Why It Matters

Curbing terror by cutting funds

At a counter-terrorism financing summit in Malaysia last week, security experts from 35 countries unanimously agreed that the first step to disrupting militant operations is to cut off their funds.

To this end, Australia and South-east Asia have formed a new alliance that will directly target and disrupt the funding lifeline of terrorist groups, by denying them access to the international financial system and other sources of funds.

The new initiative - called the South-east Asia Counter Terrorism Financing Working Group - will also enhance how the participating states share financial intelligence with one another.

This move comes amid fears that an Islamist terror network has gained a foothold in the region, after the May siege of southern Philippines city Marawi by fighters linked to the Islamic State in Iraq and Syria (ISIS) group.

The presence of non-Filipino militants in the five-month battle in Marawi, including men from Indonesia and Malaysia, showed these terrorists have supporters from neighbouring countries.

Terror networks also receive financial help from supporters in the region, as evidenced by the 20 ISIS sympathisers from Malaysia who have been arrested since last year for channelling funds to Syria and the Philippines for terrorism purposes.

The funds - paid in small amounts at regular intervals - were transferred via various methods, including money remittance services.

By targeting the regional flow of funds, the alliance aims not just to thwart the terrorists' ability to spend on recruitment, communications and weapons.

It also hopes that by regularly exchanging information on suspicious fund transfers within the region, the various agencies in participating countries can better detect planned attacks - which are increasingly home-grown - and intercept them in a timely manner.

A version of this article appeared in the print edition of The Straits Times on November 27, 2017, with the headline 'Curbing terror by cutting funds'. Print Edition | Subscribe