports from smaller ports along the coast, taxation of local
populations and areas under al-Shabaab control, and foreign
donations.” It also receives “significant donations from the global
Somali diaspora….”

Abu Nidal
Organization

ANO October 8,
1997

“The ANO’s current access to resources is unclear, but it is likely
that the decline in support previously provided by Libya, Syria, and
Iran has had a severe impact on its capabilities.”

Army of Islam AOI May 19, 2011 Yes “AOI receives the bulk of its funding from a variety of criminal
activities in Gaza.”

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Foreign
Terrorist
Organization Abbreviation
Designation
Date
Criminal
Financing? Additional Description of Sources of Support

Al-Qa’ida AQ October 8,
1999

“AQ primarily depends on donations from like-minded supporters
as well as from individuals who believe that their money is
supporting a humanitarian cause. Some funds are diverted from
Islamic charitable organizations.” Additionally, as previous
opportunities “for receiving and sending funds have become more
difficult to access, several affiliates have engaged in kidnapping for
ransom. Through kidnapping for ransom operations and other
criminal activities, the affiliates have also increased their financial
independence.” AQ and Hizballah sympathizers located in South
America and the Caribbean “continued to provide financial and
ideological support ….”

Al-Qa’ida in the
Arabian
Peninsula

AQAP January 10,
2010

Yes “AQAP’s funding primarily comes from robberies and kidnap for
ransom operations and to a lesser degree from donations from
like-minded supporters.”

Al-Qa’ida in Iraq AQI December
17, 2004
(amended
December
11, 2011)

Yes “AQI receives most of its funding from a variety of businesses and
criminal activities within Iraq.”

Al-Qa’ida in the
Islamic Maghreb
(formerly the
Salafist Group
for Call and
Combat)

AQIM
(formerly
GSPC)

March 27,
2002
(amended
February 20,
2008)

Yes “AQIM members engaged in kidnapping for ransom and criminal
activities to finance their operations.” Kidnapping operations,
which typically targeted those with an “established pattern of
making concessions in the form of ransom payments … ”,
reportedly “continued to yield significant sums for AQIM…. ”
Additionally, “Algerian expatriates and AQIM supporters abroad –
many residing in Western Europe – may also provide limited
financial and logistical support.”

Abu Sayyaf
Group

ASG October 8,
1997

Yes “The ASG is funded through kidnapping for ransom operations and
extortion, and many also receive funding from external sources
such as remittances from overseas Philippines workers and Middle
East-based violent extremists. In the past, the ASG has also
received assistance from regional terrorist groups such as Jemaah
Islamiya, whose operatives provided training to ASG members and
helped facilitate several ASG terrorist attacks.”

United Self-
Defense Forces
of Colombia

AUC September
10, 2001

Yes “As much as 70 percent of the AUC’s paramilitary operations
costs were financed with drug-related earnings. Some former
members of the AUC never demobilized or are recidivists, and
these elements have continued to engage heavily in criminal
activities.”

Aum Shinrikyo AUM October 8,
1997

“Funding primarily comes from member contributions.”

Continuity Irish
Republican Army

CIRA July 13, 2004 Yes “CIRA supported its activities through criminal activities, including
smuggling.” The group carries out “bombings, assassinations,
kidnappings, hijackings, extortion, and robberies.”

Communist
Party of the
Philippines /
New People’s
Army

CPP/NPP August 9,
2002

Yes “The CPP/NPA raises funds through extortion.”

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Foreign
Terrorist
Organization Abbreviation
Designation
Date
Criminal
Financing? Additional Description of Sources of Support

Revolutionary
People’s
Liberation
Party/Front

DHKP/C October 8,
1997

Yes “The DHKP/C finances its activities chiefly through donations and
extortion and raises funds primarily in Europe.”

Revolutionary
Struggle

EA May 18, 2009 Funding and external aid are “unknown.”

National
Liberation Army

ELN October 8,
1997

Yes “The ELN draws its funding from the narcotics trade and from
extortion of oil and gas companies. Additional funds are derived
from kidnapping ransoms. There is no known external aid.”

Basque
Fatherland and
Liberty

ETA October 8,
1997

“ETA is probably experiencing financial shortages given that the
group announced publicly in September 2011 that it had ceased
collecting ‘revolutionary taxes’ from Basque businesses. This
extortion program was a major source of ETA’s income.”

