War Crimes Act of 1996

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					Strategies Against Terrorist Financing


    Ha Vu
    Alexis Zeiden

    PUBP 710
    April 14, 2008
Agenda
 History and Context

 Overview: The Importance of Finances to Terrorism

 Issue Statement

 Proposal

 Pros and cons

 Summary and conclusion
History
 A lot terrorist financing comes from legal
  means
 Pre September 11
   Most money laundering legislation was
    ineffective on terrorist networks
   Terrorist networks (including their financing)
    was a priority of President Clinton
   Foreign Terrorist Asset Tracking Center (FTATC)
Legislative History
 Bank Secrecy Act of 1970
 International Emergency Economic Powers Act (1977)
 Money Laundering and Control Act of 1986
 Annunzio-Wylie Anti-Money Laundering Act (1992)
 The Money Laundering Suppression Act (1994)
 The Money Laundering and Financial Crimes Strategy Act
  (1998)
 USA PATRIOT Act (2001)
 Suppression of the Financing of Terrorism Convention
  Implementation Act (2002)
 Intelligence Reform Terrorism Prevention Act of 2004
USA PATRIOT Act: Title III
 Addresses terrorist financing
 Amends the Money Laundering and Control Act of
  1986 and the Bank Secrecy Act of 1970
 Makes providing support to a foreign terrorist
  organization an offense under money laundering
  legislation (prosecution under section 1956 of Title 18
  of the U.S. Code.38)
 Requires domestic financial institutions to undertake
  necessary measures if the Treasury Secretary
  believes and actor is laundering money
 Allows for judicial review of assets seized under the
  speculation of terrorist activity
Suppression of the Financing of
Terrorism Convention Implementation
Act (2002)
 Implements the International
  Convention for the Suppression of the
  Financing of Terrorism (signed by the
  United States on January 10, 2000)
 The Convention obligates participants
  to prosecute or extradite those who
  knowingly and unlawfully provide or
  collects funds to be used to support
  terrorist activities.
Overview: The Importance of
Finances to Terrorism
 9/11 Commission – “expect less from trying
  to dry up terrorist money and more from
  following the money for intelligence, as a
  tool to hunt terrorists, understand their
  networks, and disrupt their operations.”
 Adequate and successful financing is the
  key to terrorist activities
 In order to stop terrorism, the ability for
  the terrorist networks to fund their efforts
  must be stopped
Overview: The Importance of
Finance to Terrorism
 Financing is at the basis of all
  terrorist networks, especially Al
  Qaeda
 Numerous Acts have been passed to
  attempt to stop terrorist financing
 No single US official how the power to
  coordinate all the various efforts that
  go into a sustained effort to halt
  terrorist financing
Methods to Disrupt Terrorist
Financing
 Protecting legitimate charities
   There has been consistent terrorist abuse of the
     charitable sector through the diversion of charitable
     funds and services to terrorist organizations such as al
     Qaeda and Hamas
 Prosecution of money laundering
   Following money laundering allows the US to infiltrate
     terrorist networks
   Prosecution cuts off sources of funding
 Trade Sanctions
   Used as a tool against terrorist since the early 1990’s
   Led by the Department of Treasury Office of Finance
     Control (OFAC)
   Nearly $1.5 billion has been blocked due to trade
     sanctions
Issue Statement: Which Method is
Best to Disrupt Terrorist Financing:
 Freeze?
   Immediately seizing assets suspected of
    being targeted for use of terrorists
 Follow?
   Tracking suspicious funds in hopes they
    will lead officials to the terrorist cells
   Recommendation of the 9/11
    Commission
Proposal
 Strategy
   Combine freezing assets and
   tracking terrorists’ money trails
 Organization
   Policy Coordination Committee: attached more
    importance and more comprehensive approach
 Information management
   More access
   More sharing
   Less disclosure
Freezing Assets vs. Tracking Money
Trails
 Cost - less vs. more
     Time
     Money
     Human capacity: skills, experience, cooperation
     Immigrants and foreign relations
 Benefit - less vs. more, short-term vs. long
  term
     Use of information
     Intelligence lead
     Opportunity to capture terrorists
     Opportunity to eliminate terrorist network
Freezing Assets: Dry Out Terrorists’
Funding to Eliminate Them?
 Dry out terrorist money?
   Feasibility - Not all terrorists’ assets
    because limited information availability
   Impact - Terrorist network help them
    survive by providing money from
    untouched resources.
   Scope - Formal financial transaction is
    only one of many channels in terrorist
    financing
Freezing Assets: Dry Out Terrorists’
Funding to Eliminate Them?
 Eliminate terrorists?
   Assumption - Money is everything to
    terrorists: terrorists will die because of
    starving
   Facts
     Money matters, but is not everything to
      terrorists
     Freezing assets indirectly affect terrorist
      survival
Tracking All Terrorists’ Money
Trails?
Too demanding with many constraints
 Resources
 Human capacity
 Technique/technology
 Information management
 Interest: to tackle terrorists in West
  Africa, Sahara Africa, Latin America
  and Asia
Organization:
Policy Coordination Committee
 Current status: freezing leaning
   Head: General Counsel of the Treasury
    Department - biased


