Blood Money

R. A. Hettinga rah at shipwright.com
Fri Apr 23 07:19:27 PDT 2004


<http://online.wsj.com/article_print/0,,SB108267600610591398,00.html>

The Wall Street Journal

      April 23, 2004

 COMMENTARY



Blood Money

By JOHN W. SNOW
April 23, 2004; Page A14


One of the most critical things the 9/11 Commission hearings have brought
to light is the important role the Patriot Act plays in helping to win the
war on terror. We have heard a lot about "the wall" -- a conceptual barrier
that prohibited agencies such as the FBI and CIA from communicating freely
with each other. That wall was knocked down when President Bush signed the
Patriot Act in October 2001.

Sept. 11 compelled our nation to identify the areas we needed to bolster in
order to secure our homeland. We have learned a number of very important
lessons about the vulnerabilities in our financial system. First, that our
ability to combat terrorist financing is linked with our ability to combat
money laundering. Second, that we must remain vigilant in our continuing
efforts to identify new ways in which terrorists and criminals will attempt
to use our own financial system to fuel their agendas. And third, that our
ability to obtain and share financial information is critical to our
success in identifying and bringing down terrorist networks.

Money is the lifeblood of terrorists because, like any businesspeople, they
cannot sustain operations without it. A lack of finances can hinder or
thwart short-term goals, and dismantle long-term agendas. Without funds,
terrorist groups suffer disarray, defection and, ultimately, demise. The
Patriot Act aids the ability of the government, along with our partners in
the financial sector, to identify dollars flowing through our financial
system in support of nefarious acts, and to prevent new dollars from
entering the system. Notably, the act has helped the U.S. and our
international partners designate 361 individuals and organizations as
terrorists and terrorist supporters -- and to freeze and seize
approximately $200 million in terrorist-related assets.

Under the Patriot Act, banks and other financial institutions are directed
to bolster defenses in potentially vulnerable areas. As we strengthen our
defenses against financial crimes in traditional financial institutions,
such as banks, criminals and terrorists will look to other types of
financial institutions or methods through which to move or launder their
money. With that in mind, we continue to bring additional types of
businesses under the umbrella of anti-money-laundering and
anti-terrorist-financing regulation, thereby raising awareness of the
issues and equipping these businesses with the tools to protect themselves.

We are committed to balancing the weight imposed by these regulations with
our mission of ensuring that we are taking all appropriate steps to keep
our citizens safe. We believe that financial institutions should have the
flexibility to design programs custom-tailored to address their business,
the products they offer and their customer base. This reflects the Treasury
Department's judgment that those dealing directly with the public are in
the best position to make such decisions, and that this flexibility
ultimately enhances the effectiveness of the regulation.

Additionally, the Patriot Act authorizes the sharing of critical
information about suspected terrorist or money-laundering activity -- not
only between the government and financial institutions, but also among
financial institutions themselves -- by allowing them to register with the
Treasury Department.

As a first step to expand its information-sharing capabilities, Treasury
has asked law enforcement authorities to provide the names of suspected
terrorists and money launderers. We then review the names and, if
appropriate, send them on to financial institutions to search their account
and transaction records for potential matches. Matches are forwarded to law
enforcement authorities through Treasury. At that point authorities must
follow the appropriate legal process to take further steps.

This process has been incredibly helpful to law-enforcement officials'
efforts by saving them critical time and resources. In addition, the
financial community has done an exemplary job; institutions large and small
have committed themselves to the task, provided valuable leads for law
enforcement, and our country is safer because of it.

Since September 11, there has been a tremendous resolve in the financial
community to deny terrorists access to the financial system. However, the
Patriot Act was essential to first put in place the procedures needed to
follow through on that resolve by providing innovative and essential tools
to eliminate known risks to our financial system, as well as to identify
and halt new risks that develop.

As I mentioned before, the Patriot Act also lowered a wall that prevented
the intelligence community from supporting our administrative authority.
For example, when the Treasury Department had information indicating that
two U.S.-based charities -- the Benevolence International Foundation and
the Global Relief Foundation -- might be supporting al Qaeda, the Patriot
Act gave Treasury clear authority to block the assets of these
organizations while they were under investigation. This action prevented
those assets from being dissipated or diverted to support terrorists. The
U.N. ultimately joined the U.S. in designating these entities as supporters
of Osama bin Laden and al Qaeda.

Cutting off terrorists from the financial system is fundamental to
disrupting their activities. Through our efforts, we continue to make it
more difficult for terrorists to move money through formal financial
systems, thus exposing them to greater risk of detection. The results are
crippling to the networks that want to do us harm.

Perhaps the most important result of the Patriot Act has been the
strengthened partnership among the financial community, the government's
financial agencies, and law enforcement, much to the detriment of
terrorists. This partnership is the key to our success in choking off the
blood money used by terrorists to fuel their agendas of hatred.

Mr. Snow is secretary of the Treasury.


-- 
-----------------
R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'





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