Revolutionary
Armed Forces of
Colombia

FARC October 8,
1997

Yes “Today, it only nominally fights in support of Marxist goals, and is
heavily involved in narcotics production and trafficking…. The
FARC has well-documented ties to the full range of narcotics
trafficking activities, including extortion, cultivation, and
distribution.” Some human smuggling in the Darien Region of
Panama was “facilitated by FARC elements operating on both sides
of the border.”

Moroccan
Islamic
Combatant
Group

GICM October 11,
2005

Yes “In the past, GICM has been involved in narcotics trafficking in
North Africa and Europe to fund its operations.”

Hamas October 8,
1997

Yes “Hamas receives funding, weapons, and training from Iran. In
addition, the group raises funds in the Persian Gulf countries and
receives donations from Palestinian expatriates around the world,
through its charities, such as the umbrella fundraising organization,
the Union of Good. Some fundraising and propaganda activity also
takes place in Western Europe.” Hamas, among others, “smuggled
weapons, cash, and other contraband into Gaza through an
extensive network of tunnels from Egypt.” The group is also
known to “retain a cadre of leaders and facilitators that conduct
political, fundraising, and arms-smuggling activities throughout the
region.”

Hizballah October 8,
1997

Yes “Iran continues to provide Hizballah with training, weapons, and
explosives, as well as political, diplomatic, monetary, and
organizational aid; Syria furnished training, weapons, diplomatic,
and political support. Hizballah also receives funding from private
donations and profits from legal and illegal businesses. Hizballah
receives financial support from Lebanese Shia communities in
Europe, Africa, South America, North America, and Asia. As
illustrated by the Lebanese Canadian bank case, Hizballah
supporters are often engaged in a range of criminal activities that
benefit the group financially. These have included smuggling
contraband goods, passport falsification, trafficking in narcotics,
money laundering, and credit card, immigration, and bank fraud.”
AQ and Hizballah sympathizers located South American and
Caribbean “continued to provide financial and ideological
support…. ”

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Foreign
Terrorist
Organization Abbreviation
Designation
Date
Criminal
Financing? Additional Description of Sources of Support

Haqqani
Network

HQN September
19, 2012

Yes HQN draws strength through cooperation with other terrorist
organizations operating in Afghanistan, including the Afghan
Taliban, al-Qa’ida, Tehrik-e Taliban Pakistan, the Islamic Movement
of Uzbekistan, Lashkar-e Jhangvi, and Jaish-e Mohammad.” In
addition to such cooperative support, “HQN receives much of its
funds from donors in Pakistan and the Gulf, as well as through
criminal activities such as kidnappings, extortion, smuggling, and
other licit and illicit business ventures.”

Harakat-ul Jihad
Islami

HUJI August 6,
2010

Funding and external aid are “unknown.”

Harakat ul-Jihad-
i-
Islami/Bangladesh

HUJI-B March 5,
2008

“HUJI-B funding comes from a variety of sources. Several
international Muslim NGOs may have funneled money to HUJI-B
and other Bangladeshi militant groups.”

Harakat ul-
Hujahideen

HUM October 8,
1997

“HUM collects donations from wealthy and grassroots donors in
Pakistan. HUM’s financial collection methods include soliciting
donations in magazine advertisements and pamphlets.”

Gama’a Al-
Islamiyya

IG October 8,
1997

Funding and external aid are “unknown.”

Islamic Jihad
Union

IJU June 17, 2005 Funding and external aid are “unknown.”

Islamic
Movement of
Uzbekistan

IMU September
20, 2000

“The IMU receives support from a large Uzbek diaspora, terrorist
organizations, and donors from Europe, Central and South Asia,
and the Middle East.”

Indian
Mujahedeen

IM September
19, 2011

“Suspected to obtain funding and support from other terrorist
organizations, such as LeT and HUJI, and from sources in Pakistan
and the Middle East.”

Jemaah Ansharut
Tauhid

JAT March 13,
2012

Yes “JAT raises funds through membership donations, as well as bank
robberies, cyber hacking, and other illicit activities; and legitimate
business activities such as operating bookstores and other shops.”
Bank robberies and other illicit activities are carried out “to fund
the purchase of assault weapons, ammunition, explosives, and
bomb-making materials.”

