Podcast Transcript

06 March 2006
Transcript of Peter Haas, Economic Officer at the U.S. Embassy, London.

Disrupting Terrorists' Support - An Ounce of Prevention

Over the past year in Karachi, Amman, London, Sharm el-Sheikh, and Bali, as well as in Iraq, Israel and Uzbekistan, terrorists have struck without warning or regard for time or place; slaughtering innocent people without regard to age, nationality, creed and profession. The bombs were often crude and cheap, but the attacks required one thing besides explosives or ball bearings: cash.

The international community must step up efforts to disrupt the cash flows used by terrorists to recruit, travel, communicate, train, and execute attacks. We need to make it harder, riskier, and more costly for terrorists and those associated with them to conspire and act. We have several multilateral tools at our disposal.

One tool is the coordination of intelligence gathering. This job is not only the responsibility of intelligence or law enforcement agencies. Banks, securities firms, money exchanges and insurance companies have important roles in reporting suspicious transactions to their country's Financial Intelligence Unit (FIU). FIUs may exchange information under appropriate circumstances. More than 80 countries have introduced new terrorist-related legislation, and over 100 have established FIUs.

The United Kingdom’s National Criminal Intelligence Service (NCIS) is an example of an excellent FIU. Its terrorist finance team helps develop leads for law enforcement and provides guidance to the financial sector on trends in terrorist finance. The UK also has adopted strong legislation to combat terrorist finance.

Another vital tool is the public identification, or "designation," of individuals and organizations that support terrorism, through national announcements and international listing by the United Nations. The designation procedure is strengthened by serious sanctions. These include the freezing of assets to choke off the terrorists' immediate access to cash and to provide avenues for intelligence-gathering back to the source of the funding: accomplices in the terrorist network; front-companies; non-profit organizations; and side channels used to transfer or smuggle cash.

These UN sanctions alone have yielded quantifiable results. Since 2001, the UN estimates that almost 60 countries, including both the United States and the United Kingdom, have submitted names to the UN sanctions list, and 312 individuals and entities have been subjected to sanctions. U.S. Treasury reports indicate that over 1,600 terrorist-related accounts and transactions have been blocked around the world, and more than 170 countries and jurisdictions have issued freezing orders consistent with applicable UN Security Council Resolutions on US$ 150 million in assets.

An additional tool is the development of internationally recognized rules for scrutinizing cross-border money flows. This is a key tool to empower investigators to identify and follow the money trail, and to force terrorists to alter their 'business as usual' and adopt new funding mechanisms that are possibly more visible or less secure. The multilateral Financial Action Task Force (FATF) has developed 49 standards to combat money laundering and terrorist financing which were endorsed this year by the United Nations. These standards include provisions governing charities, cash smuggling, and money service businesses. The UN, World Bank, and International Monetary Fund (IMF), as well as bilateral donors including the United States and the United Kingdom, have pledged to provide or facilitate specialized training to build capacity among bankers and officials to apply FATF’s 49 standards.

As the United States and the United Kingdom know, the tools exist to combat terrorist financing. What is missing is the political will of governments around the world to wield these tools aggressively, effectively and efficiently.

Governments must put the effort into fully implementing international best practices, training personnel and sharing intelligence, acting cooperatively and using the agreed international tools available. Then, the international community will move closer to preventing attacks before they happen by better depriving terrorists of the means to raise and move the money they need.

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