Despite the conference’s fashionable theme “Post-Truth, Post-West, Post-Order?”, certain topics on the agenda persist beyond “post” – for instance the international community’s continuous fight against terrorism, and the endeavour to tackle it from an economic side. 16 years after 9/11 heralded the global war on terror, it is now time to review the corresponding global war on terrorism financing. In fact, besides military interventions, eliminating financial inflows to terrorist organizations diminishes their room for manoeuvre, reduces attacks, and hence increases security.

According to the 2016 Eurobarometer, 87% of Europeans believe the risk of a terrorist attack to be medium to high. The respondents also believe that the top priority to change the situation should be the fight against financing of terrorist groups. In a way, European respondents do not feel like enough is being done. This stems in part from a gap of knowledge and misinformation. Overshadowed by US military offensives in Iraq and Afghanistan, the financial side of the war on terror remains largely unknown.

However, there is also a structural issue. Since 2001, a year commonly described as a notch in international security, a new global financial governance structure has emerged to tackle financing of terrorist activities, cutting across governance in the US, Europe and worldwide. At the core of the War on Terrorism Financing is the FATF, the so-called Financial Actions Task Force, based at the Organization for Economic Cooperation and Development, (OECD), in Paris. Their efforts are supported by international networks of banks, intelligence agencies and national financial investigation structures.

Initially celebrated as a great success, more recent academic studies have highlighted a range of problems with this structure. First, the institutions to tackle terrorism financing are largely integrated in previously existing anti-money laundering institutions. While money laundering and terrorism financing have the same problem structure, they function in reverse ways: money laundering is used to make illegal money legal, whereas terrorism financing tries to use both legal and illegal money for illegal activities. Moreover, money-laundering might be one activity to generate profits for terrorist activities, but there is a whole range of other financing ways, including putative charity organization, private and state donations, and more recently, revenues from oil, gas, and agricultural sales.

A second problem of old institutions tackling new challenges relates to the role of Europe in global terrorism. According to Gilles Kepel, political scientist and expert on terrorism in the Arab world and Europe, 2001 was not the latest notch. Instead, a third generation of jihad emerged in 2005, largely unnoticed by the West, when splits within Al Qaeda engendered the emergence of the Islamic State. Europe, the West’s “soft underbelly”, resulted as its main target. In addition to new targets, also new organizational structures characterize this third generation of terrorist organizations – according to Kepel, they “shunned Al Qaeda’s top-down, pyramid-like organizational structure, favouring a bottom-up system”, which is reflected in their modes of financing. As a recent report by news agency Thomson Reuters reveals, the Islamic State’s economic system is marked by independence and diversification of funding sources in a post-Al Qaeda world. However, institutions to fight terrorism have not yet moved forward in turn.

New problems are therefore fought within an old framework. Illicit finance mechanisms are innovative, adaptive to change and quick to respond to new challenges and threats – even more so after the emergence of the Islamic State, which David Cohen, the US Treasury Department’s undersecretary for terrorism and financial intelligence, describes as “probably the best-funded terrorist organization we have confronted”. Official international institutions in contrast remain sticky, hierarchical, and difficult to reform. A number of scholars therefore critically see the global efforts to combat terrorism financing as mere desperate attempts to “drain the ocean to catch one type of fish”.

It is difficult, if not impossible, to measure illicit financial flows, the financing of terrorism, and hence the success of those who aim to stop it. But even if the post-2001 financial governance regime had little effect on terrorism financing, unintended consequences resulting from the new structures should be taken seriously. Especially countries which aren’t FATF core members comply with international standards for reasons other than international security, strengthening a largely US- and Western-dominated financial governance system.

Altogether, this reflects just one of the ways in which global security is determined by international economics and finance. Almost 16 years after 9/11, taking stock of the ways illicit mechanisms are fought by the international community is key – and offers a window of opportunity for innovative new solutions.