U.S. efforts to disrupt terrorist financing schemes have put organizations such as al-Qaida in dire financial straits.
That is the assessment that David S. Cohen, assistant secretary for terrorist financing, delivered in a speech Monday at the ABA/ABA Money Laundering Enforcement Conference in Washington, D.C.
Cohen highlighted counterterrorist financing efforts and called for increased cooperation between the government and the private financial sector. Even a cursory review of the application of U.S. counterterrorism policies reveals not only that they are crippling the support structure underpinning international terrorist organizations but also that the effectiveness of these policies has forced these groups to "fundraise" in ways that are more likely to be detected — ordinary criminal activity.
Cohen explained that the Treasury Department's Office of Terrorism and Financial Intelligence has been focused on "developing policy to combat all manner of illicit finance at home and abroad — from mortgage fraud to money laundering, from transactions facilitating WMD proliferation to those funding terrorists."
By employing provisions in the USA Patriot Act, Treasury has played a central role in combating nuclear proliferation, assisted in the fight against narco-terrorism, and destabilized the financial support structure of international terrorist groups.
The department has focused on using existing financial regulations to prevent the proliferation of nuclear weapons — most notably in North Korea and Iran.
During the summer, Treasury "designated" two North Korean entities, the Korea Hyoksin Trading Corp. and Hong Kong Electronics, both of which are alleged to have assisted the North Korean regime in the development of its nuclear weapons program.
In explaining the need to crack down on these front companies, former Undersecretary for Terrorism and Financial Intelligence Stuart Levey said such designations are "a part of our overall effort to prevent North Korea from misusing the international financial system to advance its nuclear and missile programs and to sell dangerous technology around the world."
Although these actions have not prevented nuclear proliferation in North Korea, they have been effective in reducing the likelihood that legitimate corporations will be abused in the process.
Commenting on related attempts to curb the development of nuclear technology in Iran, Cohen explained, "In the event that Iran's actions make it necessary to implement this plan, it seems quite likely that we will . . . ensure the effective implementation of any financial, investment or trade-related measures that are imposed."
Treasury has been instrumental in fighting narco-terrorism. During the past few months, the Office of Foreign Assets Control designated 25 entities and 32 individuals as narcotics traffickers. These designations, and the subsequent asset forfeiture actions, were aimed at the Ochoa Vasco network, Oficina de Envigado Organized Crime Group, the Gulf Cartel and Los Zetas, and the FARC.
Each group is responsible for drug trafficking throughout Colombia, Ecuador, Panama, Honduras, Belize, Mexico, and the Caribbean islands. The de facto blacklisting of these groups has contributed to reducing the spread of narcotics trafficking in Central and South America.
In addition to U.S. actions against narco-terrorism and nuclear proliferation, Treasury is actively engaged in destroying the financial support structure of international terrorist groups. The success of these policies is truly staggering. As Cohen explained, "by disrupting certain key financing nodes, we achieve the collateral benefit of interfering with the entire terrorist network's ability to move money. This degrades their ability to finance recruitment and training, and to plan and execute attacks."
In one of the many repeated public appeals for money al-Qaida has issued, Abu al-Yazid stated: "Jihad with money is also an obligation. And here we, in the battlefield in Afghanistan, are lacking a lot of money and a weakness in operations because of lack of money, and many mujahideen are absent from Jihad because of lack or absence of money with which they can carry out Jihad. Even many brothers. . . who want to sacrifice themselves for the cause of Allah, we cannot prepare them because of lack of money."
Pointing to al-Qaida's response to U.S. counterterrorist financing policies, the Treasury Department believes that the group is in "its weakest financial condition in years," a fact that has hurt recruitment and training.
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