The Global Effort to Stop Terrorist Financing

By Gurule, Jimmy | Hampton Roads International Security Quarterly, January 15, 2004 | Go to article overview

The Global Effort to Stop Terrorist Financing


Gurule, Jimmy, Hampton Roads International Security Quarterly


Following the terrorist attacks of September 11, 2001, an essential component of the United States government's counter- terrorism strategy has been to identify, disrupt, and dismantle the financial networks of terrorist organizations. The global effort to stop terrorist financing is fundamentally a preventive strategy. Simply stated, if the United States, with the support of the global community, is able to impede the transfer of funds needed to finance acts of terror, it can prevent the commission of future acts of terrorism, and, in the process, prevent the killing of thousands of innocent people.

In a speech delivered on September 24, 2001, President George W. Bush unequivocally declared that the war on terrorism would be waged on the financial front:

Today, we have launched the first strike on the financial foundation of the global terror network . . . . We will direct every resource at our command to win the war against terrorists; every means of diplomacy, every tool of intelligence, every instrument of law enforcement, every financial influence. We will starve terrorists of funding, turn them against each other, rout them out of their safe hiding places, and bring them to justice.

The Legal Underpinning to U.S. Anti-terrorist Action On September 23, 2001, the President directed the first strike against the financiers of terror by issuing Executive Order 13224. That order, issued under the authority of the International Emergency Economic Powers Act (IEEPA), declared a national emergency with respect to acts and threats of terrorism committed by foreign terrorists against the United States. The order allows the United States to freeze assets subject to U.S. jurisdiction and prohibits transactions by U.S. persons with any designated person or entity based on their association with terrorists or terrorist organizations. Specifically, the order authorizes blocking all U.S. assets and transactions of foreign individuals, groups, and entities designated by the President, the Secretary of State, or Secretary of the Treasury as committing or posing a significant risk of committing acts of terrorism threatening the U.S. national security, foreign policy or economy. The order also permits blocking the property of persons found to provide support to, or to be otherwise associated with, any of these designated foreign persons, and forbids U.S. persons from doing business with those individuals. Executive Order 13224 includes an annex that lists 27 organizations and individuals whose assets are blocked because of their ties to terrorism.

Results Under Executive Order 13224, $138 million in assets have been blocked against 281 individuals and entities. This includes the assets of organizational leaders such as Usama bin Laden, his key lieutenants and terrorist operatives, financiers, and intermediaries around the globe. Moreover, the Executive Order applies to all global terrorists and includes al-Qaeda as well as other terrorist organizations such as the Real IRA, Shining Path, ETA, the East Turkistan Islamic Movement, Hamas, and Hizballah, among others. Of the $138 million in assets blocked, $36.4 million have been blocked in the United States through July 2003. The international community is responsible for blocking $101.6 million.

However, progress in the war against terrorist financing should not be measured solely in the millions of dollars of assets blocked. As the result of the public designation process, the international banking system is no longer safe for terrorists to use. Thus, terrorists must resort to nonconventional, less reliable, and more easily detectable methods of transferring money globally.

These anti-terrorist financing efforts have further had a deterrent effect. Many who formerly provided financial support for terrorism have backed away for fear of being designated a terrorist and having their bank accounts frozen. …

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