Confiscation of Terror Related Funds

One of the most significant aspects of counterterrorism activity is economic. Terrorist organizations require sources of funding in order to execute their various plans, harming these sources or other of their economic activities (sometimes referred to as Da'awa), has been proven as an effective and necessary measure in combating terrorist organizations.

A significant part of dealing with terror funding is by criminally charging those involved for terror-funding offences, but this is not the subject of our current overview. Instead, we will focus on the aspect of intercepting the funds themselves, or in other words – the legal tools which allow the confiscation of terror-related funds and assets.   

What are terror-related funds and assets? These are defined as assets belonging to an organization declared by an order issued by the Commander of the Armed Forces in Judea and Samaria, an unauthorized association, in accordance with regulation 85 of the  Defense Regulations (emergency) of 1945 (henceforth: Defense Regulations).

The Defense Regulations prohibit obtaining, holding or transferring Property belonging to an unauthorized association, property which in effect belongs to the acting sovereign (in Judea & Samaria, this is the military commander or anyone appointed by him).

One way to confiscate terror-related assets is as part of a criminal proceeding: when a person is being indicted for offences related to terror funding, such as receiving, transferring, or carrying terror-related funds or assets in or out of the region, the court may order the confiscation of all property that was used to commit the offence or that was received as payment for committing the offence. Moreover, possession of terror related funds and assets is prohibited in and of itself (similar to narcotics of unauthorized weapons), and a court of law can order the confiscation of the aforementioned funds and assets on that basis alone. 

Often, it is impossible to indict the person from which the funds were captured, for various reasons. For example, money couriers being used by terrorist organizations in order to transfer their funds, are sometimes unaware of their role, and thus are not criminally responsible. That is why in Judea and Samaria, as in Israel, there are administrative legal tools allowing confiscation of terror related funds and assets. These tools are based on the military commander's authorities, as stated in articles 84 and 120 of the Defense Regulations, and according to the Supreme Court rulings (Uda case), are unrelated to the question of indictment.

In order to challenge the military commander's administrative decisions concerning the confiscation of terror-related funds and assets, one may petition the Supreme Court. A number of such petitions have been submitted over the years.

 

The administrative authority to confiscate terror related funds and assets found in Judea and Samaria, are used to confiscate terror fund from those who have received funds and assets from terror organizations (such as terrorists who get paid for their "work"), terror-related funds and assets seized from couriers, assets seized from a compound belonging to a terror organization and assets bought using funds received from a terror organization (such as products and materials purchased by a factory with terror-related funds).

Apart from the authority to confiscate the actual terror-related funds and assets, meaning the property (or funds) that can be directly linked to an unauthorized association, if proven that a person received funds from a terror organization, the authorities may confiscate an asset, of equal value (or less) to the amount he received from the terror-organization. E.g., if a person received a total of 10,000 NIS from a terrorist organization, it is possible to confiscate his car if it is worth 10,000 NIS or less. In other words, even if the property that was actually seized and confiscated did not belong to a terror organization or was not received from it, it is possible to order the confiscation of property from a person that received terror-related funds and assets in the past (Talal Shrim case).

Sometimes, proving that all of the fund and assets seized from a certain person or place belong to a terror organization is difficult, but the evidence shows that at least some of the funds or assets seized belong to a terror organization, and the person holding the assets can differentiate between the legitimate and the terror-related funds and assets. Such a situation occurred concerning funds that were seized from currency change offices in Judea & Samaria, These currency change offices were used as banks of a sort for terror organizations.

In accordance with the Supreme Court rulings, in a situation where funds are being repetitively transferred using the same currency change office, and the legitimate funds are mixed with the terror-related funds, the burden of proof lies upon the person from which the funds were seized, to show that the funds seized from him belong to him or to an uninvolved third party, and do not belong to a terror organization. If the person was unable to lift the burden, the military commander is authorized to order the confiscation of all of the funds that were seized (El-Ajuli case and Nassar case).

This important precedent, delivered regarding currency change offices, is only an example of one tool out of many administrative tools, the authorities develop in order to keep battling effectively against the terror funding phenomenon, while adjusting to the evolving ways of transferring terror funds while, at the same time, avoiding disproportionate damage to funds or assets belonging to individuals uninvolved in terror activity.