11 February 2002

U.S. Achieving Success in Cutting Funds to Terrorists

United Nations -- A senior U.S. official met with members of the U.N. Security Council's Afghan Sanctions Committee February 11 to explain U.S. procedures for blocking terrorist assets and to urge the United Nations to take supportive action.

The United States hopes to persuade the Security Council to pass a resolution setting up an international list of individuals and groups involved in financing terrorist activities and requiring nations to block their assets and trade.

Jimmy Gurule, U.S. Department of the Treasury undersecretary for enforcement, characterized U.S. efforts to freeze the money of terrorist financiers and starve the terrorists of the funds needed to launch attacks as "quite successful" and "significant."

Since President Bush signed the Executive Order on Terrorist Financing on September 23, 2001, the United States has designated 168 individuals or entities as supporting, financing or facilitating terrorist financing, Gurule said. "In terms of dollars, $104 million has been blocked both domestically and internationally.... There are 147 countries that have issued blocking orders in support of the designations made by President Bush," he added.

"This is a preventative strategy. This isn't a numbers game. The endgame has never been dollars. The endgame has been to disrupt the flow of terrorist organizations, with the aim of preventing future terrorist attacks and saving lives," the undersecretary said at a press conference at the U.S. Mission to the United Nations.

"The intelligence reports that I have recently reviewed indicate that the strategy is making a difference and al Qaeda is having difficulty in moving money internationally," Gurule said.

"To that end substantial credit must given -- and properly so -- to our allies because this strategy is more than simply a US strategy. For it to be successful it depends in large part on international cooperation," he said. "It does us very little good if we issue blocking orders in the United States to domestic banks, but terrorist financiers are able to move their money through foreign bank accounts."

While he would not reveal details of the intelligence reports on al Qaeda financial operations, Gurule said that the reports were "particularly encouraging in terms of the impact that we certainly intended these blocking orders to have."

The blocking orders "have really caused al Qaeda to have to rethink how it moves money internationally, to come up with different methods, different systems," he said. "We've really forced them out of their comfort zone...in terms of reliable, familiar methods and systems for moving money. In short, the effort has been disruptive."

"And that has been one of the principal objectives -- to disrupt the flow of funds. So we think that our strategy is working," he said.

One example of the squeeze on al Qaeda financial operations has been the November action against the international conglomerate al Barakaat, which operates in 40 countries around the world with business ventures in telecommunications, construction, and currency exchange. It has been a principal source of funding, intelligence and money transfers for Usama bin Laden, the undersecretary said. Moving against al Barakaat "in short, delivered a very significant blow."

Gurule said he was at U.N. headquarters to provide the sanctions committee with an overview of the U.S. process to "assure them that this process is fair, based upon objective criteria and international standards, and is a thorough and deliberative process."

"It involves the input and consultation of multiple U.S. federal agencies including the Departments of the Treasury, State, Justice, (and) the Federal Bureau of Investigation, as well as the intelligence community. They all have a say with respect to the names that are proposed for designation," he said.

The evidence that is considered in determining whether or not an individual should be considered includes criminal investigation information, intelligence information as well as public or open source information, Gurule said. A committee meets regularly to review the names that are being considered and the Department of Justice undertakes a legal review with respect to legal sufficiency of the evidence.

"It is only after this very thorough, deliberative process has been completed and only after there has been a review of legal sufficiency of the evidence by Department of Justice attorneys that names are proposed to the secretary of the Treasury and ultimately to the president for designation," Gurule said.

The legal standard that is being applied is, in essence, an international standard that has been set forth and is articulated in Security Council resolutions 1333, 1373 and 1390, passed after the September 11 terrorist attacks, he noted.

There is also an administrative review process available to anyone who is listed, has had his or her assets blocked, and believes that a blocking order has been issued in error, the Treasury official said. Persons seeking to be removed can petition the Treasury Department's Office of Foreign Assets Control (OFAC).

The al Barakaat order has been challenged and is currently under administrative review, for example.

Exchanges of correspondence, additional fact-finding, and often meetings occur before OFAC decides whether to remove a name from the list. After the administrative legal process is exhausted, if the person is not satisfied with the outcome, the issue can be taken to U.S. Federal Court, he said.

"The United States also welcomes other countries' taking the lead in terms of designating individuals and freezing bank accounts. It is important because this is war against terrorism globally. It is important that we have this international cooperation and it be reciprocal," Gurule said.

"If a foreign country designates an individual and asks the United States to support that action by issuing a blocking order domestically in the United States, the United States would only do so after it had determined, assured itself, that there was a legally sufficient basis for doing so in the United States," he said.

Gurule emphasized that cutting the funds to terrorist organizations is a painstaking process that requires cooperation and information sharing on a global scale and that the United States intends to press ahead.

"The threat of terrorism remains very real in the United States," he said. The blocking orders demonstrate "the seriousness with which we here in the United States take that threat and urgency of the action we are taking to disrupt terrorists, to cut off thefunds, and to protect against terrorist acts. The threat is real."