The zones are not only free from excessive tariffs, but also from strictoversight that optimizes the conduct of legal and illegal activities in and around the zones. The permissiveness of the environment provided by FTZs affords the perfect conditions for terroristnetworks to establish finance and support infrastructure that facilitates transnational terror operations. The purpose of this paper is to provide the Commander of United States SouthernCommand (USSOUTHCOM) and the Director of the Joint Interagency Task Force South(JIATF-South) background and policy recommendations for disrupting terrorist financing andsupport operations associated with trade zones in the Americas.
A Permissive Environment for Terror Financing
It can be presumed that illicit financing has been around as long as there has been asystem of value-based trade. The human characteristic as a rational actor to maximize theexpected value of outcome brings out the natural competitor in everyone.
A successful businessman prides himself on understanding the competitive environment and exploiting factorswhere he has the upper hand. As long as businessmen operate within the norms and lawsdictated by society, the practice of exploiting advantage for personal gain is highly admired. Onthe other hand, those that operate outside the societal boundaries of trade are actors in dark networks that seek to generate income through covert and illegal means.
Whether the decisionto commit illicit financial activity is driven by greed or ideology, the mechanics of this activity isessentially the same. A U.S. government study conducted by the Library of Congress in 2002found that criminals, smugglers, drug dealers, insurgents, and terrorists operating in Europe
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