Like American banks, European banks have been instructed to track down suspicious financial transactions and to report these as part of the battle against terrorism. How does this process work, what are the dilemmas involved and what are the consequences? Marieke de Goede, professor of Political Science at the University of Amsterdam (UvA), received an ERC Consolidator Grant to conduct research into this matter.
In the Netherlands, the Adil C. case was one of the first lawsuits related to terrorism financing. Adil C.transferred €1,000 to a friend who had left for Syria. This was just doing a friend a favour, according to C. The Dutch courts thought otherwise, calling it financing terrorism. Adil C. received a jail sentence and was also sentenced to subsequent electronic tagging for three years. Political scientist De Goede, employed by the UvA's Amsterdam Institute for Social Science Research (AISSR), predicts that we will be seeing many more such lawsuits in future. 'Following the money has become a major policy feature of fighting terrorism, both for the European Union and for the governments of the individual EU member states.'
The theory sounds as logical as it is simple: terrorism requires money, so intercept the money and find the terrorist. In practice, matters are less straightforward however: governments and police units lack insight into the financial world, so banks, with their financial expertise, are being deployed to track down suspicious transactions. 'And this makes banks an extension of the police and investigative services. My research focuses on the process surrounding a suspicious transaction: how is it identified and how is it analysed? In principle, it has to do with transactions which are fundamentally legal: it is entirely legal to transfer money to someone in Syria and entirely legal to withdraw money from an ATM on the Turkish-Syrian border. But what is it that leads to such a transaction being branded potentially suspicious? What are the factors involved? What are the dilemmas and the doubts confronting bank employees?'
Why would a political scientist want to study such matters? 'As a political scientist, I'm interested in processes that initially don't appear to be political, but actually are. The entire process from the policy decision on financial warfare right down to the ensuing lawsuits, which I refer to as the chain of translation, entails any number of political decisions.'
The consequences of such decisions for society can be tremendous, De Goede emphasises. 'In decisions related to drone attacks or Guantanamo Bay, the consequences are usually readily evident, and often also mean the difference between life and death. The consequences of decisions made at bank level, however, are much less transparent, since the processes are more technology-driven and less easily followed. Yet such decisions can have far-reaching consequences. In the United Kingdom (UK), for example, there are many small businesses providing money transfer services to Somalia. Somalis living in the UK transfer money to their bank, and a money service business then sees to it that the intended relative receives the money in cash, since banks are far and few between in Somalia. Recently, Barclays, which was the last bank in the UK to work with the money service businesses, ended its collaboration with a number of these businesses because the bank was unable to adequately establish where the money ended up, and exactly that is currently a requirement in the fight against terrorism. But the consequence is that many families in Somalia must now do without desperately needed funds from the UK. This is a serious form of financial exclusion.'
Other examples: banks can decide to refuse or hold transactions based on their own investigations. A sizeable number of individuals as well as, for example, charities – most of them with an Islamic foundation – are experiencing problems with money transfers being put on hold because their transactions have been branded as possibly suspicious.'
De Goede does wish to emphasise that it is not the intention of her research to put the blame on the banks. 'They take their work very seriously, and I know that decisions are not taken on the spur of the moment. This study is intended to help in finding out how the processes work, how they consider matters and what the dilemmas are that they are faced with. Many banks point out themselves that following the money as part of the fight against terrorism is a difficult matter to tackle for them, and that the processes involved are very complex.'
An important and interesting aspect in this regard is confidentiality. 'Of course I'm not trying to expose the exact way that banks make their decisions. In that sense, it is a learning process for me too: how far can you go in a security investigation? Which agreements do you make with research subjects and how do you deal with confidentiality? On the other hand, it is surprising to see how much information is more or less freely available – there is much more out there than you would expect.'
De Goede also sees it as her duty to encourage policymakers and bank professionals to communicate more with each other about financial warfare. 'This hardly happens as yet, although it can be extremely valuable to exchange information in this field, in particular on exclusion and privacy.'
On 22 September, there will be workshops behind closed doors for academics, banking professionals and policymakers. This will be followed by a public session entitled ‘Turning banks into cops? Private actors in the front line of security’, with speakers including Lia van Broekhoven (Human Security Collective (HSC)) and Michelle Frasher, an expert in the field of transatlantic money relations and the politics involved in financial data transactions between the US and the EU.