07 August 2003
U.S. Expert Says International Alliances Against Terrorism Are
Notre Dame's Gurule says terrorists' finance networks
(The following article by Notre Dame University Law School Professor
Jimmy Gurule appears in the International Information Programs
electronic journal "American Internationalism" issued in August
2003. This article and the rest of the journal may be viewed on
the Internet at:
THE GLOBAL EFFORT TO STOP TERRORIST FINANCING
By Jimmy Gurulé
(The ultimate success in the fight against those who would commit
acts of terrorism requires the active support of all nations, says
Jimmy Gurule, a professor at Notre Dame Law School and former Under
Secretary of the Treasury during the first two years of the Bush
administration. Gurule says that international alliances against
terrorism are crucial since the overwhelming bulk of terrorist
assets and cash lie outside the United States: "Terrorist financing
networks are global, and consequently, efforts to identify and
deny terrorists access to funds must also be global.")
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
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
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. Additionally, entire terrorist funding
networks have been dismantled, making it more difficult for terrorist
organizations to raise money to finance terrorist operations. For
example, in November 2001, the U.S. blocked the assets of the Benevolence
International Foundation, a corrupt Islamic charity which for years
funneled money to al-Qaeda.
Terrorist financing networks are global, and consequently, efforts
to identify and deny terrorists access to funds must also be global.
Moreover, because the overwhelming bulk of terrorist assets, cash
flows, and evidence lie outside the United States, international
alliances against terrorism are crucial. Recognizing the importance
of international cooperation, the United States has worked not
only through the United Nations on blocking assets, but also through
multilateral organizations and on a bilateral basis to promote
international standards and establish protocols for combating terrorist
financing. It should further be noted that currently 172 countries
and jurisdictions have issued blocking orders against some or all
of the names on the Treasury list of terrorist financiers.
The United Nations has played a key role in the global strategy
to starve the terrorists of funds. On September 28, 2001, the
United Nations Security Council unanimously adopted Resolution
(UNSCR) 1373, requiring all member states to "[f]reeze without
delay funds and other financial assets or economic resources
of persons who commit, or attempt to commit, terrorist acts."
On January 16, 2002, the Security Council adopted Resolution 1390,
which modifies and continues the international sanctions against
the Taliban, Usama bin Laden, and al-Qaeda as set forth by UNSCRs
1267 (1999) and 1333 (2000). Resolution 1267 was adopted on October
15, 1999, and targeted the Taliban by freezing its funds and other
financial resources and those of any entity owned or controlled
by it. On December 19, 2000, the Security Council adopted Resolution
1333 requiring member states to freeze "without delay" the funds
and other financial assets of Usama bin Laden and al-Qaeda associates.
Resolution 1267 further established a U.N. Sanctions Committee,
consisting of all members of the Security Council, which has proven
to be a very useful mechanism for internationalizing asset freezes
against the Taliban, Usama bin Laden, al-Qaeda and those linked
or associated with them. The names of targeted individuals and
entities are submitted to the 1267 Sanctions Committee for inclusion
in the committee's list of terrorists and terrorist financiers.
Once a name is placed on the U.N. list, member states are obligated
to freeze the funds and assets located within their respective
The U.S. has worked closely with the 1267 Sanctions Committee.
For example, prior to being publicly designated under Executive
Order 13224, the names of individuals and entities are submitted
to the 1267 Sanctions Committee through the U.S. Mission to the
U.N. If no member of the Sanctions Committee objects, the Treasury
names are added to the U.N. list, and the assets of the suspected
terrorist financiers are blocked worldwide.
The European Union and the United States have worked closely together
to ensure that terrorist financiers designated by one party are
also designated by the other. For example, in August 2002, Italy
joined the United States in submitting to the U.N. Sanctions
Committee the names of 25 individuals and entities linked to
al-Qaeda so that their assets could be frozen worldwide. Furthermore,
in February 2002, the United States joined Spain in designating
21 individuals linked to ETA, the Basque terrorist group.
The Group of Seven (G7) Finance Ministers and Central Bank Governors
(the United States, Japan, Germany, France, United Kingdom, Italy,
and Canada) have played an important role in combating the financing
of terrorism. The G7 issued an Action Plan on October 6, 2001.
In April 2002, it submitted a list of 10 names to the U.N. so that
the assets of those individuals would be frozen worldwide, and
in September 2002 it released a one-year report on terrorist financing.
In June 2002, G8 (the G7 countries plus Russia) Foreign Ministers
endorsed a revised set of recommendations on counterterrorism,
which included a commitment to full implementation of UNSCR 1373
and the Financial Action Task Force (FATF) eight special recommendations
on terrorist financing.
Another good example of international cooperation in the war against
terrorist financing involves the Financial Action Task Force (FATF).
FATF is the premier international body dedicated to the establishment
of legal and regulatory standards and policies to combat money
laundering. Established by the G7 in 1989, FATF has grown to 31
member states covering five continents. The fundamental FATF document
is the FATF 40 Recommendations, which represent a set of international
standards for countries to establish an effective anti-money laundering
Following the terrorist attacks of September 11, 2001, the FATF
expanded its mandate to include terrorist financing. Specifically,
the FATF articulated eight special recommendations which, when
combined with the FAFT 40 Recommendations, establish the basic
framework to detect, prevent and suppress the financing of terrorism.
One of the eight special recommendations encourages countries to
implement legislation to authorize the forfeiture of funds intended
to be used to finance terrorism. FATF is monitoring compliance
with its recommendations. It has invited members as well as non-members
to respond to a questionnaire on compliance with these recommendations,
and is assessing these countries' needs for technical assistance.
Most recently, FATF has established a Terrorist Financing Working
Group to oversee FATF's counter-terrorist financing activities.
The Working Group is currently chaired by the United States and
The United States has worked bilaterally with a number of other
countries in the fight against terrorist financing. For example,
collaborative efforts with Middle East countries have resulted
in the United Arab Emirates, Bahrain, Egypt, and Qatar enacting
anti-money laundering legislation. Kuwait and Saudi Arabia have
established government entities to oversee charities and prevent
abuse of financial donations. Additionally, in September 2002,
Saudi Arabia joined the United States in submitting to the 1267
Sanctions Committee the name of a Saudi supporter of al-Qaeda so
that his assets could be frozen worldwide.
As we approach the second year anniversary of the heinous attacks
of September 11, 2001, the challenge is to strengthen successful
anti-terrorist financing initiatives and develop new and creative
strategies to starve the terrorists of funds. The international
community must continue to play a central role in these efforts.
Finally, Islamic donor countries must assume a leadership role
in developing policies, procedures and regulations to govern Islamic
charities and prevent them from being used to underwrite acts of