12 September 2006
U.S. Treasury Officials Report on Blocking Terrorists' Money
Officials urge other countries' finance ministries to take on security role
Washington -- A "revolution" has taken place in recent years as the U.S. Treasury Department has become integral in matters of international security, according to U.S. officials.
Several Treasury Department officials spoke September 12 before the U.S. Senate Banking Committee about work the department has done to disrupt the finances of terrorists.
Daniel Glaser, a Treasury deputy assistant secretary, said the United States has proven that security no longer is simply the province of law enforcement, intelligence agencies, and defense departments. In his testimony, Glaser said Treasury's Office of Terrorism and Financial Intelligence is "the first office of its type in the world." He urged others countries' finance ministries to "become integral components of national security communities."
Glaser said that Treasury has pushed international standards for designating individuals or entities as money-launderers, terrorist supporters or weapons proliferators through a Financial Action Task Force and through the United Nations.
He said the United States itself has submitted to an evaluation as to how its financial sector adheres to such standards and that it also has participated in assessments of other countries that are "strategically important … in the campaign against terrorist financing" -- Saudi Arabia, Pakistan, India, Switzerland and Turkey.
Recent strengthening of the international standards, according to Glaser, includes steps to combat illicit use of cash couriers and to improve information on the originators of cross-border wire transfers.
Glaser said that the U.S. Treasury is able to designate a foreign jurisdiction, institution, or type of account or transaction as a money-laundering concern, thereby allowing punitive measures ranging from recordkeeping requirements to termination of financial accounts with the designated target. Due to cooperation with other countries, such targets can be reported to the U.N. Security Council, which can designate them for financial isolation by 191 member states. In 2005, some 18 nations submitted names for the U.N. Security Council's consideration, according to Glaser.
Earlier in 2006, Treasury held a dialogue with bankers and regulators from the Middle East/North Africa region on international standards and plans a similar discussion in Latin America in early 2007.
To date, the Treasury Department has designated 375 individuals or entities as involved in terrorism. According to Adam Szubin, the director of Treasury's Office of Foreign Assets Control, who also spoke to the Senate panel, more than two-thirds of those targets are associated with either al Qaida or the Taliban.
Earlier in September, Treasury designated Bayt al-Mal and Yousser Company, which are financial institutions that functioned as Hezbollah's unofficial treasury in Lebanon. (See related article.)
For more information on U.S. policy, see Terrorist Financing and Money Laundering.
Glaser's testimony and Szubin's testimony are available on the Treasury Department's Web site.
(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
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