U.S. efforts to disrupt terrorist financing schemes have put organizations such as Al Qaida in dire financial straits. That was the assessment of Assistant Secretary for Terrorist Financing David S. Cohen, in a speech Monday at the ABA/ABA Money Laundering Enforcement Conference.
The speech was an opportunity to highlight counter-terrorist financing efforts while calling for increased cooperation between the government and the private financial sector.
Even a cursory review of the application of U.S. counter-terrorism policies reveals not only that they are crippling the support structure underpinning international terrorist organizations, but that the effectiveness of these policies has forced these groups to "fundraise" in ways that are more likely to be detected—ordinary criminal activity.
As Cohen explained, the U.S. 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 Title III of 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 Treasury Department has been focused on utilizing existing financial regulations to prevent the proliferation of nuclear weapons—most notably in North Korea and Iran. Over the summer, Treasury designated two North Korean entities, the Korea Hyoksin Trading Corporation 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 Under Secretary for Terrorism and Financial Intelligence Stuart Levey explained, 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."
While 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, Secretary 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."
Read more at IPT
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