Terrorist Financing: A Backgrounder

Ed. note. This post is the latest in our series on the U.S. Supreme Court case Jesner. v. Arab Bank, a case that is slated to resolve the question of whether corporations can be sued under international law. Oral arguments are today.

One of the causes of action asserted in the Supreme Court’s case, Jesner v. Arab Bank, is terrorist financing, an international crime also at issue in the case brought by Ukraine against Russia before the International Court of Justice (see my coverage here). As the Court hears arguments today on the case, this article provides background on the multilateral treaty prohibiting terrorist financing and calling for perpetrators to be brought to justice, both criminally and civilly. It also situates this treaty within other multilateral efforts to prohibit various manifestations of terrorism.

The prohibition on terrorist financing finds expression in the International Convention for the Suppression of the Financing of Terrorism (“Convention”), adopted by the United Nations on December 9, 1999, with Resolution A/54/109.  The Convention went into effect on April 10, 2002, and has been ratified by all U.N. states with the exception of Burundi, Chad, Eritrea, Gambia, Iran, Lebanon, Somalia, and South Sudan.

The heart of the Convention is found in Article 2(1), which defines the target offense as follows:

Any person commits an offence within the meaning of this Convention if that person by any means, directly or indirectly, unlawfully and wilfully, provides or collects funds with the intention that they should be used or in the knowledge that they are to be used, in full or in part, in order to carry out:

(a) An act which constitutes an offense within the scope of and as defined in one of the treaties listed in the annex; or

(b) Any other act intended to cause death or serious bodily injury to a civilian, or to any other person not taking an active part in the hostilities in a situation of armed conflict, when the purpose of such an act, by its 1nature or context, is to intimidate a population, or to compel a government or an international organization to do or abstain from doing any act.

The prohibited act is complete once the funds are conveyed; it is not necessary to prove that the funds were actually used to carry out a terrorist offense.

The Convention broke new ground by identifying the purpose of terrorism, namely to terrorize the population. The treaty is thus premised upon the actual intention, or knowledge, that the funds will be used to carry out one of the offenses listed in an annex to the Convention. This specific intent element is important because it distinguishes the financing of terrorism from legitimate humanitarian assistance or international investment. It also distinguishes acts of terrorism from ordinary crimes—a challenge for all of international criminal law.

An express goal of the treaty drafters was to oblige states to bring to justice those who provided the financial backing for terrorist acts.  In addition to the direct perpetration of terrorist financing, the treaty also prohibits attempts, acts of complicity, and individuals who contribute to a group acting with a common purpose.  The treaty permits states to apply a whole range of jurisdictional bases, including when the perpetrator is merely present in the state, even if the perpetrator is not a national and the offence did not occur in that state. In this way, the treaty—like many other terrorism treaties—provides for a form of qualified universal jurisdiction over offences.

The Convention also requires state signatories to enable civil liability for perpetrators—including legal persons.  Article 5 mandates each state,

in accordance with its domestic legal principles, shall take the necessary measures to enable a legal entity located in its territory or organized under its laws to be held liable when a person responsible for the management or control of that legal entity has, in that capacity, committed an offence set forth in article 2.

Such liability is incurred without prejudice to the criminal liability of individuals having committed the offences per Article 5 of the Convention.

Prior to the terror attacks of 9/11, the United Nations had adopted twelve thematic multilateral anti-terrorism conventions prohibiting different manifestations of terrorism, such as hijacking, terrorist bombing, or hostage-taking.  These are the crimes incorporated by reference in the Article 2(a) definition above.

This patchwork approach reflected the fact that states could not agree on an omnibus definition of terrorism that might undergird a comprehensive convention against terrorism. A number of sticking points emerged as obstacles in this endeavor. Most importantly was the question of whether violent acts committed against privileged combatants representing a state by unprivileged combatants representing a non-state armed group constitute terrorism.  Such acts are not considered war crimes by international humanitarian law (a.k.a. the law of armed conflict), so if they were to be prohibited by international law it would have to be under a different basis. This controversy first arose with respect to national liberation movements, such as the fight against apartheid (think: “One man’s terrorist is another man’s freedom fighter”). Today, this question arises in many of the cases before U.S. military commissions that involve acts of violence against U.S. military personnel. Another obstacle to the emergence of a comprehensive definition of terrorism is a lack of consensus about whether there is such a concept of state terrorism.

The Financing Convention actually came close to a comprehensive definition of terrorism when it prohibited the donation or collection of funds to support

[a]ny other act intended to cause death or serious bodily injury … when the purpose of such act, by its nature or context, is to intimidate a population, or to compel a government or an international organization to do or to abstain from doing any act.

Eleven days post-9/11, the UN Security Council with UNSCR 1373 rendered the suite of terrorism treaties binding on all states, even non-signatories. In particular, this Chapter VII resolution mandated that “all States shall . . . [p]revent and suppress the financing of terrorist acts.”   UNSCR 1373 also set up a monitoring process that obliged states to report within 90 days how they planned to comply with UNSCR 1373.

Given that the Convention is well-subscribed to and that its prohibitions now apply to all states by virtue of their UN Charter obligations, U.S. courts should have no trouble concluding that acts of terrorism also violate customary international law. I took up this question in this article, which argues that the prohibition against terrorism is now sufficiently defined and universal to satisfy the Supreme Court’s test in Sosa v. Alvarez-Machain.  This question is not before the Supreme Court in Jesner, but may arise on remand. 

About the Author(s)

Beth Van Schaack

Leah Kaplan Visiting Professor of Human Rights, Stanford Law School; Former Deputy to the U.S. Ambassador-at-Large for War Crimes Issues in the U.S. State Department. All views are her own. Follow her on Twitter (@BethVanSchaack).

India Maxwell

Juris Doctor Candidate at Washington University in St. Louis School of Law and Staff Editor with the Global Studies Law Review