TOPICS: How we’re tying up terrorists’ cash

Stuart Levey

President Bush spoke last week at the Army War College about the reshaping of our national security strategy to prevent new attacks and keep our country safe. Indeed, the threats we face today are different from the conventional enemies of the cold-war era. Many of them are not neatly confined within borders, but rather are transitional and asymmetric and therefore not necessarily susceptible to traditional means of deterrence.

To address these emerging dangers, we have had to revolutionise our national security architecture to deter and defeat this new form of enemy. The most obvious changes are the creation of the Department of Homeland Security, the National Counterterrorism Centre, and the position of director of National Intelligence to oversee the Intelligence Community.

A significant, but less-well-known, change has been the reorientation of the Treasury Department to play an important role in national security. As part of the strategy developed after Sept. 11, President Bush and Congress established a new office and intelligence unit at the Treasury to utilise financial intelligence and targeted financial measures aimed at illicit actors and their support networks. Terrorist financiers, weapons proliferators, narcotics traffickers, and even rogue regimes have one thing in common: They all rely on access to the financial system. We share the information gleaned from financial intelligence with foreign governments and the private sector to alert them to a particular threat and persuade them to act. We also use sanctions or regulatory authorities to freeze assets and bar further access to the US financial system.

The benefits of this strategy

are twofold. Offensively, we are taking important steps to combat national security threats. When we designate a terrorist, it becomes far more difficult for that individual to efficiently move funds. Beyond that, the action helps deter other would-be financiers.

Defensively, we help to exclude dirty money from the international financial system. Preserving the integrity of that system is central to maintaining confidence in it. Being excluded from the financial system is much more painful than many might imagine, and this new strategy is producing real results.

Other countries are joining this effort. Britain, for instance, has a newly passed counterterrorism law that will expand its ability to take action against terrorists and proliferators utilising London banks to finance their activities. Today, countries recognise that increasing transparency in the financial system and implementing standards to address money laundering along with counterterrorist and counter-proliferation financing is a competitive advantage in the global marketplace. Countries want to be viewed as trusted partners with a strong reputation for a safe financial sector. Analysing financial intelligence and imposing targeted financial measures have indeed become valuable components of the president’s overall national security strategy.