*EPF508 10/12/01
U.S. Freezes Assets of 39 More Suspected of Aiding Terrorism
(Senate, House committee pass money laundering measures) (660)
By Kathryn McConnell
Washington File Staff Writer

Washington -- The United States has blocked the assets of 39 more individuals and entities linked to terrorism, and U.S. officials promised to add other individuals and groups to the list in coming weeks and months.

Secretary of the Treasury Paul O'Neill told reporters October 12 that the 39 new names include "either wanted terrorists or who are know to financially support terrorism." On September 24, the Treasury Department released an initial list of 21 individuals and groups whose U.S. assets were frozen.

In each case, Treasury General Counsel David Aufhauser said, there was "compelling substantial and credible evident to take immediate action." Also briefing were Treasury under secretaries Jim Gurule and John Taylor.

The latest announcement follows October 11 passage by the Senate of an anti-money laundering bill similar to one approved the same day 62-1 by the House of Representatives Financial Services Committee.

Noting that 66 countries have asset-blocking orders in force, Taylor, under secretary for international affairs, said that 44 additional countries have expressed willingness to join the international effort to disrupt terrorists' financing. The coordinated blocking process "is expanding very rapidly," he said.

In an effort to encourage greater global participation in the sharing of financial information and the blocking assets, Taylor said, the United States and the International Monetary Fund (IMF) will provide technical assistance to countries that ask for help.

"There has been an unprecedented degree of cooperation among allies" to block assets, Taylor added. Challenged as to the extent of Saudi Arabia's anti-terrorism efforts, Taylor said that "we have every indication that they are cooperating and will plan to take actions going down the road that fulfill the commitment to cooperate."

Treasury officials would not describe what they have learned about the ways terrorists move money around the world.

"I don't think that it would be wise to go ahead and disclose to the world what we know about how these terrorist organizations move money," Under Secretary for Enforcement Gurule said. "We want to keep them guessing with respect to what we know."

He added that just because a name is not on the list of identified persons and organizations linked to terrorism "does not mean it is not suspect." The 39 names announced October 12 include six entities and 33 individuals.

The House is expected to act within days on passing the "International Money Laundering Abatement and Anti-Terrorist Act of 2001." Both House and Senate versions of the bill would make it illegal to raise money for terrorist organizations. They would require financial institutions in the United States to identify large depositors and prohibit the institutions from doing business with what are called "shell banks," which have no physical presence in any country. The bills would also require financial institutions to establish "due diligence" procedures to prevent, detect and report possible instances of money laundering and would authorize the Treasury secretary to establish minimum standards for institutions to follow in developing procedures.

The bills would also authorize law enforcement authorities to monitor underground banking systems, or networks of brokers, that enable individuals to transfer cash from one country to recipients in another country without the funds crossing borders or the transactions recorded. The paperless banks, known as "hawalas", operate in the Middle East and Asia.

A major difference between the Senate and House bills concerns Internet gambling, which the Federal Bureau of Investigation has identified as a vehicle for money laundering. The House committee version would ban such gambling.

Once passed by the full House, the difference in the House and Senate versions must be resolved. A final anti-money laundering bill must then go the President Bush for signature to become law.

(The Washington File is a product of the Office of International Information Programs, U.S. Department of State. Website: http://usinfo.state.gov)
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