Move to Halt the Flow of Funds to Terrorist Groups

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PRESIDENT Bush acted yesterday to freeze the cash assets of terrorists and their support groups.

He signed an executive order granting America the authority to seize Osama Bin Laden's worldwide funds and those of 26 other terror leaders and organisations many with strong links to Britain.

And the President warned international banks holding Bin Laden's money that they would be 'punished' if they did not freeze his accounts.

President Bush declared: 'We have launched a strike on the global terrorist network.

'We will starve them of funding,

root them out of their safe hiding places, turn them against each other and bring them to justice.' But as the crackdown was unveiled, Secretary of Defence Donald Rumsfeld admitted for the first time that the U.S.

would never be able to 'defend our way of life against every conceivable terrorist, everywhere in the world'.

He added that it 'will be impossible' to stamp terrorism out completely.

Mr Rumsfeld went on: 'The only thing we can do is to carry the effort to the terrorists, the terrorist networks, the people that sponsor them, the people that finance them

and the people that tolerate them.' Mr Bush, flanked by Secretary of State Colin Powell and Treasury Secretary Paul O'Neill, said that money was the 'lifeblood' of terrorist operations. 'Today, we're asking the world to stop payment.' He went on: 'If you do business with terrorists, if you support or sponsor them, you will not do business with America.' Secretary of State Powell described Bin Laden as 'the chairman of this holding company of terrorism'.

In the past only the direct assets of terrorists have been frozen, but under the new order those of their supporters may be cut off.

The U.S. is also freezing the assets of charities believed to have ties to terrorists.

Most importantly, it now has the authority to block the American assets of any foreign government that refuses to co-operate.

The action could have huge

implications because Bin Laden and his Al Qaeda terror network - along with most other large Moslem groups - are funded through banks and wealthy individuals in Saudi Arabia, Egypt and Yemen.

These banks all have substantial investments in the U.S. Now they could lose them if they continue to support terrorists.

A new U.S. government department, the Foreign Terrorist Asset Tracking Centre, has been set up to 'investigate the financial structure of terrorist networks and to freeze their money to disrupt their actions'.

Mr Bush went on: 'We're putting banks and financial institutions around the world on notice. We will work with their governments and ask them to freeze or block terrorists' ability to access funds in foreign accounts.

'If they fail to help us by sharing information or freezing accounts, the Department of the Treasury now has the authority to freeze their banks' assets and transactions in the United States.' The President pledged to act 'responsibly' but said he was resolved to disrupt the terrorists and had the option to use 'draconian measures'.

Bin Laden and other terror leaders and groups have only very small, if any traceable, assets in the U.S. But others known to help them have billions of dollars on deposit in America as well as massive investments in companies and buildings.

Mr Bush added: 'We are beginning to set priorities of those most egregious in serving as fronts for terrorist activities.

'I don't know the size of their cash-flows, but one dime going to terrorists is one too much. These organisations cannot function if we chop off their monies. In Europe, some countries may have to change banking laws in order for them to react in a way that we expect them to. …