After GLOBSEC’s research on the terrorist financing networks operating in the CEE region, taken upon as part of National Security Programme’s responsibilities within the framework of Project CRAAFT (Collaboration, Research and Analysis Against Financing of Terrorism), we have been able to compile a report on the relevant findings. The report has been launched during GLOBSEC workshop, which took place on January 14th, 2021. 

The report is part of a project funded by the European Union’s International Security Fund-Police. The project CRAAFT is a research and community building initiative designed to build stronger, more coordinated counter terrorist financing (CTF) capacity across the EU and in its neighbourhood. This particular research is focusing on the capacities of Financial Intelligence Units (FIUs) – analytical bodies that review suspicious transactions to combat terrorist financing and money laundering. Via a series of interviews, GLOBSEC is conducting 2 needs analysis reports. This one is focusing on Visegrad Four (V4), while the second one will zoom in on the Western Balkans (WB). A particular focus is dedicated to international cooperation between FIUs themselves and synergy with the private sector actors operating in these two regions. The reports’ findings will have been presented in their drafted form to the FIU representatives at 2 regional workshops for feedback before finalising the writing. Simultaneously, as part of the feedback process a discussion on common challenges and sharing of experience between the two regions should spark. This also serves as a tool of feeding data into the research that aims to map the needs of each region’s FIUs.

The workshop was organised by Magdalena Markiewicz, the Research Fellow and Project Manager for National Security Programme. The conversation was moderated by Andrea Marinkovic (GLOBSEC researcher for the report) and Dr Ingrida Kerusauskaite, Portfolio Lead, Anti-Corruption and Illicit Financial Flows at Palladium and Affiliated Lecturer, University of Cambridge. Amongst workshop participants were representatives of Financial Intelligence Units from V4 as well as Western Balkans regions. We have also had the pleasure to welcome representatives of CTF policing agencies from the area. 

Topics Discussed:

  • Capacities of FIUs/V4 actors to combat terrorist financing and money laundering –Challenges encountered and the methods to overcome them.
  • International cooperation in V4: comments by Hungary and Slovakia
  • Cooperation amongst FIUs and CTF related agencies in CEE region: comments by North Macedonia, Albania, Kosovo
  • Synergy with the private sector – opportunities and setbacks.
  • Common challenges in international cooperation between FIUs and V4 countries in combating TF.
  • Evaluation of the role of NPOs in CTF on a national and European level – experience sharing.
  • The vulnerability of certain NPOs to terrorist financing., the extent of the NPOs’ reporting capacities to the relevant national CTF entities
  • Synergy with private sector bodies – experience sharing and comments from participants.
  • Threats and risk factors – related to geographic area of establishment of activities, their effectiveness. 

 Key Report Takeaways:

  • There exist strong commonalities in regard to V4 shared challenges (working with Non-Profit Organisations due to their vague understanding of TF risks), manner of addressing issues, and overall annual successes. 
  • The NPO sector is in a need of a risk-based assessment in every V4 country. 
  • There exists a consensus regarding the need for more trainings within NPOs, preferably specific to different levels of threat, depending on the NPO’s type of vulnerability. In addition, NPOs are missing a practical guide of best practices which should be incorporated into practice.
  • The establishment of FIUs in various countries led to the adoption of different models, depending on the range of powers they possessed as well as their position within the structures of various ministries. The International Monetary Fund has distinguished four models of FIUs in its 2004 publication, this being Administrative, Law Enforcement, Judicial, and Hybrid. In the Visegrad Four region, two of the four types are currently being used, however, it is important to note that no two FIUs are alike as their powers and functions depend on the legislature of the given country. Slovakia uses the law enforcement model, while the other three countries shaped their FIUs in administrative capacity.
  • The difficulties of TF – reporting entities regarding implementation of TF-related indicators in the relevant IT systems.
  • The importance of geographical indicators and the need to automise the reporting systems. 
  • Clear separation of competencies amongst CTF agencies is still lacking – Western Balkans and CEE region financial intelligence units are still often tasking themselves with all competencies linked to preventing terrorism as an activity per se, which should not be the case.

Opportunities and Recommendations to Take Forward:

  • There is a window of opportunity for cooperation between the V4 counties, as well as between the former and the NPOs in the area, although specialised training as well as an improved expertise amongst the NPOs will need to be emphasized for the cooperation to bring consistent, positive outcomes. 
  • Cooperation between CT units in police entities and FIUs in the Western Balkan region has witnessed improvement due to the emphasis on communication and regular reporting as well as training between the concerned entities. 
  • Specific CTF guidelines should be publicly available and accessible for NPOs, these should be standardised information meant to improve knowledge and decrease potential TF NPO vulnerabilities.

The report launch/workshop was organized by GLOBSEC as part of the activities within the framework of the Project CRAAFT, coordinated by Magdalena Markiewicz on the GLOBSEC side.