 The Proposal: freezing and following
   Head: A non-departmental National
    Security Council staff
     non-biased, better judgment
     terrorist financing attached
     more importance
Information Management
 Financial institutions - financial record
  keeping and reporting
 Financial privacy vs. national security
   Information access when there is
    national emergency
   Foreign Investment affected
 Freedom of press vs. national security
   Disclosure of classified information
Information Management
 More access, more sharing and less
  disclosure - facilitates tracking terrorist
  money trails
    Treasury Department: in front
    Information shared broadly among intelligence
     community
    Less disclosure of classified information
 House Resolution H.Res.895
    Support the Treasury Program’s information
     access
    Condemn unauthorized disclosure of classified
     information
Summary and Conclusion
 Should not freeze all assets because
  of limited benefit
 Cannot track all terrorist money trails
  because of limited resources

 Strategy - combine freezing assets
  and tracking terrorists’ money trails
  with specific application on case by
  case approach
Summary and Conclusion
 Organization
   Policy Coordination Committee
    Head: a non-departmental National Security
     Council staff
    Team: analysts from all relevant departments
 Information Management
   reports and sharing with other agencies within
    Policy Coordination Committee
   Limit disclosure of government’s financial
    investigation
Sources
   “President Freezes Terrorist Assets”, Remarks by the President,
    Secretary of the Treasury O’Neil and Secretary of State Powel on
    Executive Order, The Rose Garden, September 24, 2001,
    http://www.whitehouse.gov/news/releases/2001/09/20010924-4.html
   “Terrorist Assets Report”
    http://www.treas.gov/offices/enforcement/ofac/reports/tar2004.pdf
   Blanchard, Christopher, Saudi Arabia: Terrorist Financing Issues,
    Congressional Research Service Report
   Center for Defense Information. 2002. “Financial War Against
    Terrorism,” Terrorism Project, March 5.
   Department of Treasury, “2003 National Money Laundering Strategy,”
    http://www.treas.gov/offices/enforcement/publications/ml2003.pdf
   Department of Treasury, “2007 National Money Laundering Strategy,”
    http://www.treas.gov/press/releases/docs/nmls.pdf
   Elsea, Jennifer K. and M. Maureen Murphy. 2006. “Treasury’s Terrorist
    Finance Program’s Access to Information Held by the Society for
    Worldwide Interbank Financial Telecommunication (SWIFT),” CRS
    Report for Congress, Order Code RS22469, July 7.
Sources
   Elsea, Jennifer, “Treasury’s Terrorist Finance Program’s Access to
    Information Held by the Society for Worldwide Interbank
    Financial Telecommunication (SWIFT), Congressional Research
    Service Report
   National Commission on Terrorist Attacks upon the United States.
    2004. The 9/11 Commission Report, July 22.
   Office of Foreign Assets Control, U.S. Department of the Treasury
   Weiss, Martin A. 2004. “Terrorist Financing: Current Efforts and
    Policy Issues for Congress,” CRS Report, Order Code RL32539,
    August 20.
   Weiss, Martin A. 2005. “Terrorist Financing: The 9/11
    Commission Recommendation,” CRS Report RS21902, February
    25.
   Weiss, Martin, “Terrorist Financing: Current Efforts and Policy
    Issues for Congress”, Congressional Research Service Report
   Weiss, Martin, “Terrorist Financing: U.S. Agency Efforts and
    Inter-Agency Coordination”, Congressional Research Service
    Report

				
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