Newspaper article The Evening Standard (London, England)

Why It's No Easy Task to Tackle Teroist Finaces

Newspaper article The Evening Standard (London, England)

Why It's No Easy Task to Tackle Teroist Finaces

Article excerpt


AFTER more than a week of searching, the world's regulators have found no evidence of short selling of shares by terrorist groups or any others before the World Trade Center attack. Not that this is surprising.

The problem with tackling insider dealing lies not in tracking people through their smokescreen of Swiss or Cayman Islands bank accounts, given the tools at the authorities' disposal. More often the difficulty is making the charge stick. Thus it always seemed unlikely that any organisation or coalition behind the terrorists would risk leaving a trail that could easily lead to their identification.

So where does it leave the other big idea of the moment - a global freeze on terrorist bank accounts?

Again, while it is easy for politicians to announce such a freeze, no one should be fooled into thinking it is easy to put into effect.

Indeed, the Financial Services Authority has no power to freeze anyone's assets, other than when sanctioned to do so by UN resolution (which is the case with the Taliban but no one else). The most the authorities can do is ask those whom they supervise to put themselves in a position to identify such assets should they exist - which is itself not easy. The responsibility on institutions that discover suspicious accounts is to report them to the National Criminal Intelligence Service, which may or may not instruct them to keep the accounts open in the hope that they can follow the money.

It is fairly easy to see British banks complying with such an order. But London is host to 500 other banks from most of the world's nations. Most of them might be expected to do what they can to help. But there must also surely be an element who will respond with considerably less enthusiasm because they are well aware what could happen to them on their next trip home if they became known as the bank managers who tipped off the authorities. …

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