Presentation on theme: "Terrorist Finance Kabul, Afghanistan April 2006. History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial."— Presentation transcript:
History of Financial Transparency Follow-the-Money U.S. Bank Secrecy Act - 1970 Creation of financial intelligence G-7 Creation of FATF – 1988 FATF 40 Recommendations Egmont Group of Financial Intelligence Units - 1995
What is Financial Intelligence? Many different examples: Records of large cash deposits Cross-border currency reports Large cash purchases Casino reports Suspicious Transaction Reports
Purpose of Financial Intelligence Gives investigators a paper-trail Key tool in the War on Narcotics Useful in other predicate offenses for money laundering Money laundering is the inverse partner of terrorist finance
Osama bin Laden: Attempts to find and freeze assets will not make any difference to al-Qaida or other jihad groups. Al-Qaida is comprised of modern, educated young people who are as aware of the cracks in the western financial system as they are of the lines in their own hands. These are the very flaws in western financial system which is becoming a noose for it.
September 11 Totals for 19 Hijackers Deposits $303,481.63Disbursements $303,671.62
Other Terrorist Attacks 1998 U.S. Embassy bombings in Kenya and Tanzania - $50,000 2000 attack on USS Cole in Aden - $10,000 2002 bombings in Bali – $50,000 2003 attacks in Istanbul - $40,000 2004 attacks in Madrid – about $10,000 Source: United Nations
War on Terrorist Finance: Response to Date Designations UN 1267 Committees Consolidated List Results: $112 million blocked by December 2001 $150 million – cumulative – by January 2006 $60 million actually seized Effective?
Response - continued Charities Cash Rules/Regulations/Reporting Requirements
We have ignored Informal Value Transfer Systems Hawala Misuse of international gold trade Diamond/gem trade Commodity/narcotics exchange Trade-based value transfer Common denominator:Common denominator: TRADE TRADE
The golden age of crime Why international drug traffickers are invading the global gold trade World Report, November 1999 U.S. Islamic Cash Outlets Investigated Hawalas Suspected in Terror Funding The Washington Post, November 2001 In Gold We Trust Wired, January 2002 Al Qaedas Road Paved With Gold Secret Shipments Traced Through a Lax System in United Arab Emirates The Washington Post, February 2002 The Afghan-Gold Connection
Laundering of Diamonds/Gems Diamond/Gem Pipeline point of origin to sale Mining, trading, cutting, polishing, retailing
Laundering along Pipeline Striking similarities to money laundering Illicit diamonds placed, layered, and integrated Facilitated by smuggling, corruption, porous borders Neither the Kimberly Process nor proposed anti-money laundering rules for diamond dealers will be effective in combating the laundering of diamonds