Islamic State members tap e-payments to evade trackersPARIS -- Terrorist groups' funds are growing more difficult to trace as prepaid bank cards and virtual currencies become more widely used, opening regulatory loopholes that governments are yet unable to close.
Easy anonymity
Members of the extremist Islamic State responsible for a series of terror attacks here Nov. 13 apparently used prepaid bank cards, issued by credit card companies and others, in their preparations, including to pay for goods and lodging. Funds are loaded to such cards at purchase, and then can be freely spent by the holder.
The perpetrators of the Paris attacks were drawn to the cards because of the anonymity they afford. The instruments can be bought without identification from retailers and online. Under French law, the cards can be funded up to 2,500 euros ($2,738) annually without identity checks. Certain varieties can draw on a third party's bank account. It is thus difficult for investigators to trace purchases made with the cards back to their users.
The cards are easy to come by even on the run, and members of terrorist and other illicit groups can use them to transfer funds to one another from around the world. French authorities think members of the Islamic State have begun doing just that.
The government here intends to enact new restrictions on the cards' purchase and use. Buyers will be required to show ID as soon as 2016. France looks to call on other European nations with looser regulations to take the same steps. Ideally, all of Europe will have the same type of restrictions, Finance Minister Michel Sapin said during a Nov. 26 appearance on French television.
New technologies
Terrorist groups also are adopting virtual currencies. Bitcoin and similar technologies could account for up to 3% of the Islamic State's annual income, or $15.6 million, U.S. outlet Fox News reported Nov. 25. Bitcoin and the like are traded outside of any existing banking network, permitting simple transactions between individuals. The technologies are not thought to be directly linked to the Paris attacks, but the Islamic State is believed to have converted illicitly obtained funds to Bitcoin to avoid detection.
Regulation of virtual currencies is a work in progress. The U.S. has become the first to treat the currencies like any other, requiring companies to record transactions over a certain value. European Union leaders vowed Nov. 20 to "strengthen controls of non-banking payment methods such as electronic/anonymous payments and virtual currencies." But no agreement has been reached on specific measures to prevent those instruments from being used to fund terrorism. Japanese laws on the matter are only now being drawn up.
http://asia.nikkei.com/Politics-Economy/Policy-Politics/Islamic-State-members-tap-e-payments-to-evade-trackers
