I think we should analyze what has happened with the Islamic State, which has developed a new model for financing terrorism. I think the greatest risk is that this model will be emulated by other groups and then taken from country to country. The most important elements are the territorial control of areas with strategic resources, in regions which are plagued by war and political anarchy; constitution or joint ventures with the local population in order to seek consensus but also to maximize revenues; and finally, the creation of a fiscal structure whereby the Islamic State levies taxes upon the population for the use of infrastructure, and services such as electricity and water, but also for access to the judiciary system.

This is a system which is very difficult to alter when it comes to terrorist financing because it's completely self-funded. If we look at how it is structured, it is a closed economy that does not tread internationally. There is no movement of funds going through the Islamic banking system or the traditional banking system. Everything takes place at a local level. Often, the population of the neighbouring areas with whom most of the smuggling and trade takes place has no other choice. These are people who are not part of the Islamic State but they are, to a certain extent, conditioned by its economy. The only possible way of intervening in this new model of terrorist financing is through the small donations from the west that are still taking place, mostly from families and friends of the jihadists who have joined the Islamist State, or even the jihadist brides.

We can call these a sort of micro sponsorship. Transfers take place through the informal banking system, Western Union, the hawala, and from friends travelling to neighbouring countries. The transfers are always in very small amounts. We're talking about amounts below the $500 limit. Another way of micro financing is through electronic currency. This is something that Hamas has also used in the past. It is very difficult to monitor this kind of transaction because every single day there are so many taking place around the world. There are often communities that live on transactions of this kind from the diaspora of their own nations.

In conclusion, I have two recommendations.

The first one is that we absolutely prevent the success of the Islamic State model, because if it is successful, it is going to be the model for the 21st century. War or military intervention is not going to help, because as we've seen, this is a model that blossoms within that kind of environment. It would be much more effective to offer a choice, an alternative to the communities which are interlinked economically with the Islamic State, for example, those communities that trade and bordering countries. This of course requires a pacification of those regions. As long as we are in a war and there is political anarchy there is very little we can do about that.

The second recommendation is the screening of these micro sponsorships. This screening should take place through profiling. Many people regularly to send money to their families and friends. Through profiling we can create a database that will help us pinpoint when somebody is sending money for reasons unrelated to their family, but rather for sponsoring jihadists, or people joining the Islamic State or any other organization..

Thank you.

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