European governments are now the main source of terrorist financing, according to the New York Times

Written by James Thomas on Monday August 11, 2014

An investigation published by the New York Times recently provided a fascinating read for anyone involved in countering the financing of terrorism (CFT).

While it has long been believed that counterfeiting provides the primary source of financing for terrorists, the Times report suggests that ransom payments have now surpassed it.

Indeed, the report claims that European governments - including those of Austria, France, Germany, Italy and Switzerland - are now the main financiers of terrorist organisations, through the payment of ransoms for the release of hostages, and in contravention of an agreement at the G8 last June not to pay out to kidnappers. The article claims that these governments have effectively bankrolled terrorist activities to the tune of tens of millions each year, and that such payments may constitute up to half of the operating revenue of organisations such as Al Qaeda. Moreover, governments have apparently attempted to conceal such payments within foreign aid budgets.

The claims paint a bleak picture, with activity taking place at an industrial scale, terrorist organisations outsourcing the hostage taking to "criminal groups who work on commission", and negotiators reportedly taking "10 percent of the ransom". The article further describes how hostage taking has developed an ever increasing level of sophistication. Operations are described as slick, highly coordinated, and intricately planned, with hostage takers targeting specifically those foreign na-tionals of countries known to pay out. The taking of UK and US nationals has apparently declined given the reported hard line stance adopted by those governments.

All of this stands in sharp contrast to the conventional wisdom that hostage taking activities are largely opportunistic and unplanned and that UK and US nationals are no safer as a result of their governments’ hard line on not paying out, and UK and US authorities will take the report as evi-dence that paying out to hostage takers only feeds the activity.

The issue of ransom payments is clearly an increasingly contentious one, with the Times story broadly echoing warnings by the UK Foreign Office made towards the end of last year. However, the political and moral complexity of the issue suggests that it is unlikely to easily find broad agreement in principle let alone in practice. In short, it is not only hostage takers but citizens that expect their governments to pay out.

In the meantime, the ever increasing ransoms reportedly being paid out suggest that the direction of the hostage taking industry is towards increasing growth rather than decline.