What’s in Asia’s New Anti-Terror Financing Group?

A recently formed working group is just the latest step taken by regional states to confront terrorism financing.

What’s in Asia’s New Anti-Terror Financing Group?
Credit: Bank Negara Malaysia

Amid a busy few weeks of regional meetings in Southeast Asia, with the Asia-Pacific Economic Cooperation Summit (APEC) in Vietnam and the Association of Southeast Asian Nations (ASEAN) and related summits in the Philippines, some may have missed the creation of a new Asia-Pacific counter-terrorism financing group that was announced last week. The new body, which was the outcome of a meeting held in Malaysia, deserves attention within the wider context of ongoing efforts by regional states to tackle a knotty aspect of the terrorism challenge in the subregion (See: “ASEAN’s Post-Marawi Islamic State Challenge”).

As I have mentioned before in these pages, a key line of effort in regional responses to the terrorism threat in Southeast Asia has been countering terrorism financing. Australia and Indonesia in particular have been taking in the lead in this area, with the inaugural Asia-Pacific Counter-Terrorism Financing Summit (CTF Summit) launched in Sydney in November 2015 and then a subsequent meeting held in Bali in August 2016 (See: “Indonesia-Australia Defense Relations in the Spotlight”).

Though the existence of the initiative may not have initially been that widely known, it showed some early promise, not just in terms of ongoing collaboration but also in other areas, including developing and subsequently producing the world’s first regional risk assessment on terrorism financing in Southeast Asia.

From November 20 to 23, Malaysia hosted the third iteration of the CTF Summit, which was organized by Bank Negara in partnership with the Australian Transaction Reports and Analysis Center (AUSTRAC) and Indonesia’s Pusat Pelaporan dan Analisis Transaksi Keuangan (PPATK). The summit featured several highlights, from an inaugural Codeathon between international financial intelligence units (FIUs) (with the first ASEAN-Australia one to the held in Sydney next March) to the delivery of the first regional terrorism financing risk assessment report for non-profit organizations (NPOs), which had been placed on the agenda the previous year. Some important initiatives were also agreed to, including a pledge to undertake a multilateral financial intelligence exercise.

But the key outcome at the summit was the establishment of the Southeast Asia Counterterrorism Working Group (SEA CTFWG). The basic idea of the new SEA CTFWG is to coordinate information-sharing among financial intelligence units and other relevant regional agencies that play a role in countering terrorism financing to directly target and disrupt funding of terrorist groups in the region.

In terms of structure and focus, according to the Australian government, SEA CTFWG will comprise Southeast Asian financial intelligence units co-led by AUSTRAC as well as the Philippines Anti-Money Laundering Council (AMLC). According to Australia, it will comprise four lines of effort to target and disrupt the funding lifeline of terrorist groups: preventing their use of the international financial system; countering extortion and exploitation of economic assets, resources, and the regional population; denying Southeast Asian terrorism funding from abroad; and preventing groups from providing financial or material support to Islamic State and other terrorist groups and their affiliates.

The formation of SEA CTFWG and the shape of its mandate come as no surprise. Indeed, this was a logical next step in line with the growing attention already given to the area of countering terrorism financing by regional states as well as the recognized need to institutionalize certain forms of collaboration. That said, it is still early, and it will be interesting to see how the new initiative evolves over time within the increasingly crowded landscape of minilateral and wider multilateral cooperation. The challenge of countering terrorism financing is also a difficult one because it is tied to broader issues that are tough to confront, ranging from the shadowy links terror groups and affiliates have, which play into their funding sources and methods, to operationalizing effective intelligence-sharing (not just between countries, but at times even between agencies of the same country) that actually translates into enforcement.

As of now, SEA CTFWG’s evolution is set to continue on through 2018, with Thailand already committing to host the next meeting and some progress likely expected in the interim as well, particularly with counterterrorism set to be a key agenda item in the ASEAN-Australia Summit coming up in March 2018. Australia has committed to this as one of a series of counterterrorism initiatives as part of a wider package for which funding has already been allocated. With growing interest from some Southeast Asian states, who see SEA CTFWG’s value, as well as ongoing efforts to expand membership of working groups, the case for sustainability is a strong one.