Jaish-e-
Mohammed

JEM December
26, 2001

JEM “collects funds through donation requests in magazines and
pamphlets, sometimes using charitable causes to solicit donations.”
Since 2007, “JEM has withdrawn funds from bank accounts and
invested in legal businesses, such as commodity trading, real estate,
and production of consumer goods.”

Jemaah Islamiya JI October 23,
2002

Yes “Investigations have indicated that JI is fully capable of its own
fundraising through membership donations and criminal and
business activities. It has received financial, ideological, and
logistical support from Middle Eastern contacts and NGOs.”

Jundallah November 4,
2010

Funding and external aid are “unknown.”

Kahane Chai October 8,
1997

“Receives support from sympathizers in the United States and
Europe.”

Kata’ib Hizballah KH July 2, 2009 “KH is almost entirely dependent on support from Iran and
Lebanese Hizballah.”

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Foreign
Terrorist
Organization Abbreviation
Designation
Date
Criminal
Financing? Additional Description of Sources of Support

Lashkar e-
Tayyiba

LeT December
26, 2001

“LeT collects donations in Pakistan and the Gulf as well as from
other donors in the Middle East and Europe, particularly the UK.”

Libyan Islamic
Fighting Group

LIFG December
17, 2004

Funding and external aid are “unknown.”

Lashkar I Jhangvi LJ January 30,
2003

Yes “Funding comes from wealthy donors in Pakistan, as well as the
Middle East, particularly Saudi Arabia. The group engages in
criminal activity to fund its activities, including extortion and
protection money.”

Liberation Tigers
of Tamil Eelam

LTTE October 8,
1997

Yes “The LTTE used its international contacts and the large Tamil
diaspora in North America, Europe, and Asia to procure weapons,
communications, funding, and other needed supplies. The group
employed charities as fronts to collect and divert funds for their
activities.” The group’s “financial network of support continued to
operate throughout 2012, and there were multiple reports of
increased LTTE involvement in human smuggling out of refugee
camps.”

Popular Front
for the
Liberation of
Palestine

PFLP October 8,
1997

“Leadership received safe haven in Syria.”

Popular Front
for the
Liberation of
Palestine-
General
Command

PFLP-GC October 8,
1997

“The group’s primary recent focus was supporting Hizballah’s
attacks against Israel, training members of other Palestinian
terrorist groups, and smuggling weapons.” PFLP-GC received “safe
haven and logistical and military support from Syria and financial
support from Iran.”

Palestine Islamic
Jihad—Shaqaqi
Faction

PJ October 8,
1997

“Receives financial assistance and training primarily from Iran.”

Kurdistan
Workers’ Party

PKK October 8,
1997

Yes “The PKK receives financial support from the large Kurdish
diaspora in Europe and from criminal activity.”

Palestine
Liberation
Front—Abu
Abbas Faction

PLF October 8,
1997

Funding and external aid are “unknown.”

Real IRA RIRA May 16, 2001 “The RIRA is suspected of receiving funds from sympathizers in
the United States and of attempting to buy weapons from U.S. gun
dealers. The RIRA was also reported to have purchased
sophisticated weapons from the Balkans and to have occasionally
collaborated with the Continuity Irish Republican Army.”

Shining Path SL October 8,
1997

Yes “SL is primarily funded by the narcotics trade.”

Tehrik-e Taliban
Pakistan

TTP September 1,
2010

Yes “TTP is believed to raise most of its funds through kidnapping for
ransom and operations that target Afghanistan-bound military
transport trucks for robbery. Such operations allow TTP to steal
military equipment, which it sells in Afghan and Pakistani markets.”

Source: U.S. Department of State, Country Reports on Terrorism 2012, May 2013.

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Author Contact Information

John Rollins
Specialist in Terrorism and National Security
jrollins@crs.loc.gov, 7-5529

Liana Sun Wyler
Analyst in International Crime and Narcotics
lwyler@crs.loc.gov, 7-6177

Acknowledgments
Updates to this report continue to benefit from the substantive contributions provided by Seth Rosen,
former research associate at CRS in 2009.